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Wednesday, 22 June 1994
Page: 1878


Senator HERRON —My question is directed to the Minister representing the Minister for Human Services and Health. On 1 June, and again on 2 June, the minister said:

For a start, a number of the people dropping out of the private health insurance system are people who are young and healthy or people . . . who are healthy.

In fact, the minister crowed about it three times. Is it true that the only figures available to the government subdivide the age groups into those over 65 who have private insurance and those under 65—there are no other figures available? Was the minister deliberately misleading the Senate or was she attempting to mislead the Australian public?


Senator CROWLEY —On all the evidence presented to me on advice and that I have read, there is agreement that the largest number of people dropping out of private insurance are those who are young. There is no dispute about that from all of those people who have an expert opinion on this matter. If Senator Herron is concerned about private health insurance, I sincerely hope he is just as concerned about the Access Economics report released yesterday which had a whole lot to say about private health insurance. I refer in particular to the fact that it said they had been overcharging like wounded bulls, salting away reserves—


Senator Herron —Mr Deputy President, I take a point of order. I draw Senator Crowley's attention to the question. I am happy to debate that point but, on the question of relevance, that bears no relationship to the question I asked.


The DEPUTY PRESIDENT —I think it is premature to make judgments about whether or not Senator Crowley is developing an argument in line with the question.


Senator CROWLEY —The presumption in the question is that because young people—or not young people—are dropping out of private health insurance, private health funds are in difficulty or even crisis. There was a very interesting document released yesterday by the AMA—or at least its economic advisers, because the AMA commissioned the work from Access Economics—which points out that there is absolutely no crisis in private health insurance.   Indeed, while they could have been addressing the cost of private health insurance to young people, families and older Australians, they have been charging well above what was necessary and salting away that money in increased reserves.

  That is very telling, in the face of the claim that there is a crisis in the private health insurance industry. It entirely endorses recent reports, what the government has been saying and what I have been saying on behalf of the minister in this place: that there is no crisis in private health insurance. But none of that moves away from the point that young people, in the large part, are dropping out of private health insurance. That is the understanding and that is the evidence that is given.

  The most important thing about this report is that it points out that if one were looking at trying to keep more people in private health insurance—particularly young people—one would not want to increase the charges for private health insurance or maintain them at a high rate. The report is a dreadful vindication of what the government has been saying about there being no crisis in private health insurance; there is not.

  It is very interesting now to see the fancy footwork as the private health insurance industry wants to say that this report does not tell the whole truth. Yes, it does. The reserves have dramatically increased. The figures I have had provided to me show that since June 1993 reserves have increased by $150 million and are over 1 1/2 times those required to meet the statutory solvency level.


Senator Crane —On a point of order: Senator Crowley has now had another two minutes to develop an answer to the question. Senator Herron's question asked whether or not the government had available statistical evidence for groups over 65 and under 65, and whether the government had that information when the minister made that statement. She has not addressed that particular question. She has had another two minutes since the previous point of order was taken. I request you, Mr Deputy President, to ask her in the minute remaining to her to address the question that was put by Senator Herron.


The DEPUTY PRESIDENT —Senator Crowley, it would certainly help me if you would start to answer the question in more detail.


Senator CROWLEY —I will, Mr Deputy President. I have already answered the question, but I have got time and I am happy to tell opposition senators again, seeing they have not got the point. The evidence is that it is the young people who are dropping out of private health insurance. Why? Because the costs are so high. Why? Because the private health funds have been raising the price, overcharging and salting away the profits for reserves, which they could have been passing on to people, making that price cheaper and, therefore, encouraging young people to take health insurance. I would have thought the answer was very direct, Mr Deputy President, and worth noting.


Senator HERRON —Mr Deputy President, I ask a supplementary question. Would Senator Crowley ask Senator Faulkner about the Estimates Committee C hearing last night when the departmental representatives were asked this question and they categorically stated that they had no information whatsoever and that no information was available? I ask Senator Crowley to please check with her own department, the Minister for Human Services and Health, and Senator Faulkner who chaired last night's hearing of Estimates Committee C, or provide the evidence that she says she has because she is the only one in Australia who has that evidence.


Senator CROWLEY —That question is trawling all over the place. The evidence is quite clearly documented here, there and everywhere. From the evidence provided to me, it is largely young people who are dropping out of private health insurance; but there is no dispute that lots of people are dropping out of private insurance. Yes, there is information and, if Senator Herron wants it provided in further detail, I will certainly see what I can get for him. The reason most people are leaving private health insurance is that the funds have been putting their costs up and not providing the service that assists people. If there is anything further that I can find or provide for Senator Herron, I certainly will.


Senator Gareth Evans —Mr President, I ask that further questions be placed on the Notice Paper.