PRIVATE HEALTH INSURANCE LEGISLATION AMENDMENT BILL 2009
THE INQUIRY
1.1
In accordance with a Senate Order of 14 May 2009 to refer certain
budget-related bills to Senate Committees, the provisions of the Private Health
Insurance Legislation Amendment Bill 2009, introduced into the House of
Representatives on 3 June 2009, have been referred to the Community
Affairs Legislation Committee for inquiry and report by 16 June 2009.
1.2
The Selection of Bills Committee noted in Report No.7 0f 2009, dated 4
June 2009, that it had considered a proposal to not refer the Bill to the
Community Affairs Legislation Committee but drew the Committee's attention to
paragraph (4) of the Order of 14 May. The Selection of Bills Committee made no
further recommendation in respect of the Bill.
1.3
Due to the inquiry timeframe the Committee sought comment from peak
groups in relation to the Bill. Two submissions were received that commented
only on the extended family policies amendments and these are listed at
Appendix 1 and may be accessed through the Committee’s website at https://www.aph.gov.au/senate_ca.
Apart from these comments and in accordance with paragraph (4) of the Senate
Order, the Committee has determined that there are no substantive matters that
require examination.
THE BILL
1.4
The Bill provides amendments that will permanently allow private health
insurers to offer extended family policies that cover people aged 18 to 24
(inclusive) who do not have a partner and are not receiving a full-time
education at school, college or university, and where the fund rules of the
private health insurer provide for this group.
1.5
The amendments will add a category of ‘dependent child’ under the Private
Health Insurance Act 2007 by inserting the definition of ‘dependent child
non-student’. This will allow insurers to charge a different premium for
‘dependent child non-students’ under a family policy. A ‘dependent child
non-student’ is a person aged from 18 to 24 (inclusive), who does not have a
partner, is not receiving a full time education at a school, college or
university and is defined in a private health insurer’s fund rules. The
provision will allow insurers to include ‘dependent child non-students’ on a
family policy (a policy with more than one person that includes a dependent
child or children) at an additional premium rate.
1.6
In 2007, a number of private health insurers requested changes to the
private health insurance law to allow private health insurers to offer family
policies covering ‘dependent child non-students’ at rates higher than the
premium for the same products covering children aged under 18 and older
students. Transitional arrangements allowing this practice were put into effect
in late 2007. The Bill will allow this practice on a permanent basis.
1.7
The Bill also includes consequential amendments to the Private Health
Insurance Act 2007, consistent with the introduction of the Private Health
Insurance (National Joint Replacement Register Levy) Bill 2009[1],
which impose a levy upon sponsors of joint replacement prostheses in order to
recover the costs of maintaining the National Joint Replacement Register
(NJRR). The consequential amendments to the Private Health Insurance Act 2007
allow for the administration of the NJRR levy.
ISSUES
1.8
The Australian Health Insurance Association supported the Bill
commenting:
The AHIA endorses the proposed legislation and congratulates
the Australian Government on the policy initiative. The legislation corrects an
anomaly which arose from the implementation of the Private Health Insurance Act
2007.
This legislation will allow Private Health Funds the
opportunity to continue to offer extended family policies on a permanent basis
to accommodate dependents, including those who are not full‐time students, aged between
18 and 24 years. This important policy change will allow funds to continue to
support the health care needs of younger Australians.[2]
1.9
The Health Insurance Restricted Membership Association of Australia
(HIRMAA) also supported the Bill. HIRMAA advised that it had written to the
Minister about its concern at the impact that the cessation of the extended
dependent coverage would have on people aged 18 to 25 being covered by private
health insurance. HIRMAA submitted:
HIRMAA notes that the Private Health Insurance Legislation
Amendment Bill 2009 amends certain community rating provisions to specify that
insurers can offer policies covering children up to 25 (who do not have
partners and are not students) at an increased premium.
HIRMAA welcomes the proposed amendments.[3]
Recommendation
1.10 The Committee recommends that the Private Health Insurance Legislation
Amendment Bill 2009 be passed.
Senator Claire Moore
Chair
June 2009
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