Additional Comments by Coalition Senators
This is the third significant
change to private health insurance rebates proposed by the Rudd and Gillard
Governments.
The means-testing change provided for in the Fairer Private
Health Insurance Incentives Act 2012 and related legislation, is the only
measure that has been implemented to date.
In relation to the means-testing change, the Private Health
Insurance Administration Council found in The Operations of Private Health
Insurers Annual Report 2011-12:
... in response to the reform, many insurers promoted
prepayment options to maximise their customers’ opportunity to claim a rebate
in respect of premiums paid. As a result, policy holders were able to ‘lock in’
premiums for up to the specified prepayment period, which saw prepaid premiums
increase by $1.2 billion.
...the impact on policy holders’ choice in respect
of cover will emerge as prepayment periods end.
Coalition Senators agree that
detrimental effects on coverage rates and level of cover caused by the means-testing
change and the subsequent proposed changes, including the Bill before the
Committee, will not be known for some time. Current trends in private health
cover do not accurately reflect the impact of changes that have been deferred
through prepayments and others which have not yet been implemented.
The consequence of this Bill is
likely to be to “increase the cost of obtaining private health insurance for
consumers” as noted in the Explanatory Memorandum. It will affect people with
private health insurance irrespective of age or income. As noted by a number of
organisations, including Medibank Private, Hirmaa and National Seniors
Australia, there are particular concerns about the long-term consequences for
older Australians with fixed or lower incomes.
Coalition Senators also share
the significant concerns of a wide range of stakeholders regarding the
implementation difficulties associated with this measure.
The Bill will add significant
complexity to the administration of private health insurance and have
associated costs for insurers.
Coalition Senators would urge
the Government to give more detailed consideration to alternative measures
provided to the Committee, which may mitigate the administrative burden and
implementation complexity associated with this Bill.
Senator Concetta Fierravanti-Wells
Senator Dean Smith
Senator Bridget McKenzie
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