Mr MURPHY (10:01 AM) —The Health Legislation Amendment (Private Health Industry Measures) Bill 2002 makes a number of largely minor changes to improve the efficiency of the administration of private health insurance. In August 2000 amendments to the National Health Act 1953 and the Health Insurance Act 1973 enabled health funds to establish gap cover schemes. Under these schemes health funds are able to provide no-gap cover and known-gap cover without the need for specific contracts. In relation to gap cover schemes, the current bill has two stated aims: firstly, to align, where appropriate, requirements relating to gap cover schemes with those applicable to contractual methods of addressing the gap; and, secondly, to consolidate and clarify the obligations of registered health funds to provide information to the public and the department.

Among the changes made by the bill to improve the operation of no-gap schemes are the following: the bill exempts the assignment of a contributor's Medicare benefit to a health fund from any duty or charge under state law; the bill gives the Department of Health and Ageing greater access to hospital purchaser-provider agreements, medical purchaser-provider agreements and practitioner agreements; and the bill further allows any person, including members of the public, access to lists of hospitals, day hospitals and medical practitioners with which a fund has contractual agreements.

The bill also makes a number of other changes, such as: removing the responsibility for the registration of billing agents from the Private Health Insurance Administration Council, leaving that responsibility solely with the Health Insurance Commission; allowing funds to offer discounts for quarterly advance payments; and removing a prohibition on employers contributing directly to health expenses incurred by employees who have a certified agreement. These changes are in the nature of finetuning.

While the measures in this bill will improve private health insurance, the government's recent decision to allow private health funds to automatically increase their premiums by inflation will slug families for between $50 and $100 each year. The decision to allow private health insurers to automatically increase their premiums by the CPI each year is unfair to Australian families, especially those who might have believed the Prime Minister on 29 August 1996 when he said:

Later the same day the Prime Minister said:

The Prime Minister has now walked away from his `absolute guarantee' that this government would approve further premium increases. There is now nothing to stop private health funds putting up their premiums by the CPI each year. The result is that consumers will pay more. Australian families, who listened to the Prime Minister and understood that the Prime Minister would keep that commitment, will pay more.

Let us not forget every other taxpayer who will be funding the increases in the government's 30 per cent private health insurance rebate. The government's contribution to private health insurance is currently $2.3 billion per year. Another five per cent increase in premiums would cost the taxpayer around $115 million each year, or $460 million for four years. The government promised premiums would come down; but, as we know, they have gone up—one promise before the election turning into a broken promise after the election. Unfortunately, that is all too familiar.

Australians with private health insurance will have to look forward to an annual automatic minimum CPI slug from their health fund. Worse, health funds will still be able to apply for an even greater increase. There have been numerous media reports recently that health funds will be asking the government for increases next year of at least five per cent. Are these increases inevitable? Will the government give us an absolute guarantee? Already this year we have seen average price increases of seven per cent across the private health insurance industry. God forbid the government further violating the Australian people with any more absolute guarantees on private health insurance.

The recent behaviour of the government on this issue has already been nothing short of offensive, in my view. This decision was cynically announced on 11 September. This was a deliberate attempt by the government to mask the bad news from Australian families. I will explain what happened. At four o'clock in the afternoon on 11 September 2002, the Minister for Health and Ageing issued a media release. She said:

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It is incredible that the minister still tried to pretend the announcement was good news for Australian consumers. If the changes were really going to be good for Australians and their families, why sneakily put out a media release on the decision in the late afternoon when the majority of Australians were numbed by the countless television reruns of the tragic and catastrophic events in the United States of America 12 months earlier? How cynical can the government get? Australians despise this behaviour but, unfortunately, have come to expect it from the government.

A further five per cent premium increase would cost many Australian families, already under financial pressure, an extra $100 to $150 per year. When the government approved the seven per cent in average premiums earlier this year, it translated to Australians paying between $150 and $250 more each year for their cover. Individual increases for some funds were much greater: a 66 per cent to 100 per cent increase in excess payments for many Medibank Private members, with nearly three million members in total; a 36 per cent increase for some IOR Australia members, with over 100,000 members; a 32 per cent increase for some Australian Health Management members, with over 250,000 members; an 18 per cent average increase for all HBF's 800,000 members in Western Australia; and a 16 per cent increase for Medibank Private's most popular product.

Rather than selling off Medibank Private, the government should make sure Australian consumers and Australian taxpayers get value for money from private health insurance. Whilst the opposition supports this bill because it streamlines the efficiency of the administration of private health insurance, the government's serial practice of slugging families by stealth must cease forthwith.