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Thursday, 14 May 1987
Page: 3271


Dr BLEWETT (Minister for Health)(9.06) —I move:

That the Bill be now read a second time.

The Health Legislation Amendment Bill is an essential part of the Government's economic strategy. It gives effect to certain measures announced by the Treasurer (Mr Keating) in this place on Wednesday, 13 May 1987 that relate to the health portfolio. There are two changes covered by the Bill which are to come into effect from 1 August 1987. The first amends section 10 of the Health Insurance Act 1973 and the second amends section 4 of the National Health Act 1953.

The first amendment-clause 4-is the more significant. It changes the level of Medicare benefits for professional services received by persons while private in-patients of a hospital or a day hospital facility and therefore increases the gap benefits payable, that is, the difference between Medicare benefit and schedule fee. Private health funds will be required to extend the coverage for gap benefits on the basic table so that all privately insured patients will continue to receive the full schedule fee for all in hospital services. To keep the administrative arrangements as simple as possible, doctors will be required to identify in hospital services on their accounts and health funds will only pay gap benefits on written advice from the Health Insurance Commission.

The Government gave careful consideration to the Medicare arrangements and was most concerned to ensure that the main principles of Medicare were not changed. These are that all Australians should receive protection against the high cost of medical treatment on a fair and equitable basis. Accordingly, it was decided that there would be no changes to the level of Medicare rebate for professional services received outside a hospital or for such services provided as out-patient services by a hospital or day facility.

The changes in respect of professional services rendered to an in-patient of a hospital or day hospital facility will reduce the Medicare benefits from the present 85 per cent of the schedule fee, with a maximum gap of $20, to a flat 75 per cent of the schedule fee. This will mean that the significant savings to the Commonwealth Budget of about $105m in a full year-$80m in 1987-88-can be achieved with a minimum effect on individual patients. People with private insurance may have to meet a small increase in contributions, depending on the capacity of individual health funds to absorb the increase. Significant increases in out-of-pocket expenses to individuals will be avoided.

Clause 4 also contains provision for regulations that may allow for certain professional services to attract the 85 per cent rate of benefit. This will allow for flexibility in the arrangement, for example, in the event of changes in technology or treatment practices.

The second amendment, which is contained in clause 6, has the effect that any professional service that is rendered to the patient either before the actual time of admission or after discharge will attract a Medicare benefit of 85 per cent with a maximum gap of $20 instead of the new private in-patient rate of benefit of 75 per cent of the schedule fee. This is a change from the existing arrangement where any professional service rendered to a patient on the day of admission or day of discharge, regardless of whether the patient was actually in hospital, attracted gap benefit. I present the explanatory memorandum to this Bill. I commend the Bill to the House.

Debate (on motion by Mr Shack) adjourned.