I rise to speak today on the Health Legislation Amendment (Private Health Insurance) Bill 2006.

This bill makes changes to the powers of the Private Health Insurance Ombudsman and also makes minor amendments with regard to the administration of the private health insurance rebate by Medicare Australia and by the Australian Taxation Office.

It increases the ombudsman’s power to be able to conduct investigations at their own initiative or at a minister’s request.

In addition to being able to deal with disputes between customers and funds, the ombudsman will be able to deal with issues related to arrangements between insurers, the brokers and providers of services—although obviously not clinical matters.

These amendments will also allow the Private Health Insurance Ombudsman to become involved in the mediation of disputes by giving the Ombudsman the ability to compel parties in a dispute to undertake mediation. At the moment the Ombudsman can receive and investigate complaints but can not act to help resolve them. So consumers may still find that they do not get much satisfaction in relation to their complaints.

This measure has the potential to help consumers by providing a much stronger avenue for redress when they feel they have been unfairly dealt with. Although the Ombudsman will be able to facilitate the resolution of disputes through requiring mediation, this bill does not actually give the Ombudsman any power to impose a resolution.

Health insurance is complex and there are many problems. People dealing with health insurance and health care providers are often bewildered by the different products available, the rules that apply to them and the lack of easily understandable and comparable information.

There are of course problems with exclusions and waiting times, difficulties switching funds, and benefit limitations for some treatments.

Australians have been pouring money into private health insurance funds for the most part not because the funds themselves are offering better value for money but because the government has coerced and frightened them into it.

Many people across the country are sacrificing other things in life to pay for their private health insurance because they are anxious and concerned that they might not be able to get the health care they need.

The Government has consistently argued that the policies they were introducing would lead to downward pressure on premiums.

But that is not what we have seen.

People with private health insurance are now paying, on average, premiums up to 40% higher than they were in 2001.

There have been eight successive increases in health insurance premiums, every one of them having been ticked off by the minister.

And this bill may in fact contribute to a further rise in premiums. The Government has suggested that the need for additional resources for the Ombudsman that will result from the extension of its powers as a result of this bill will be funded through a levy on health funds.

It is quite possible that these increased costs to health funds would simply be passed onto consumers in the form of increased premiums.

And it is not just ever increasing premiums. Consumers are also facing ever increasing gap fees. Each year, thousands of Australians are forced to fill the gap between the charges of the health care providers and the charges that the health insurance funds cover.

Gap payments to doctors increased by 19.2 per cent in 2003-04, according to the private Health Insurance Administration Council.

In July 2005 Minister Abbott launched a report that confirmed that 44 per cent of hospital visits attract a gap of $720 on average.

Gap fees are increasing and consumers frequently do not know they are going to experience these out of pocket expenses or the extent of them.

High gap payments seriously undermine any value in having private health insurance coverage and yet rather than try and get doctors to stick to the Medicare Schedule the Government is simply saying that doctors should let patients know how much money they will have to find on top of their health insurance premiums.

This bill does not have many controversial elements and there is some potential that it will increase the ability of the private health insurance ombudsman to protect the interests of consumers - as such the Australian Democrats will be supporting it.

The Democrats are supportive of any moves that will potentially provide greater consumer protection and given this bill’s provision which places consumer protection front and centre when it comes to the focus of the powers and actions of the Private Health Insurance Ombudsman, we are supportive of the bill.

We do note the concerns that have been raised about the lack of consumer consultation about these changes.

It is certainly unfortunate to say the least that there was no consultation with consumers and consumer groups on the proposed changes to a body that is set up to help consumers with health insurance problems.