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Tuesday, 14 February 2012
Page: 1099


Mr SCHULTZ (Hume) (13:19): I rise to raise my very serious concerns regarding the Fairer Private Health Insurance Incentives Bill 2011 and cognate bills and the inevitable implications for both the private and public health sectors in Australia, should the bills be passed. It was interesting to hear the comments of the previous speaker, the member for Fowler—a member of a government that has never honoured promises to the Australian people.

The Minister for Health asserted last week in question time that the Labor government want to implement this legislation so that they can spend every dollar well—that is, siphon rebate moneys paid to hardworking Australians with private health insurance towards Labor initiatives in the health sector. I want to know why hardworking Australians should believe that Labor are suddenly going to spend every dollar well when they do not have the track record necessary to make such a commitment, which is particularly concerning when we are talking about health. I often use the phrase, 'Don't believe what Labor say, look at what they do,' and I think people are doing that more today than they were a couple of years ago.

This is the third time the parliament has considered this legislation. It was introduced in the last parliament, despite explicit promises at the 2007 election:

Federal Labor has made it crystal clear that we are committed to retaining all the existing private health insurance rebates.

That was a quote from a media release from the then Minister for Health and Ageing, Nicola Roxon, on 26 September 2007.

In stark contrast to the Labor Party, the coalition believes all Australians should have access to affordable health care and real choice in managing their healthcare needs. The coalition has strongly supported providing all Australians with choice through affordable private health insurance.

The measures currently before the House are expected to have considerable impact upon some 52.9 per cent of Australians with private health insurance through direct increases to insurance premiums, which will force people out of private health and into the public health system. In turn this will affect all Australians who seek health care, no matter how much money is thrown their way.

A total of 2.4 million Australians will be directly affected by these changes, with immediate increases in premiums, from 14 to 43 per cent, depending on their income tier. As many as 175,000 Australians are expected to withdraw their private health cover altogether within the first year alone—increasing to 1.6 million over five years, according to a Deloitte analysis. This huge influx of numbers from private health into the public health system will create insurmountable problems for an already overburdened system as more and more individuals and families are forced to relinquish their right to private health care as a result of the Labor government's proposals. This increased burden will not only result in more and more debate about the inefficiencies and incompetencies of our health system; it will also, significantly, fail to achieve anything in the provision of health care in this nation.

I am particularly concerned for healthcare services for my constituents within my electorate of Hume, for whom the adverse effects of changes to private health insurance will be costly. I am against this legislative change as it will damage regionally based health services and discourage health professionals and services—which we remain in desperate need of—from coming to country areas.

As a result of the introduction of the private health insurance rebate, the Medicare levy surcharge and Lifetime Health Cover under the previous coalition government, private health insurance coverage increased significantly, from 34 per cent in 1996 to over 44 per cent by 2007.

The issues around the impact that this change will have on country people in particular are very significant and should not be treated as lightly as they are being treated by those on the other side. Over 40,000 residents of Hume, the equivalent of 46 per cent of the electorate, hold some form of private health insurance. This significant proportion of constituents will be directly affected by a rise in insurance premiums, which will see a majority forced to downgrade or drop their cover altogether. This will place significant additional stress upon public hospitals and specialist services across the electorate.

I believe there are people who are currently on elective surgery waiting lists who have been waiting, in some instances, up to 18 months in the areas that I represent in the electorate of Hume. We will see nothing positive in this move by the current government, with its ideological attack—class warfare—on private health insurance. This blatant cost-shifting measure is irresponsible as it takes away my constituents' rights to accessibility of health care.

The introduction of legislation that will impact so significantly upon the way in which Australians choose to ensure and safeguard their own health is indicative of Labor's utter contempt for their right to choose. Labor is once again legislating for the removal of the average Australian's right to choose what is in their own best interests in terms of health care, a right which enables people such as me to receive timely and urgently needed surgery.

What is this change going to do for people who may be in a situation like I was in February 2011, when I had major surgery? I was fortunate, because of my private health cover, to get access to some IT equipment that is going to prolong my life for the next 15 or 20 years. Why are we not thinking about the impact that this attack on private health insurance is going to have on those people who are struggling and who were referred to by the previous speaker? They are struggling and going out of their way to raise enough money to put into insurance schemes so that they do not have to be confronted with a significantly costly outcome from a piece of major surgery in the future. I dread to think that any constituent of mine experiencing a life-threatening illness will not be able to receive the care they need because an increase in private health insurance premiums as a result of this legislation has forced them to drop out of private health insurance and go onto public health waiting lists.

It must be made clear that the implications of this measure do not only affect high-income earners who will cease to receive private health insurance rebates; they will impact upon the average Australian who scrimps and saves to provide their family with peace of mind, knowing that their sacrifices will have been worth while when urgent health care is required, as I alluded to in my previous comments. These people are going to be penalised for taking greater responsibility for their health, and the rest of Australia will suffer as a result of the inevitable flow-on effects across the system.

In addition to the impact upon private health membership in Australia and the consequences for the public health system in the process, the implementation of a means-tested rebate is yet another way in which this Labor government has proposed to bureaucratise the administration of health care in this country. Labor has also once again created ideological aspersions about those who have private health insurance in Australia, as being undeserving of the 30 per cent rebate.

Every dollar of funding provided for the private health insurance rebate saves $2 of costs that are then paid by private health insurers. Private hospitals treat 40 per cent of all patients in Australia. The people treating that 40 per cent make up about 60 per cent of the surgeons that operate in this country—great surgeons with great skills, who are amongst some of the best in the world. In 2009-10, private hospitals treated 3.5 million patients. Private hospitals perform the majority of elective surgery in Australia, approximately 64 per cent. Twelve million Australians, or 52.9 per cent, have private health insurance. Ten point three million people, or 45.6 per cent, have hospital treatment cover.

Let us look at the impact that this change by the government will have. A 2012 Ipsos survey found that 64 per cent of the population believed that the $4.5 billion a year the government spent on the rebate was a good use of taxpayer money. The change will impose an enormous compliance burden on the industry and individuals completing their tax returns. Private health insurers will have to make significant changes to their systems to be able to adjust premiums according to incomes. It is still not clear—which is not unusual for this government, because it does not do its homework—how the rebate will be administered under these arrangements, especially where a person is not able to accurately predict their income for the current financial year. There are many people in professions that cannot do that. Of course, that is not known to those people in the bureaucracy, who have their regular rates of pay coming to them on a day-to-day, week-by-week, month-by-month, year-by-year basis. The government owned insurer, Medibank Private, has predicted that 37,000 of their members alone will drop their cover and that 92,500 will downgrade. That is considerably more than the deceptive figure of 27,000 that the minister has claimed will drop their cover throughout the entire sector. So once again we have got the Labor Party spin and deceit out there, not telling the people of Australia the full truth of what they are about.

Deloitte analysis of the changes show that, in the first year, 175,000 people are expected to withdraw from private hospital cover and a further 583,000 are expected to downgrade. Over five years it is expected that 1.6 million will drop cover and that 4.3 million will downgrade. The government has yet to disclose the numbers of people expected to downgrade, but as premiums increase significantly for those in the income tiers it is reasonable to expect they will seek cheaper products, which will have second-round effects for public hospitals. Deloitte predicts that private health insurance premiums will rise 10 per cent above what they would otherwise be. There will be $3.8 billion in additional recurrent costs for the public hospital system. The change will also have an impact on access to allied health services, with 2.8 million people with general treatment cover expected to withdraw and 5.7 million expected to downgrade over five years.

This bill is the result of the Labor government once again misleading the public as to what they would undertake in government. I oppose this legislation because it will create even more pressure on the public health system by forcing Australians with serious health issues to wait in a life-threatening queue for treatment while well-equipped private hospitals, surgeries and their associated professional medical teams stand by.