Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Hansard source

The coalition supports the Private Health Insurance Legislation Amendment Bill 2009. It is the first and only and, indeed, very lonely positive legislative initiative of this government in relation to private health insurance. It, of course, comes after the disastrous changes last year to the Medicare levy surcharge thresholds, which the government expects will see nearly 500,000 fewer people in private health insurance. It comes after Labor’s broken promise on private health insurance rebates, which will see a further 40,000 people leave private health insurance with all of the disastrous related consequences for our public health system and with all the related disastrous consequences in terms of the cost of private heath insurance for the 11 million Australians that do take additional responsibility for their own healthcare needs.

As I said, this is a positive initiative. This bill will add a new category to the groups to which private health insurers can offer insurance policies. Currently, the Private Health Insurance Act requires that insurers are only allowed to offer policies to particular insured groups—namely, singles, couples and families with dependent children. Since late 2007 the rules were changed to include another extended family category, which included ‘dependent children non-students’. This category allowed family policies to cover people between the ages of 18 and 24 who were single and not in full-time education. The category was developed by health insurers to encourage young adults to maintain health insurance cover into adulthood.

The arrangements however have been temporary and this bill proposes amendments to insert the category of ‘dependent child non-student’ into the Private Health Insurance Act. This will enable insurers to offer policies to this group on a permanent basis. Health insurers will be able to charge higher premiums for these extended family policies than for others; however, the premium is expected to be less than that charged to a young, single individual if they were forced to take out their own cover. With the percentage of people in the 20- to 24-year age grouping covered by private health insurance in decline, down to 3.9 per cent in 2008, it is hoped that this measure will make insurance under the family policy umbrella more attractive and see younger people remain covered by insurance.

Of course we will have to wait and see because the positive impact of this measure will be offset to a very significant degree by the disastrous consequences of successive attacks by the Rudd Labor government on Australians with private health insurance. These successive attacks will see the cost of private health insurance increase overall and in excess of 500,000 fewer Australians covered by private health insurance—attacks that are going to have a disastrous impact on our health system overall. Very specifically as a result of the broken promise on private health insurance rebates, more than 2.3 million Australians are expected to see an automatic increase in their private health insurance of between a staggering 14.3 to 66.7 per cent.

The government initially told us that 25,000 people would leave as a result. During estimates that became 40,000 people. Access Economics has estimated that it could be up to 100,000 people. The government in its rhetoric has been trying to point to Private Health Insurance Administration Council data to suggest that the expectation of last year, of there being nearly half a million fewer Australians in private health insurance as a result of the Medicare levy surcharge changes, had not come out. But of course during the Senate estimates both the health department and the Treasury confirmed that the government continues to expect, and indeed continues to need, 500,000 fewer Australians to be covered by private health insurance in order to achieve the savings that it has included in the budget estimates. So with those few remarks I confirm that the coalition support this initiative. We consider this to be a positive initiative. But what a shame it is that the government could not take this sort of attitude to our health system more often.