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Tuesday, 14 February 2012
Page: 1106

Mrs ANDREWS (McPherson) (13:46): Today I rise to speak on the Fairer Private Health Insurance Incentives Bill 2011 and associated bills. I note that it is the third time this legislation has been brought before the parliament. I do not support this bill. It is yet another Labor government attack on the aspirations of all Australians, their choices and their cost of living.

I would like to begin by highlighting the poor history that Labor has on this issue and what appears to be an entrenched pattern of behaviour—which is not to honour its promises. At the 2007 election, Labor promised Australians that if it were elected to government all existing private health insurance rebates would be retained. Like most of the promises made by Labor, it was a commitment that it would not keep. In May 2009, less than two years after forming government, the Labor government announced that there would be changes to private health insurance. This was near the beginning of what would be a long list of appalling policy backflips from this government. I am not sure whether this was a promise that the Labor government set out intending to keep or whether it never had any intention whatsoever of keeping it from the start. However, whatever its intentions were, the reality is that the Gillard government is pushing ahead with its poor public health policy, walking away from a key commitment and demonstrating little regard for the impact that this will have on the everyday lives of millions of Australians.

As Michael Roff, Chief Executive Officer of the Australian Private Hospitals Association, recently said:

Means testing the private health insurance rebate will affect everyone. If you have health insurance you will pay more, regardless of your income. If you rely on the public system you will wait longer for treatment and the increased cost to taxpayers will outweigh any savings the government makes.

Anyone who tells you that you won't be affected doesn't understand the full impact of the measure.

The Gillard government's plans to means test the private health insurance rebate through this legislation will mean that private health insurance becomes more expensive for 2.4 million Australians. For these people there will be an increase in their premiums, which, depending on their income tier, will be 14 per cent, 29 per cent or 43 per cent. This is a significant hit on household budgets, and it comes at a time when singles, couples and families are continually being hit with rising costs.

The 30 per cent rebate is only a relatively small part of total healthcare expenditure—less than 10 per cent. It is important to note that the rebate has increased proportionately by only 0.2 per cent over 10 years. It is therefore hard to rationalise the claims by the Labor government that this is the fastest growing area of health expenditure. It is also difficult to understand why, when this rebate has not escalated significantly over the past 10 years, the Labor government is prepared to inflict an additional cost burden on so many Australians.

I would now like to look at some key statistics relating to private health insurance—statistics that demonstrate the inherent danger in Labor's proposed changes. Over 12 million Australians or over 52 per cent of our population have either hospital or ancillary or both types of private health insurance cover. Over 45 per cent of the population—that is, approximately 10.3 million people—has hospital cover. Figures for 2011 from the Australian Health Insurance Association, now known as Private Healthcare Australia, show that 71,174 people from my electorate of McPherson on the Gold Coast are covered by private health insurance. The fact that such a large proportion of Australians seek to have private health insurance cover is a positive, and it should be recognised as such. It should not be seen by the Labor government as another opportunity to impose a disincentive, which is precisely what means testing the private health insurance rebate is.

I note particularly our senior Australians who, as they age, become more frail and focused on their health needs. By taking out private health insurance our older Australians—pensioners, part-pensioners and self-funded retirees—find peace of mind knowing that they have chosen their health coverage and are not reliant on the public system. There are two important aspects which Labor will be harming: firstly, the choice of individuals to take out private health insurance and the opportunity and means to do so; and, secondly, the pressure which is taken off the public health system by the private health system.

The impact on seniors is significant. On the Gold Coast we have a large seniors population—people who have worked hard, saved and done their very best to get ahead. And now, at a time when their earning potential is likely to be not as great as it was five, 10 or maybe 20 years ago and they have reached the stage in their life where they need more health and medical support, they are faced with difficult choices because the government is going to means test the private health insurance rebate. What can they do? They can reduce their overall expenditure, which for many is simply no longer possible, they can reduce their level of private health cover or they can withdraw from the private health sector altogether and rely on the public health system. None of these are attractive options. None of our seniors should be placed in a position where they need to be considering this decision.

The government is attempting to justify these changes by claiming only the rich will be affected. This is just not true. I mentioned earlier that there were 12 million Australians who have hospital cover, ancillary cover or both types of private health insurance cover. Government figures show that 5.6 million people have an annual household income of less than $50,000 and, of those, 3.4 million have an annual household income of less than $35,000. These are not rich people, as claimed by the government, and it is their premiums which will rise courtesy of the Gillard government's private health insurance changes.

We are fortunate enough in Australia to have a healthcare system that allows us to present to a public hospital and receive treatment at no cost. This is a principle supported by both sides of politics in Australia. What we do not want to do is push people out of the private health system and force them into the public health system. The government claims it is trying to get the balance right, but the reality is that these proposed changes will not get the balance right. They will simply overload an already stretched public health sector.

The public health system in Australia is under pressure, there is no doubt at all about that, and we need to take steps to alleviate that pressure not increase it. An obvious way to do so is to encourage more patients to access private health providers. Private hospitals treat 40 per cent of all patients in Australia, equating to 3.5 million patients in 2009-10. And most of the elective surgeries are performed in private hospitals as well. The private health insurance rebate has seen an additional eight million patients treated in private hospitals over the past 10 years. This has taken pressure off our public health system and has saved taxpayers $26 billion. We need to continue to encourage Australians to take up private health insurance cover. We should not be implementing policies that will force people out of private hospitals and into the public system. In 2009-10 there were approximately 37 registered private health insurers offering a range of policies. Approximately $12.23 billion of benefits were paid by these private health insurers to policyholders during this period.

There is no doubt that this legislation will drive up the cost of living and detrimentally affect those millions of Australians I mentioned earlier who are not rich but have private health insurance. For those Australians who do have private health insurance there will be an effective increase in their premiums of between 14 and 43 per cent. Premium rises are already driven by several factors, such as an ageing population, that increase utilisation and benefit outlays. Younger people are also forgoing health insurance and this has resulted in adverse selection, despite the fact that they will endure higher premiums the longer they do not take up insurance. Taking into account these factors, which already play a role in premium increases, it is amazing and very disappointing that this government is still happy for premium increases of between 14 and 43 per cent to take place.

People in my electorate of McPherson on the Gold Coast are already hurting from increases in the cost of living and they cannot afford yet another Labor government induced price increase like we have seen in electricity, water, petrol and groceries. The southern Gold Coast also has a significantly older population. Those who have private health insurance will be hit hard. Many of these seniors are on fixed incomes and these increases in their premiums could force them out of their private health cover altogether. There are people who just will not be able to withstand these increases and they will either opt out of private health insurance or change to less expensive coverage.

The government knows this but claims that there will only be 27,000 people with private health insurance who will drop their cover. But a Deloitte analysis of the changes predicts significantly different figures. Deloitte's figures show that 175,000 people will withdraw from private hospital cover in the first year of these changes. Their analysis also predicts that 583,000 people will downgrade their private cover. Medibank Private for example predicts that 37,000 of its members will drop their cover, while 92½ thousand will downgrade their cover. Deloitte's analysis predicts that over the following five years 1.6 million Australians will drop their private health cover and 4.3 million will downgrade it. The people who drop their private health cover will end up in the public hospitals. Why would a government seek to implement a change such as this, which further puts the squeeze on our already stretched public hospitals?

The public health system on the Gold Coast is already under significant pressure to deliver the health services needed in a region that has both a growing and an ageing population. I believe that we are a nation of people who ultimately want to help ourselves by making the right choices for ourselves and our families. Australians invest money towards their health care and by doing so help alleviate the costs of government. If cheaper outcomes are achieved for government and choice of healthcare service is achieved by individuals then we ultimately reach a mutually beneficial balance between costs and service providers. The Gillard government's changes to private health insurance will not do this; but rather exacerbate current public health system pressures and push up already high costs of living.

I would like to make it unequivocally clear that I am extremely concerned about this bad health policy proposed by the Gillard government. The people of McPherson, particularly pensioners and low-income earners, will be most vulnerable to these changes. While Labor remains consistent about its inconsistency in policy commitments, we on this side of the House stay committed to our opposition to these changes. We oppose the means testing of the private health insurance rebate and increases to the Medicare levy surcharge.

The SPEAKER: Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The honourable member will have leave to continue speaking when the debate is resumed.