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Tuesday, 17 March 1987
Page: 980

(Question No. 4801)

Mr Porter asked the Minister for Health, upon notice, on 17 October 1986:

(1) How will the $1m announced in the 1986-87 Budget for the Health Benefits Reinsurance Trust Fund be used in relation to the community rating principle.

(2) What is the financial status of the Fund as at 30 June 1986.

Dr Blewett —The answer to the honourable member's question is as follows:

(1) The purpose of the reinsurance account arrangements is to support the policy of community rating by spreading the burden of heavy-drawing contributors between all registered health benefits organisations. The arrangements operate by enabling organisations to debit their reinsurance account with basic table benefits paid to contributors in excess of 35 days in any 12 month period. At the end of every quarter the total amount debited to reinsurance accounts in each State is ascertained and after deducting each State's share of the Commonwealth contribution, the remaining amount is shared between organisations on a membership basis. The $1m appropriated to the Trust Fund for 1986-87 will therefore reduce the amount of benefits liability to be shared by organisations by a similar amount.

(2) The Trust Fund had a nil balance at 30 June 1986. The Fund operates purely as a mechanism through which money is received from organisations with less than average benefits liability for their reinsurance account members and paid to the organisations with above average benefits liability. The Commonwealth contribution for the quarter is paid into the Fund at the time of the settlement. Apart from the brief period over which the settlements are made there are no moneys held in the Trust Fund.