HEALTH LEGISLATION AMENDMENT BILL (No. 4) 1998
MARCH 1999
© Commonwealth of Australia 1999
ISSN 1440-2572 |
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Senate Standing Committees on Community Affairs
PO Box 6100
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Canberra ACT 2600
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Membership of the Committee
Members
| Senator Sue Knowles, Chairman |
LP, Western Australia |
| Senator Andrew Bartlett, Deputy Chair |
AD, Queensland |
| Senator Kay Denman |
ALP, Tasmania |
| Senator Alan Eggleston |
LP, Western Australia |
| Senator Chris Evans |
ALP, Western Australia |
| Senator Ross Lightfoot |
LP, Western Australia |
Participating Members
| Senator Eric Abetz |
LP, Tasmania |
| Senator Bob Brown |
Greens, Tasmania |
| Senator Mal Colston |
Ind, Queensland |
| Senator the Hon Rosemary Crowley |
ALP, South Australia |
| Senator the Hon John Faulkner |
ALP, New South Wales |
| Senator Michael Forshaw |
ALP, New South Wales |
| Senator Brenda Gibbs |
ALP, Queensland |
| Senator Brian Harradine |
Ind, Tasmania |
| Senator Meg Lees |
AD, South Australia |
| Senator Dee Margetts |
GWA, Western Australia |
| Senator the Hon Chris Schacht |
ALP, South Australia |
| Senator John Woodley |
AD, Queensland |
REPORT
Health Legislation Amendment Bill (No. 4) 1998
1. THE INQUIRY
1.1 The Health Legislation Amendment Bill (No. 4) 1998 was introduced
into the House of Representatives on 3 December 1998. On 9 December
1998, the Senate, on the recommendation of the Selection of Bills Committee
(Report No. 13 of 1998), referred the provisions of the Bill to the
Committee for report by 8 March 1999.
1.2 The Committee considered the Bill at a public hearing on 17 February
1999. Details of the public hearing are referred to in Appendix 2. The
Committee received 15 submissions relating to the Bill and these are listed
at Appendix 1.
2. THE BILL
2.1 The Health Legislation Amendment Bill (No. 4) 1998 sets in place
through three schedules the framework for the introduction of reforms
to the private health insurance product. These reforms complement the
recently enacted 30 per cent private health insurance rebate and are designed
to make the health insurance product more attractive to consumers by enabling
greater product flexibility.
2.2 The proposed reforms implement a number of recommendations from the
Industry Commission's Report on Private Health Insurance [1]. The reforms
contained in Schedule 1 of the Bill as introduced into the House of Representatives
will:
- Allow registered health funds to offer discounted premiums to contributors
based on the administrative savings of health funds;
- Allow health funds to offer loyalty bonus schemes to contributors
(which may be pecuniary in nature or may be provided through goods and
services) in recognition of the period of time over which the contributor
has paid premiums. There is also a provision which ensures that health
funds uphold the principle of `community rating' with respect to the
provision of a loyalty bonus scheme to persons covered under a given
insurance table;
- Allow waiting periods to be extended for certain conditions, ailments
or illnesses;
- Allow health funds to cover the PBS patient co-payment for prescribed
pharmaceutical benefits for in-hospital treatment;
- Allow health funds to pay benefits for `out-of-hospital procedures'
which are undertaken in `approved procedures facilities'; and
- Create a new class of benefit payable by health funds to cover specialist
health services.
2.3 Schedule 2 provides amendments which in respect of Parts (5) and
(6) of Schedule 1 will:
- allow `simplified billing' arrangements to apply,
- modify the definitions of `accident and sickness insurance business'
and `health insurance business' to ensure that only health funds may
provide insurance, and
- modify the scope of services that may be contracted for through medical
purchaser-provider agreements to enable such agreements to cover the
services referred to in these parts.
2.4 Schedule 3 of the Bill establishes separate provisions to deal with
health fund rule changes that relate to a change in the rates of contribution
of contributors (ie changes in premium levels) and all other rule changes.
Ministerial power to monitor rule changes will be broadened by allowing
the Minister to consider the impact of those rule changes not just upon
the health fund and its members (the existing grounds) but also upon the
broader interests of the health insurance industry and the overall public
interest. [2]
2.5 In addition, the Bill allows for the transfer of the rates of contribution
rule change provisions from the Minister to the Private Health Insurance
Administration Council and, at an appropriate time, to increase the independence
and flexibility of health funds with respect to rates of contribution
rule changes. [3]
2.6 On 16 February 1999 the Minister for Health and Aged Care, Dr Michael
Wooldridge, wrote to the Committee Chairman advising:
Part 6 of Schedule 1 of the Bill allows funds to offer an optional
table to contributors where funds would pay `gap' payments above 85%
of the MBS for specialist consultations in their rooms.
I thought it important to inform you that on 15 February 1999 Cabinet
agreed to an amendment to the Bill to remove Part 6 of Schedule 1 and
all relevant miscellaneous provisions at Schedule 2 of the Bill. [4]
3. ISSUES
3.1 The organisations providing submissions and evidence were generally
supportive of the Bill, with some providing comments relating to the implementation
of aspects of the legislation. As ACHCA said `rather than having huge
provisos, we have simply wanted to put on the table areas which need to
be carefully monitored'. [5]
4. RECOMMENDATION
4.1 The Committee reports to the Senate that it has considered the Health
Legislation Amendment Bill (No. 4) 1998 and recommends that the
Bill as proposed to be amended in the House of Representatives proceed.
Senator Sue Knowles
Chairman
March 1999
MINORITY REPORT - AUSTRALIAN LABOR PARTY
HEALTH LEGISLATION AMENDMENT BILL (NO. 4) 1998
- This Bill contains a number of separate proposals which collectively
aim to further deregulate the private health insurance funds. The late
withdrawal of Part 6 of the Bill and the unavailability of the amendments
which the Minister has foreshadowed has hampered the ability of the
Committee to consider the impact of the Bill.
- The evidence presented to the Committee does not support the view
that all organisations were generally supportive of the Bill. A large
number of issues were raised by different groups.
- The key issues which remain unexplained are:
- The Department has not explained why the cost of the proposal
will be zero given that 30% of the cost of any new members and any
future price rises will be a cost to the Federal budget.
- The introduction of office based surgery in the way proposed is
not supported by the AMA. There is inadequate detail on how such
office based surgery is to be regulated to ensure quality standards
are maintained. The alternative of introducing a “facilities
fee” as a Medicare rebate should be explored if the economic
case for office based surgery is as strong as is being suggested.
- The removal of Ministerial responsibility for approval of fee
increases is inappropriate given the recent large increases in health
insurance premiums and the failure of the industry to control costs.
- The lack of clarity about the timing of the proposed three stage
phase out of pricing controls is unsatisfactory as no minimum times
have been set for the duration of each phase.
- The Opposition will not be supporting the Bill as it stands and will
move amendments to address the concerns that have been raised when the
Bill is considered in detail.
Senator Chris Evans Senator Kay Denman
(ALP, Western Australia) (ALP, Tasmania)
MINORITY REPORT BY THE AUSTRALIAN DEMOCRATS
The Health Legislation Amendment Bill (No 4) 1998 introduces a
number of changes to the regulatory framework for private health insurance.
The Democrats recognise that the Government has a role in regulating
private health insurance, however, we believe that the Government's first
priority in health should be the public system. The public health system
is currently struggling to cope with increasing demand and an inefficient
funding system that discourages coordination between jurisdictions. These
are major structural problems that will not be addressed through minor
changes to the regulation of private health insurance. The Democrats support
the general intention of this legislation to encourage private health
insurance funds to be more innovative in developing attractive products
for consumers. The Democrats have been disappointed at the lack of consumer
focus shown by many funds in the past. However, we do not believe that
this Bill will assist the majority of Australians who rely on the public
system for their health care.
Senator Meg Lees
Australian Democrats Senator for South Australia
Senator Andrew Bartlett
Australian Democrats Senator for Queensland
APPENDIX 1 - Submissions received by the Committee
| 1 |
Association of Independent Retirees, Inc |
| 2 |
National Seniors Association |
| 3 |
Australasian Day Surgery Association |
| 4 |
Australian Private Hospitals Association Limited |
| 5 |
Medical Benefits Fund of Australia Limited (MBF) |
| 6 |
Australian Health Insurance Association Ltd |
| 7 |
Consumers' Health Forum of Australia |
| 8 |
Commonwealth Department of Health and Aged Care |
| 9 |
Health Consumers' Council WA (Inc) |
| 10 |
Medibank Private |
| 11 |
Australian Catholic Health Care Association (ACHCA) |
| 12 |
Australian Consumers' Association |
| 13 |
Australian Medical Association (AMA) |
| 14 |
Australian Healthcare Association |
| 15 |
William M Mercer (Aust) Ltd |
APPENDIX 2 - Public Hearing
A public hearing was held on the Bill on 17 February 1999 in Senate
Committee Room 2S1.
Committee Members in attendance
Senator Sue Knowles (Chairman)
Senator Kay Denman
Senator Alan Eggleston
Senator Chris Evans
Witnesses
Australian Health Insurance Association (AHIA)
Mr Russell Schneider, Chief Executive
Australian Medical Association (AMA)
Dr Bill Coote, Secretary General
Australian Catholic Health Care Association (ACHCA)
Mr Francis Sullivan, Executive Director
Department of Health and Aged Care
Ms Lynelle Briggs, First Assistance Secretary, Portfolio Strategies Division
Ms Chris Woodgate, Assistant Secretary, Private Health Industry Branch
Mr Peter Callanan, Director, Insurance and Hospital Services Section
FOOTNOTES
[1] Industry Commission, Private Health Insurance,
Report No.57, February 1997.
[2] Explanatory memorandum, pp.2, 7-14 and Submission
No.8, p.3.
[3] Explanatory memorandum, p.3, 17.
[4] Committee Hansard, 17.2.99, p.1.
[5] Committee Hansard, 17.2.99, p.11.