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Thursday, 19 June 2003
Page: 17016


Ms MACKLIN (12:07 PM) —The National Health Amendment (Private Health Insurance Levies) Bill 2003 and related bills rectify a technical problem identified in a recent report by the Australian National Audit Office. The report, entitled Management of Commonwealth non-primary industry levies, identified issues with the Private Health Insurance Administration Council administration levy having regard to the operation of section 55 of the Australian Constitution. Section 55 says:

Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.

To rectify this problem, these bills reimpose four health insurance industry levies and validate previous impositions of the levies with a view to removing any doubt regarding the technical validity of the levies.

The four private health insurance industry levies being reimposed are the Private Health Insurance Administration Council administration levy, the collapsed organisation levy, the Acute Care Committee review levy and the reinsurance trust fund levy. While the levies will still be administered by the council, the money collected under the levies will be placed into the consolidated revenue fund and then appropriated for the purposes of those levies. These levies apply only to the private health insurance industry. Only registered health benefits organisations are required to meet liabilities imposed through the levies. The purpose of the reimposition of the levies is not to increase the financial burden on the private health insurance industry. It does not involve a change in policy but, rather, corrects a technical defect to ensure that the legislation functions as it was originally intended.

Labor supports these bills as we, of course, support all good management of the Australian health care system, particularly the proper regulation and management of private health insurance. It is a shame, however, that we do not see more examples of responsible management of private health insurance coming through this House. Instead, what we see is the government's mismanagement and broken promises. To that end, I move the following second reading amendment:

That all words after “That” be omitted with a view to substituting the following words:

“while supporting the provisions of the Bill, the House:

(a) notes that before the 2001 election, the Prime Minister said that the Government's policies would “lead to reduced premiums” and that private health insurance would be “more affordable and attractive” to consumers;

(b) notes that since the election in 2001, the Government has approved increases in premiums of more than 14% and that as a result many families with private health insurance will pay an extra $300 to $500 extra in premiums than they did before the election in 2001;

(c) notes that families with private health insurance are facing substantial increases in out of pocket costs for medical care in hospitals, with the average gap now $90.64 - an increase of 77% since December 2000;

(d) notes that last year the Government announced that private health premiums would automatically rise by CPI every year, without the need for Government approval - dishonouring the Prime Minister's “absolute guarantee” and “honest guarantee” that his Government would approve all future private health insurance premium increases;

(e) notes that the average increase in private health insurance premiums of 7.4% this year will cost taxpayers more than $170 million extra each year, on top of annual spending of $2.4 billion;

(f) condemns the Howard Government for failing to ensure that private health insurance remains value for money for Australian families and value for money for Australian taxpayers”.

Perhaps the most glaring example is this government's absolute refusal to consider any review whatsoever of its 30 per cent private health insurance rebate, really showing its intransigence on this issue. Since the introduction of the rebate, the government has consistently failed to examine whether the rebate is an effective and responsible use of taxpayers' funds. The Commonwealth has a very serious responsibility in managing the health care system with a limited amount of money. How can the Commonwealth achieve the best health outcomes for Australian families? That is the task that faces us all.

The Howard government's private health insurance policies cost the Commonwealth taxpayer around $2.4 billion each year. When the rebate was introduced, the government asked the private health insurance industry for very little in return for this very substantial annual investment of taxpayers' money. No outcomes were asked of the private health insurance industry in terms of cost constraint or improved efficiencies. No outcomes were asked of private hospitals in terms of improving clinical outcomes or cost constraint. The money was simply given, and continues to be given, each year. It is legitimate for Australian health consumers, Australian taxpayers, to demand that the Commonwealth take its responsibility seriously and make sure that the money that is being allocated—all $2.4 billion of it—is spent in the most effective way to deliver the best health outcomes for the Australian people. Why not require outcomes to ensure a better health system and real health benefits for those who are sick?

We on this side of the House support a full and thoughtful review of the private health insurance rebate. The Minister for Health and Ageing has already had to make one embarrassing backdown to remove relaxation CDs, golf clubs and camping tents from the rebate, but no thought has gone into directing this rebate to where it can do the most good. Rather than responsibly supporting the Australian health system, the government's push towards private health insurance is costing Australian families more.

Before last year's election Prime Minister Howard and his government said that private health insurance would `be more affordable and attractive to consumers', but everywhere you look the costs of health care have been rising under the Howard government. From April this year millions of Australian families were hit with another $150 to $250 a year in costs as their private health insurance premiums rose by an average of 7.4 per cent. This is the second year in a row that the Howard government has approved health fund premium rises of more than double the rate of inflation, after last year approving average increases of 6.9 per cent. As a result of the two increases approved by the Howard government, together with the decision by some funds to abandon discounts for regular and up-front payments, many Australian families are paying between $300 and $500 more for their premiums than they were before the election in 2001. This is despite the Prime Minister promising at the last election—and it was obviously another non-core promise—that the government's policies would lead to `reduced premiums'.

While this year's average increase is 7.4 per cent, some fund members are paying considerably more than that. For example, some Government Employees Health Fund members face an increase of 45 per cent, with their premiums up from $164 to $239 a month, and MBF members with select hospital $1,000 excess products face a 25 per cent increase, with their premiums up from $65 to $82 a month. These are very significant increases. The figures are a slap in the face for Australians with private health insurance who believed the Prime Minister before the last election. They believed promises that we have now found to be false.

This year's increase will cost not only individual premium holders but also taxpayers. In fact, increases will cost taxpayers more than $170 million extra each year through the government's 30 per cent private health insurance rebate. That is an additional $680 million over four years, and that is on top of the $2.4 billion that the Commonwealth is already spending on the 30 per cent private health insurance rebate each year. For every dollar that premiums rise, taxpayers will contribute 30c. In September last year the Howard government announced that private health insurance premiums would automatically rise by the CPI every year without the need for government approval, dishonouring once again the Prime Minister's `absolute guarantee' and `honest guarantee' that his government would approve all future private health insurance premium increases. Australian families with private health insurance are now under greater financial pressure than before, despite the promise of the Howard government that its policies would see their premiums reduced. That has not happened.

Of course, premiums are not the end of it. People who need to go into hospital know that they are not only paying their health insurance premiums and seeing those go up more and more every year—even though the Prime Minister promised that it would be the opposite—but also facing substantial increases, as the latest figures show, in hospital gap payments, and the situation has worsened considerably over the last two years. Privately insured patients are still being hit with out-of-pocket costs for one in every five privately insured medical service provided in hospital. In March this year the average payment by patients for services where there remained an out-of-pocket cost for the patient was $90.64. That is the out-of-pocket payment once you have paid your private health insurance premiums. This is an increase of 75 per cent since December 2000. In New South Wales, patients can now expect to pay an average out-of-pocket cost of almost $115, which is more than double what it was two years ago. We have a government that is pouring taxpayers' money into private health insurance. It is not able to keep the cost of private health insurance down and patients are still having to pay more and more in medical fees when they go into hospital as private patients.

Last year private hospitals warned that privately insured Australians could face additional out-of-pocket expenses. So they are going to be paying more for not only their medical gap expenses but also their hospital cover—that is, their accommodation costs or bed, if you like. The private hospitals are saying that the increased out-of-pocket expenses could go as high as $150 for hospital treatment to cover the cost of medical indemnity insurance in private hospitals. That is yet another mess that this government has failed to address. Out-of-pocket costs are, as we know from so many people who have complained to us about them, a continual source of frustration for patients, who are already being asked to pay higher and higher private health insurance premiums.

Wherever you look, Australian families are facing increased health care costs under this government—whether they are in difficulty finding a bulk-billing doctor; in higher payments when they go to see a doctor, and certainly when they go to see a general practitioner and a specialist; in increased private health insurance premiums that are going up by more than double the CPI each year; in considerably higher gap charges when people use their private health insurance in hospital; or in the threat of a 30 per cent increase in the cost of essential medicines. This is what the Howard government is delivering to people in our community who need to use health care. At each and every turn this government is increasing the cost of health care to Australian families. Whether it is in going to a GP in their local community or going to see a doctor for treatment in a private hospital, in the private hospital charge itself or in the cost of private health insurance, over and over again we see this government continuing to increase the cost of health care to Australian families.

Once again, the clear evidence that is before us today is that this government has failed to deliver affordable health care to Australians when they need it. We have certainly seen extraordinary deception by the Prime Minister before the last election, when he promised that his policies would lead to reduced costs for health consumers. That has certainly not happened. It does not happen when people go to see a GP; it certainly does not happen when people go to see a specialist; it does not happen when you go to a private hospital; it does not happen when you see a specialist in a private hospital; and it certainly does not happen when you buy private health insurance. Time and time again, people are having to pay more and more for their health care as a direct result of the Howard government's policies.


The DEPUTY SPEAKER (Mr Lindsay)—Is the amendment seconded?


Ms Livermore —I second the amendment and reserve my right to speak.