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Monday, 18 June 2018
Page: 3115


Senator FIFIELD (VictoriaMinister for Communications, Minister for the Arts and Deputy Leader of the Government in the Senate) (17:38): I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

PRIVATE HEALTH INSURANCE LEGISLATION AMENDMENT BILL 2018

Private health insurance is an essential and valuable part of Australia's health system. This government is committed to making private health insurance affordable for the more than 13 million Australian families, young people and older Australians with private health cover.

People with private health insurance have the benefit of their choice of doctor, timing of treatment and, in many cases, shorter waiting times. They also obtain coverage for some health services not included under Medicare.

In 2015-16, the Government consulted widely with consumers through an online survey on their concerns with private health insurance. The Government also consulted with a wide range of organisations representing service providers, hospitals, insurers and consumers. This process identified a number of consumer concerns with private health insurance, including affordability, complexity, and a lack of transparency.

Following this process, the Government established the Private Health Ministerial Advisory Committee, made up of representatives of interest groups in the private health sector including consumers to consider and develop possible reforms to private health insurance to address these concerns.

Last October, the Government announced a wide ranging package of important reforms to make private health insurance simpler and more affordable for Australians. The reforms will help strengthen the viability of the private health system by addressing concerns about affordability, complexity and lack of transparency of private health insurance.

The private health insurance reform package was the result of extensive consultation, including through the Private Health Ministerial Advisory Committee.

The $1.1 billion reform of the Prostheses List announced as part of the reform package has already resulted in lower premiums for consumers. From 1 April 2018, health insurance policy holders will face an average weighted premium increase of 3.95 per cent; the lowest premium change in 17 years.

And, of course, the Government continues to spend over $6 billion per year on the private health insurance rebate which helps to make private health insurance affordable.

I am introducing three Bills today:

the Private Health Legislation Amendment Bill 2018;

the A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018; and

the Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018.

The first Bill I want to introduce is the Private Health Insurance Legislation Amendment Bill 2018.

This Bill will amend the Private Health Insurance Act 2007 (the Act) and associated legislation to support a number of the reforms the Government announced last year.

Specifically, this Bill will:

increase maximum excess levels for products providing an exemption from the Medicare levy surcharge;

allow for age-based premium discounts for hospital cover;

strengthen the powers of the Private Health Insurance Ombudsman;

allow private health insurers to cover travel and accommodation costs as part of a hospital product for people attending health services;

improve information provision for consumers;

reform the administration of second tier default benefits arrangements for hospitals;

facilitate the termination of closed products and migration of people to new products; and

regularise the position of policies including benefit limitation periods.

It is essential for the health of our nation that we continue to maintain a strong and competitive private health insurance market. The measures outlined in this Bill will support reforms that do this.

A NEW TAX SYSTEM (MEDICARE LEVY SURCHARGE—FRINGE BENEFITS) AMENDMENT (EXCESS LEVELS FOR PRIVATE HEALTH INSURANCE POLICES) BILL 2018

The A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018 is part of a package of three bills, each containing necessary amendments relevant to implementing reforms relating to increased maximum excess levels for private hospital cover.

The other two bills are the Private Health Insurance Legislation Amendment Bill 2018 and the Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018.

Changing excess amounts to allow increased excesses of $750 for singles and $1,500 for couples and families will mean insurers can offer lower premium prices, improving affordability for consumers. This will be the first time excesses have been increased since 2001.

The Government has also decided to remove grandfathering provisions that provided the Medicare Levy Surcharge exemptions for certain policies that pre-date the commencement of the Private Health Insurance Act 2007. This means that, consistent with existing Government policy, individuals will need to hold an appropriate complying health insurance product in order to access the Medicare Levy Surcharge exemption.

As the removal of the grandfathering arrangements may have a flow on effect where some individuals become liable to pay the Medicare Levy Surcharge, the schedules effecting tax must be presented as separate Bills.

This Bill deals solely with taxation-related aspects of this reform and amends the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999.

These changes ensure that individuals purchasing appropriate complying health insurance products for private hospital cover with increased excess levels will be able to claim the Medicare Levy Surcharge exemption.

MEDICARE LEVY AMENDMENT (EXCESS LEVELS FOR PRIVATE HEALTH INSURANCE POLICIES) BILL 2018

The Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018 is part of a package of three bills, each containing necessary amendments relevant to implementing reforms relating to increased maximum excess levels for private hospital cover.

The other two bills are the Private Health Insurance Legislation Amendment Bill 2018 and the A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018.

Changing excess amounts to allow increased excesses of $750 for singles and $1,500 for couples and families will mean insurers can offer lower premium prices, improving affordability for consumers. This will be the first time excesses have been increased since 2001.

The Government has also decided to remove grandfathering provisions that provided the Medicare Levy Surcharge exemptions for certain policies that pre-date the commencement of the Private Health Insurance Act 2007. This means that, consistent with existing Government policy, individuals will need to hold an appropriate complying health insurance product in order to access the Medicare Levy Surcharge exemption.

As the removal of the grandfathering arrangements may have a flow on effect where some individuals become liable to pay the Medicare Levy Surcharge, the schedules effecting tax must be presented as separate Bills.

This Bill deals solely with taxation-related aspects of this reform and amends the Medicare Levy Act 1986.

Changes will mean that the application of the Medicare Levy Act 1986, insofar as it relates to Medicare Levy Surcharge exemption for private health insurance will be consistent with the updated Medicare Levy Surcharge exemption requirements that allow for higher excesses.

Debate adjourned.