Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Hansard source

I move:

That the Fairer Private Health Insurance Incentives Bill 2012 and two related bills be referred to the Economics Legislation Committee.

I do so because this is the latest betrayal by the Gillard Labor government that really does need to be put under scrutiny. Why? Because this government has absolutely no mandate whatsoever to pass these bills.

The government claims only 27,000 people will drop cover as a result of this measure. Treasury has not done the modelling of the effect of the downgrading of this cover. This is why it needs to be scrutinised. The government's own insurer, Medibank Private, predicted 37,000 of their members alone will drop their cover and 92,500 will downgrade. About 2.4 million people will be directly affected with immediate increases in premiums of 14 per cent, 29 per cent and 43 per cent in the respective income tiers for those under 65.

Deloitte, which is a very respected organisation, has undertaken an analysis which predicts that in the first year 175,000 people would be expected to withdraw from private hospital cover and a further 583,000 people will downgrade. Over five years, 1.6 million people will drop their cover and 4.3 million people will downgrade their cover. Deloitte's analysis also predicts that private health insurance premiums will rise 10 per cent above what they would otherwise be. They also predict that there will be $3.8 billion in additional recurrent costs for the public hospital system. Around 2.8 million people with general treatment cover will withdraw and 5.7 million people will downgrade over five years.

Has Treasury done modelling on the costs and additional burden on the public hospital system, not to mention the effects that this is going to have on waiting lists? No. As we know, a deterioration of the risk pool—that is, healthier, younger people dropping out of private health insurance first—will cause an upward pressure on premiums for all 12 million Australians with private health insurance. What further premium increases will be required as a result of this increased risk? How many people will drop out of private health insurance as a result of these further increases?

When one looks at the people who now rely on private health insurance—the government has been absolutely outrageous in the way that it lied about this measure at the last federal election. For years the Australian Labor Party has been telling us in writing—and it is not worth the paper it is written on—that, 'No, we're not going to touch private health insurance rebates.' They kept telling us that. They lied about this.

Senator Feeney interjecting—

They went to the last federal election and lied about this, Senator Feeney. Of course, now they are perpetrating that by telling us that private health insurance is for the rich. Well, 5.6 million people with private health insurance have an annual household income of less than $50,000. Go and tell those people on less than $50,000 that according to this government they are wealthy, and 3.4 million of those people have an annual household income of less than $35,000. What this government is doing in relation to private health insurance is absolutely outrageous. What is going to happen when all the patients in the private hospital system move over? Therefore, these bills need to be scrutinised by a Senate committee. (Time expired)