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Health Legislation Amendment (Medicare and Private Health Insurance) Bill 2003
Schedule 1 Amendments relating to out-of-hospital insurance plans

   

Health Insurance Act 1973

1  After subsection 126(5A)

Insert:

          (5B)  This section does not apply in relation to a contract of insurance that is an out-of-hospital insurance plan entered into by a registered organization under Division 4B of Part VI of the National Health Act 1953.

National Health Act 1953

2  Subsection 4(1)

Insert:

gap charge , in relation to an out-of-hospital service, means the difference between the total charge for the provision of that service and the medicare benefit payable in respect of that service.

3  Subsection 4(1)

Insert:

gap charge threshold , in relation to an out-of-hospital insurance plan and to a particular calendar year during all or a part of which that plan is in force, means a total of $1000:

                     (a)  if the plan covers only one person—that is incurred by the person by way of gap charges; or

                     (b)  if the plan covers more than one person—that is incurred collectively by the persons covered by the plan by way of gap charges;

in respect of out-of-hospital services that are provided during that calendar year or the part of that calendar year that the insurance plan is in force (whether or not those services are provided during a waiting period in respect of the plan).

4  Subsection 4(1)

Insert:

out-of-hospital insurance plan means a policy of health insurance offered by a registered organization to meet all reimbursable gap charges in respect of out-of-hospital services that are provided to a person covered by the policy.

5  Subsection 4(1)

Insert:

out-of-hospital service means a professional service in respect of which a medicare benefit is payable other than a professional service:

                     (a)  of a kind referred to in paragraph 10(2)(a) of the Health Insurance Act 1973 ; or

                     (b)  that is declared by the regulations not to be an out-of-hospital service for the purposes of this Act.

6  Subsection 4(1) (definition of waiting period )

Repeal the definition, substitute:

waiting period means:

                     (a)  in relation to a person who is a contributor to the health benefits fund conducted by the registered organization because the person contributes for benefits under an applicable benefits arrangement or a table of ancillary health benefits—a period:

                              (i)  that starts on the day on which the contributor became a contributor for those benefits; and

                             (ii)  during which, under the rules of the organization, the contributor is not entitled to benefits under that arrangement or table; and

                     (b)  in relation to a person who is a contributor to the health benefits fund conducted by the registered organization because the person subscribes to an out-of-hospital insurance plan offered by a registered organization—a period specified under section 73BDEE by the registered organization offering the plan as the waiting period in respect of the plan.

7  Subsection 4(1)

Insert:

reimbursable gap charge , in relation to an out-of-hospital service, means the gap charge for that service, or any part of the gap charge for that service, if:

                     (a)  the out-of-hospital service is provided to a person covered by an out-of-hospital insurance plan; and

                     (b)  the gap charge is not incurred during a period that is a waiting period imposed in respect of the persons covered by the plan; and

                     (c)  the gap charge, or that part of the gap charge, has not been counted by the Health Insurance Commission in establishing that the gap charge threshold has been reached in relation to that plan and the year in which the service was provided.

8  Subsection 67(4) (after paragraph (a) of the definition of health insurance business )

Insert:

                    (aa)  with respect to loss arising out of a liability to pay fees or charges in relation to the provision in Australia of an out-of-hospital service; or

9  Subsection 73AAI(2) (after paragraph (a) of the definition of health insurance product )

Insert:

                    (aa)  any out-of-hospital insurance plan; or

10  Paragraphs 73AAJ(a) and (b)

After “paragraph (ba) of Schedule 1)” (wherever occurring), insert “or in accordance with an out-of-hospital insurance plan of the organization”.

11  Paragraph 73AAJ(c)

Omit “whether or not”, substitute “so far as an applicable benefits arrangement of the organization is concerned—whether or not”.

12  Paragraph 73AAJ(d)

After “an applicable benefits arrangement”, insert “, or an out-of-hospital insurance plan”.

13  After Division 4A of Part VI

Insert:

Division 4B Out-of-hospital insurance plans

73BDEB   Definition

                   In this Division:

insurance plan means an out-of-hospital insurance plan offered under section 73BDEC.

73BDEC   Registered organization may offer insurance plans

             (1)  A registered organization may, at any time, offer a contract of private health insurance that constitutes an out-of-hospital insurance plan.

             (2)  An insurance plan takes effect from the date specified in the plan.

             (3)  The date specified cannot be earlier than 1 January 2004 or the date on which a person becomes a party to the contract of insurance, whichever occurs last.

             (4)  An insurance plan must be distinct from any other contract of private health insurance offered by the registered organization.

             (5)  An insurance plan must not exclude, by way of election or otherwise, any out-of-hospital services.

             (6)  Subject to section 73BDED, a registered organization offering an out-of-hospital insurance plan must not deny access to persons who wish to enter the contract of insurance or be covered by it, except to the extent provided by the definition of restricted membership organization in subsection 4(1).

73BDED   Who may be covered by an insurance plan

                   If an insurance plan covers more than one person, then each person, other than a person:

                     (a)  who is already a contributor to the health benefits fund conducted by the registered organization offering the plan and who subscribes to the plan; or

                     (b)  who becomes a contributor to the health benefits fund conducted by the registered organization offering the plan by reason of subscribing to the plan;

must be a dependant of that contributor.

Note:          Subsection 4(1) includes a definition of dependant , in relation to a contributor to a health benefits fund conducted by a registered organization.

73BDEE   Waiting periods

             (1)  Subject to subsection (2) and to section 73BAA, a registered organization may, in relation to the person, or all persons, covered by an insurance plan, specify a waiting period of not more than 6 months from the date the plan was first entered into.

             (2)  A registered organization may not specify a waiting period:

                     (a)  in respect of a person:

                              (i)  who is already a contributor to the health benefits fund conducted by the registered organization offering the plan and who subscribes to the plan; or

                             (ii)  who becomes a contributor to the health benefits fund conducted by the registered organization offering the plan by reason of subscribing to the plan; or

                     (b)  in respect of any other person covered by an insurance plan;

if the person subscribing to the plan:

                     (c)  is a member of a registered organization in relation to an applicable benefits arrangement immediately before 1 July 2003; and

                     (d)  continues to be such a member in relation to such an arrangement until the person subscribes to the insurance plan.

Note:          Section 5A defines an applicable benefits arrangement.

             (3)  For the avoidance of doubt, a registered organization may not specify a waiting period in respect of any person covered by an insurance plan other than the waiting period referred to in subsection (1).

             (4)  The effect of a waiting period is that gap charges incurred in respect of any out-of-hospital service offered during the period to a person covered by the insurance plan are not reimbursable gap charges.

73BDEF   Registered organization may collect certain information for purposes of this Act and the Health Insurance Act 1973

             (1)  A person who proposes to enter into an insurance plan with a registered organization must notify it:

                     (a)  of the identity of the person, or of each person, who is to be covered by the plan; and

                     (b)  of the medicare number of the person, or of each person, who is to be covered by the plan and of the expiry date in relation to that number.

             (2)  A person who has entered into an insurance plan with a registered organization must notify it:

                     (a)  if there is a change in the identity of the persons covered by an insurance plan—of the change in the identity of those persons; or

                     (b)  if there is a change in the medicare number applicable to any person covered by the plan or in the expiry date in relation to that number—of the change to that number or that date;

as soon as practicable after the person becomes aware of that change.

             (3)  Information notified to a registered organization under this section is for the purpose of use:

                     (a)  by the registered organization to which it is supplied; and

                     (b)  if it is notified under section 73BDEG to the Health Insurance Commission—by the Commission;

in relation solely to the operation:

                     (c)  of an insurance plan in respect of persons to whom the information relates that are covered by the plan; and

                     (d)  of this Act and the Health Insurance Act 1973 in relation to the plan.

73BDEG   Registered organization to notify Health Insurance Commission of existence and coverage of insurance plan

             (1)  A registered organization must, as soon as practicable after a person enters into an insurance plan with the organization, notify the Health Insurance Commission:

                     (a)  that the plan has been entered into; and

                     (b)  the date on which the plan takes effect in accordance with section 73BDEC; and

                     (c)  of the identity of the person, or of each person, who is covered by the plan; and

                     (d)  of the medicare number applicable to the person, or to each person, who is covered by the plan and of the expiry date in relation to each such number; and

                     (e)  of such other matters relating to an insurance plan and the persons covered by it, necessary for the Commission to undertake its functions in relation to insurance plans, as are determined in writing by the Managing Director of the Commission.

             (2)  For the purposes of paragraph (1)(e), the Managing Director of the Commission must not make a determination requiring a registered organization to provide:

                     (a)  the tax file number of any person; or

                     (b)  information about the physical, psychological or emotional health of any person.

             (3)  Whenever there is notified to a registered organization a change in:

                     (a)  the identity of the persons covered by an insurance plan; or

                     (b)  the medicare number applicable to the person, or to each person, who is covered by the plan or in the expiry date in relation to each such number;

the registered organization must, as soon as practicable after it becomes aware of that change, notify the Health Insurance Commission of the change.

             (4)  If a registered organization becomes aware that there is a change in any of the matters notified by it in relation to an insurance plan under paragraph (1)(e), the registered organization must, as soon as practicable after becoming so aware, notify the Health Insurance Commission of the change.

             (5)  A notification to the Health Insurance Commission under subsection (1), (3) or (4) is a notification solely for the purpose of enabling the Commission:

                     (a)  to work out, in relation to the person or persons covered by an insurance plan, whether that person or those persons have reached the gap charge threshold in respect of a particular calendar year; and

                     (b)  when that person or those persons have reached the gap charge threshold in respect of a particular calendar year, to notify the registered organization offering the plan:

                              (i)  that the threshold has been reached; and

                             (ii)  of the out-of-hospital services whose gap charges were counted, or counted in part, in reaching that threshold; and

                            (iii)  if an out-of-hospital service was counted only in part in reaching the threshold—of the amount of the gap charge in respect of that service that was counted towards the threshold.

             (6)  Determinations made for the purposes of paragraph (1)(e) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901 .

73BDEH   Health Insurance Commission notification obligations

                   If the Health Insurance Commission is satisfied, on the basis of claims for medicare benefits made to it, that a person or persons covered by an insurance plan have, in a particular calendar year, reached the gap charge threshold in respect of that year, the Commission must, as soon as practicable after becoming so satisfied, notify the registered organization offering the plan:

                     (a)  of the fact that the gap charge threshold has been reached in respect of that person or those persons for that year; and

                     (b)  of the particular services whose gap charges were counted, or counted in part, in reaching that threshold; and

                     (c)  if part only of the gap charge for a particular out-of-hospital service was counted in reaching the threshold—of the amount of the gap charge in respect of that service that was counted towards the threshold.

73BDEI   Claim against registered organization by person covered by an insurance plan

             (1)  If:

                     (a)  a person is covered by an insurance plan; and

                     (b)  the Health Insurance Commission has notified the registered organization offering the plan that the gap charge threshold has been reached in respect of the plan and a particular calendar year; and

                     (c)  an out-of-hospital service is provided to that first-mentioned person or to another person covered by the plan in that calendar year; and

                     (d)  a gap charge is paid by that first-mentioned person or by another person covered by the plan in respect of that out-of-hospital service; and

                     (e)  the gap charge in respect of that service is, in whole or in part, a reimbursable gap charge in respect of that out-of-hospital service; and

                      (f)  the first-mentioned person has the capacity, under the terms of the insurance plan, to make a claim against the registered organization offering the plan;

then, subject to subsection (2):

                     (g)  the first-mentioned person may claim payment from the organization of an amount equal to the amount of the reimbursable gap charge in respect of that service; and

                     (h)  if the first-mentioned person makes such a claim and the organization is satisfied of the matters referred to in paragraphs (a) to (f)—it must pay to the person an amount equal to the reimbursable gap charge.

             (2)  Subject to sections 73BAA and 73BDEE, a claim may not be made to the registered organization offering an insurance plan by a person covered by the plan in respect of an out-of-hospital service provided during a waiting period in force in respect of that plan.

             (3)  Nothing in this section excludes any other method by which a person covered by an insurance plan may be reimbursed, by the registered organization offering the plan, an amount equal to the amount of a reimbursable gap charge in respect of an out-of-hospital service provided to a person covered by the plan.

73BDEJ   Regulations relating to portability and other matters

             (1)  If a person who is covered by an insurance plan (the old plan ) ceases to be covered by the old plan and, either immediately or at a later time, becomes covered by another insurance plan (the new plan ):

                     (a)  offered by the same registered organization; or

                     (b)  offered by another registered organization;

the regulations may set out the principles governing:

                     (c)  the application in relation to the new plan of any waiting period served, or partly served, in relation to the old plan; and

                     (d)  the counting towards a gap charge threshold relevant to the new plan of any gap charges incurred in relation to out-of-hospital services that would have counted towards a gap charge threshold in relation to the old plan.

             (2)  The regulations made for the purposes of subsection (1) apply to the exclusion of the principles set out in paragraphs (l), (la), (laa), (lab), (lb), (lba), (lc), (ld) and (le) of Schedule 1 to the National Health Act 1953 .

14  Paragraph 73BF(1)(a)

After “an applicable benefits arrangement”, insert “or an out-of-hospital insurance plan”.

15  Subsection 73BF(1)

Omit “in respect of that applicable benefits arrangement to the fund”, substitute “to the fund in respect of that applicable benefits arrangement or that out-of-hospital insurance plan”.

16  Subparagraph 73BF(3)(c)(i)

After “the applicable benefits arrangement”, insert “or out-of-hospital insurance plan”.

17  Subparagraph 73BF(4)(a)(i)

After “the applicable benefits arrangement”, insert “or out-of-hospital insurance plan”.

18  Paragraph 73BF(4)(a)

Omit all the words after subparagraph (ii), substitute:

                            direct the organization to admit the person as a contributor to the fund in respect of the applicable benefits arrangement or the out-of-hospital insurance plan to which the request relates; or

19  Subsection 73BFA(1)

Omit all the words after “a contributor”, substitute “to the health benefits fund conducted by the organization in respect of an applicable benefits arrangement or an out-of-hospital insurance plan, the person may request the Minister to direct the organization to accept the person’s contributions to that fund in respect of that arrangement or that insurance plan”.

20  Subparagraph 73BFA(3)(c)(i)

After “an applicable benefits arrangement”, insert “or an out-of-hospital insurance plan”.

21  Subsection 73BFB(1)

After “the applicable benefits arrangement”, insert “or out-of-hospital insurance plan”.

22  Paragraph 73BFB(4)(a)

After “the applicable benefits arrangement”, insert “or out-of-hospital insurance plan”.

23  Subsection 82ZQ(1) (after paragraph (e) of the definition of private health insurance arrangement )

Insert:

                    (ea)  an out-of-hospital insurance plan;

24  Paragraph (b) of Schedule 1

After “any applicable benefits arrangement”, insert “or out-of-hospital insurance plan”.

25  Paragraph (be) of Schedule 1

Omit “that applicable benefits arrangement”, substitute “the applicable benefits arrangement or out-of-hospital insurance plan by virtue of contribution to which they are, or are eligible to become, contributors to the health benefits fund”.

26  Paragraph (g) of Schedule 1

After “paragraph (ba))” (first occurring), insert “or with an out-of-hospital insurance plan of the organization”.

27  Subparagraph (g)(ii) of Schedule 1

After “paragraph (ba))”, insert “or that insurance plan”.

28  At the end of paragraph (lf) of Schedule 1

Add “or with any other provisions of this Act”.

29  Subparagraphs (m)(i) and (ii) of Schedule 1

After “paragraph (ba))” (wherever occurring), insert “or an out-of-hospital insurance plan of the organization”.

30  Subparagraph (m)(iii) of Schedule 1

After “applicable benefits arrangement”, insert “or an out-of-hospital insurance plan”.

31  Paragraph (ma) of Schedule 1

After “under an applicable benefits arrangement”, insert “or an out-of-hospital insurance plan”.

32  Paragraph (q) of Schedule 1

After “each applicable benefits arrangement,”, insert “for each out-of-hospital insurance plan,”.

33  Subparagraphs (q)(i), (ii), (iii) and (iv) of Schedule 1

After “the arrangement”(wherever occurring), insert “, insurance plan”.

34  Paragraph (s) of Schedule 1

After “an applicable benefits arrangement”, insert “or an out-of-hospital insurance plan”.

35  Subparagraph (t)(ii) of Schedule 1

Omit “or table of ancillary health benefits”, substitute “, an out-of-hospital insurance plan, or a table of ancillary health benefits,”.

Private Health Insurance Incentives Act 1998

36  Paragraph 19-1(2)(e)

Omit “or * combined cover”, substitute “, * combined cover or * out-of-hospital services cover”.

37  Section 20-5 (paragraph (a) of the definition of appropriate private health insurance policy )

Omit “or * combined cover”, substitute “, * combined cover or * out-of-hospital services cover”.

38  Section 20-5

Insert:

out-of-hospital services cover : a * private health insurance policy provides out-of-hospital services cover if it is cover under an out-of-hospital insurance plan offered by a registered organization under Division 4B of Part VI of the National Health Act 1953 .

39  Section 20-5 (at the end of the definition of type of cover )

Add:

               ; or (d)  * out-of-hospital services cover.