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Thursday, 19 June 2003
Page: 17022


Ms HALL (12:37 PM) —I will speak on the provisions of the National Health Amendment (Private Health Insurance Levies) Bill 2003 and the amendment as moved by the shadow minister. But, prior to doing that, I must make a few comments about the previous speaker's contribution to this debate. If there was ever any contribution that showed the philosophical bent of the government, it was that contribution. The government's philosophy is that you have a two-tiered system: you have a quality system for people that can afford to pay private health insurance and you have a second-rate system that is there to pick up the dregs—to support those people that cannot afford to have private health insurance.

The previous member also demonstrated in his contribution that he does not believe in accountability for private health insurance companies. Rather, he believes in just letting the market take its course and allowing private health insurance prices to increase while Australian families struggle to come to terms with the health insurance that this government is supporting as opposed to supporting Medicare and ensuring there is a quality universal health system that provides equal health services to each and every Australian. What the previous member did was argue for a two-tiered system—one where, if you pay for it, you get quality health care, and, if you cannot afford it, the government will step in and provide whatever assistance it can. That can really be demonstrated by the fact that this government has not made the commitment to public health in Australia that I believe it should.

There are a couple of issues that I would like to pick up on that the previous member mentioned. Firstly, he talked about cross-subsidisation. I would like to point out to the member that all Australian taxpayers are subsidising the private health insurance rebate, regardless of whether or not they have private insurance. For every dollar that is paid to the private health insurance rebate, 30c is contributed by Australian taxpayers. If an Australian taxpayer does not have private health insurance, he is subsidising the private health insurance of somebody who is better off than he is—presumably, given the previous member's contribution—and who can afford to take out private health insurance. Secondly, I would like to dispute the previous speaker's claim that there has been an improvement in quality. I would say there has been no qualitative research and there has been no outcome based assessment of the benefit of private health insurance, and I will touch on this a little later.

The previous speaker also stated that there had been a decrease in the gap that people are paying when they go into a private hospital. All members of this House would have had a similar complaint made to them as has been made to me—that is, the single most important issue to people that have private health insurance is that they have an operation in a private hospital and then they are confronted with a bill that they must pay. The member for Jagajaga said in her contribution that the gap was now $90.64 Australia-wide. In New South Wales, the state that I live in and the state that the people I represent in this House live in, that increases to $115. One out of every five services in a private hospital has a gap. That is significant and that is substantial, particularly if you go into a private hospital and have a knee replacement or cardiac surgery and find out that you have a bill in the vicinity of $1,000.

The other issue that was touched on was medical insurance indemnity and the impact that that has, because a number of people are being asked to pay $200, $300 or $400 to cover the medical indemnity insurance of the doctor operating in the private hospital. You only have to listen to the news today to see the impact that that is having on the provision of medical services, obstetrics and even GP services here in Canberra. I think that the government really needs to look at that.

This legislation arises from Australian National Audit Office report No. 32 1999-2000: Management of Commonwealth non-primary industry levies. This report questioned the constitutional validity of the Private Health Insurance Administration Council levy. The private health insurance industry's levies are imposed in four areas: the Private Health Insurance Administration Council levy, the collapsed organisation levy, the Acute Care Advisory Committee review levy and the Reinsurance Trust Fund levy. The question relates to section 55 of the Constitution, and the report queried whether the levy was a tax rather than a fee for service. This legislation has been drawn up to remove any uncertainty about that and to make sure that this levy can be collected.

The organisational levy is designed to protect contributors to private health insurance funds and to meet the liability of its members. The Minister for Health and Ageing may impose a levy on each registered organisation to help meet those liabilities. That is very important because the one thing that Australians expect, if they do pay into private health insurance, is that they will get the services for which they are paying, even if those services are not fully covered—as I have also mentioned. The bill authorises the collection of the four levies I have previously mentioned, with separate bills for the imposition of each levy. That is why the legislation that we have before us today has the title that it has.

There is one other new provision to the National Health Act, which authorises the PHIAC officers to enter and search the premises of private health insurance funds to locate documents. I query whether this is really necessary. It can be argued that those provisions already exist. I believe that the inclusion of these powers should be looked at. Whilst I am not opposing that part of the bill, I question why it was necessary to include it.

Moving to the amendment as moved by the member for Jagajaga, I would have to take the House to the words of the Prime Minister in the election of 2001. He gave an undertaking to the Australian people that private health insurance premiums would decrease. I have to say that is another example of the Prime Minister not being totally honest with the Australian people, because since then we have had an increase in private health insurance premiums of over 14 per cent.

The Australian people understand that the Prime Minister is committed to this two-tiered system of health in Australia. They understand that his philosophy drives him to support the private health insurance rebate—as it does the members on the other side of the House. But what the Australian people do not understand or accept is that the Prime Minister is not being completely honest with them. They find that disgraceful. So many times people contact my office—and other members on this side of the House, with whom I talk about these things—saying that the Prime Minister is not being truthful with the people of Australia. Believe me, members of the government, they do not like that.

I will run through some of the increases that have taken place in private health insurance premiums over the last three years. In March 2003, the private health insurance industry announced an average increase of 7.4 per cent. That followed a 6.9 per cent increase in April 2002. Altogether, that is a very significant increase of over 14.3 per cent. It is an increase that the Prime Minister promised the people of Australia in 2001 would not occur. He promised the Australian people that there would be a decrease, and we have this increase. Now I will inform the House of some of the increases this year: Australian Health Management Group, 19.6 per cent in April; CBHS Friendly Society, 15.4 per cent on 4 April; Defence Health Benefit Society, 4.8 per cent; Grand United Corporate Health Ltd, 9.1 per cent; and Health Care Insurance Ltd, 13.2 per cent in April. These are increases for this year. These are increases that people paying into private health insurance are being asked to pay. These are increases that the Prime Minister promised the Australian people that they would not have to pay. My advice to the Prime Minister and to the government is that it is not good enough. This is not what the Australian people expect from a government. They expect a government that honours the word of the Prime Minister—that honours the word that he gave to the people at that 2001 election and honours the word that there would be a decrease rather than an increase.

Add to that the fact that the health minister this year authorised an automatic CPI increase. That means that the government does not even have to approve it. This guarantees that each and every year Australians will face an increase in the amount of money they pay in health insurance. This hardly fits in with the words of the Prime Minister in 2001, when he said there would be a decrease. Instead, the Australian people have been guaranteed an increase in their health insurance premiums from here on.

I turn now to the rebate and the cost of that to Australian taxpayers—$2.4 billion. Now, with the latest increases, we have an extra $170 million each year. Over the next four years that will be $680 million—although, given what I just said about the automatic increase, it will in fact be greater than that over the next four years. We must remember, as I said at the beginning of my speech, that for every $1 increase in this health insurance premium all Australian taxpayers are being asked to pay an extra 30c in the dollar. That is not acceptable.

I have already touched on the gap and the automatic CPI increase. I would now like to spend a bit of time on the health insurance rebate and the fact that it is not outcome based. How effective is it? I believe any good policy should be outcome based. If you allocate money to something then you should assess it. You should look at whether it achieves outcomes, how cost effective it is and what it delivers to the Australian people.

My argument is that this has not been the case with the private health insurance rebate. There has been no objective evaluation of its effectiveness. No-one has looked at the clinical outcomes in hospitals, and the rebate has not been tied to cost restraints. In effect, money is given to the insurance industry without being tied to any objective assessment. I do not think that is good policy, I do not think it is going in the right direction and I do not believe that any government should allocate any money without some form of accountability. We only have to look at the accountability that people who are unemployed have to meet. If they do not meet the requirements set out in the Social Security Act and administered by Centrelink, then they are breached. Yet private hospitals and the private health insurance industry do not have the same sorts of outcome based requirements or the same accountability that people in other sections of the community have under other policies.

I argue very strongly that the way the rebate currently operates is not good health policy, because it does not look at health outcomes. Good health policies and good health outcomes are related. Without evaluating health policy against outcomes, you cannot determine whether or not it is effective. The private health insurance rebate, as it operates now, needs to be fully reviewed in terms of whether or not it delivers outcomes. I fully support the amendment moved by the shadow health minister and commend it to the House.