Further to the answer to question No. 209 (Hansard, 11 May 1999, page 4165 and 23 June 1999, page 5736), what proportion of (a) total health expenditure in Australia was funded by health insurance funds in each year since 1996-97 and (b) recurrent health expenditure was funded by health insurance funds for (i) public acute care hospitals, (ii) private hospitals, (iii) medical services, (iv) dental services, (v) other professional services and (vi) all other services in each year since 1996-97.

The data below show the proportion of total health expenditure and total recurrent health expenditure funded by private health insurance funds for 1996-97 to 1998-99.

Proportion of total health expenditure met by private health insurance, by area of expenditure, 1996-97 to 1998-99 (per cent)

Source: Australian Institute of Health and Welfare (AIHW), “Health Expenditure Bulletin” series. The latest detailed data available is for 1998-99 (Health Expenditure Bulletin 17, September, 2001).

1 The figures for the proportion of total health expenditure and proportion of total recurrent health expenditure for 1996-97 and 1997-98 vary slightly from those previously provided to the answer to Question 209. The Australian Institute of Health and Welfare (AIHW) advises that the figures previously supplied were preliminary.

2 It should be noted that the Private Health Insurance Incentives Act 1997, which came into effect on 1 July 1997, made provision for the subsidisation of health insurance premiums for low income earners. That subsidy was replaced by the 30% rebate, which is available to all members with private health insurance cover. The effect of the subsidy and the rebate is to reduce the amount of health expenditure that is funded through premiums and other earnings generated by the funds. It is regarded by the AIHW, therefore, as Commonwealth Government funding for the types of health services that attract payments by private health insurance funds. This has been the case since 1997-98.

The subsidy and the rebate that replaced it could be claimed as either a reduced premium (in which case the Commonwealth Government reimbursed the health insurance funds) or as a taxation rebate (in which case members paid the full premium to the health insurance funds and claimed the subsidy/rebate through their taxation return after the end of that year). Where the subsidy/rebate results in a reimbursement to the health insurance funds, it is treated by the AIHW as health expenditure that was funded by the Commonwealth Government.

This means that the proportion of health expenditure funded by premiums and other earnings of the health insurance funds is lower than the proportion of health expenditure funded through the health insurance funds. In the case of subsidies or rebates claimed by members through their taxation return, this also could be regarded as funding that is ultimately sourced from the Commonwealth Government. However, because that funding does not flow back through the funds, but goes directly to fund members, it has not been treated by the Institute as funding by the Commonwealth in its analyses of expenditure by `area of expenditure'.

The AIHW has in recent publications adjusted the way it presents its detailed health expenditure analyses. This makes it now possible to extract data according to whether the expenditure was funded by the health insurance funds or through the health insurance funds. In preparing the figures for this table, the AIHW's estimates of expenditure funded through the private health insurers have been used to give a more relevant answer to this question on notice.