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Thursday, 19 June 2003
Page: 17019

Mr HUNT (12:23 PM) —I rise with great pleasure to speak in support of the National Health Amendment (Private Health Insurance Levies) Bill 2003. In addressing this bill, I want to speak about two things initially. I want to address the context of health insurance within Australia, and I want to address the consequences for the average Australian family of the position outlined by the member for Jagajaga today. We are in a situation where, as a country, we have achieved enormous things on the health care front. The average life span and the quality of life of people have both improved dramatically. The consequence of that is twofold: an improvement in quality of life and life span, and also an increase in the costs which flow on for our health care system. It is the price of our success. But the question is: how do we deal with that?

This government has made a clear, absolute and unequivocal commitment to adopting the most efficient system for a country which has great demands on its resources. The most efficient system will deliver the most health care benefits to average Australian families. In doing that, we have clearly and without doubt embraced a system which encourages private health insurance. The reason why we encourage private health insurance is that every dollar spent on private health insurance is a net saving to the general health system, which means there is more money available. That is why the government introduced the private health insurance rebate—the 30 per cent which goes to Australian families. But what we saw today from the member for Jagajaga, three days into her role as the acting health spokesperson for the opposition—and I respect the integrity of her views; I respect the integrity of the person—was a fundamental shift.

The member for Jagajaga outlined her clear desire and the clear desire of the Leader of the Opposition to add $750 per annum to the health care costs of the average Australian family which is in some way involved with private health insurance. She gave a speech about increasing health care costs, yet if the private health insurance rebate were to be abolished it would add $750 to the annual health bill of an average family in Australia. That is the meaning of what was said in coded language today. That is the underlying purpose: the traducement, the running-down, the criticism and the general denigration of the private health insurance rebate. The intention is clear, the aspiration is absolute and the desire is unchecked. What we see is a clear, absolute intention, explained today by the new, three-day-old shadow spokesperson for health, to set out a plan to abolish the private health insurance rebate. It is clear, it is absolute—that is where Labor are heading. Unless they categorically deny that that is their plan, then there can be no doubt that the opposition are directly bent on taking forward a position, from an ideological background, which would lead to a $750 per year increase for the average Australian family. So the crocodile tears we see in relation to the increase in health care costs hide the fact that what they are proposing is a manifest increase. If you abolish the private health insurance rebate then there will be a 50 per cent addition to the costs for an average family.

In addressing these questions, I want to deal with three things: the background to the bill; the importance of the bill; and some of the specific provisions of the National Health Amendment (Private Health Insurance Levies) Bill 2003. This bill is about private health insurance levy reform. It continues the Commonwealth's commitment to wider private health insurance reform. It is the continuation of a long trend of activities, including incentives for families and rightly, without shame, penalties for high-income earners who do not take responsibility for their own health care. What we have seen is that private health insurance coverage has increased throughout Australia, which has increased the benefits for the Australian health system as a whole. This is because private health insurance reduces pressures on the public health system.

Over the last two years, we have seen the percentage of private patients, in either public or private hospitals, grow to over 35½ per cent. This represents an increase of about eight per cent in the admission of private patients over public patients, whereas the number of public patients has remained constant. There can be no more tangible demonstration than that of the practical effects of increasing the number of people who are engaged in the private health system. The reason why it works is that it takes pressure off the existing public health system—a system with natural pressures. Because we are achieving greater success in our health care system, we are living longer. There are more ailments for those who are elderly. The population is ageing, and the percentage of ailments of those who are over the age of 65 is higher than the percentage of ailments of those under 65. So against that background, if you are able to maintain at a constant level the number of admissions under the public health system but increase those admissions under the private health system, the average dollar of public money available to public patients who have the most need increases. If you took all of those private patients out of that system, it would be a catastrophe.

Private health insurance reform has resulted in three main benefits for Australia: firstly, an increased number of people who have private health insurance; secondly, increased affordability because of the 30 per cent rebate; and, thirdly, improved quality. What has that meant in practice? Let us look at the first of these three areas: increased membership. Private health insurance coverage has risen dramatically over the last seven years, from a low in 1996 that approached 30 per cent to approximately 43.8 per cent of people at present. That is a dramatic change. If you take a significant proportion of Australians out of the public health system and put them into the private health system by providing some incentive for them to do that, it leads to a net saving on general health costs, which is a tremendous benefit.

Approximately 8.7 million Australians are now covered by private health insurance. This represents an increase of around three million people since early 1998. The increased private health insurance membership rates are thanks to three particular reforms: firstly, the federal government's 30 per cent rebate; secondly, lifetime health cover schemes; and, thirdly, the health insurance levy for high-income earners. That is a tough measure, and we make no apologies for that, because those who are best resourced in society should take some responsibility for helping to provide their own health cover. It is a classic distributional argument of ensuring that those with the greatest needs are provided for and that those with the greatest ability help to provide for them. It is a tremendous example of cross-subsidisation within Australia.

The second great benefit to come from the private health insurance reforms has been affordability. The 30 per cent rebate has directly increased affordability, and today we have seen a fundamental threat to that affordability. The third benefit is quality, which is not as well known. One major area of improvement has been to reduce what is known as the gap for hospital coverage. The gap is a person's out-of-pocket expenses, which are created by the gap between doctors' charges and government rebates. No-gap health insurance has been created to cover the full costs of medical services. `No gap' cover and `known gap' cover, which ensures that there is a capped difference between what is paid and what has to be paid out, have both increased dramatically. Previously they represented one per cent of insured hospital services, but in 2003 that rate is now over 50 per cent. This is a tremendous increase that provides certainty and security for those with private health insurance.

Where does this bill fit into that broad philosophical approach of being practical, humane and tangible? The bill directly delivers one main benefit: it ensures that private health insurance legislation is fully in accord with section 55 of the Constitution. The bill is designed to amend existing legislation to ensure it unquestionably meets the requirements of the Constitution. The bill takes into account the findings of the Australian National Audit Office's report into these activities. The bill makes changes necessary to reimpose the four private health insurance industry levies. It ensures that it is utterly in synchronisation with section 55 of the Constitution. The four key levies are: the Private Health Insurance Administration Council levy, the collapsed organisation levy, the Acute Care Advisory Committee review levy and the Reinsurance Trust Fund levy. All of these will be placed on a surer footing.

Lastly, I will make brief reference to the provisions of the bill. In particular, I will make reference to item 15 of the bill, which makes it a condition of registration of health benefits organisations that the organisation must pay any Reinsurance Trust Fund levy. The fund supports community rating, helps to protect health funds and helps to protect high-cost contributors.

Ultimately, this bill is part of the government's broad approach to preserving, protecting and extending private health insurance. The reason why private health insurance matters is that the more people take up private health insurance, the more resources are available for health generally within Australia. In practice, that means that low-income earners and people with inadequate resources will be able to be treated in hospital as quickly and as fully as possible. If you took away the private health insurance rebate, which is what was effectively proposed today by the member for Jagajaga, you would see a crash in the number of people taking out private health insurance and a dramatic increase in the pressure on our public health system. It is not some broad notion of rampant philosophy; it is a simple matter of practice.

If you protect and encourage private health insurance and provide incentives for people to take it up, they will do so. If they do, there will be more resources available for the general care and protection of health within the Australian hospital system. The people who are most vulnerable and most in need—the low paid and those who are unable to take out their own private health insurance—will be best catered for. This is a humane, important and absolutely necessary pillar of our health system. Three days into the job, what we see from the member for Jagajaga is a barely veiled declaration that the Labor Party, the alternative government of Australia, intends to abolish the private health insurance rebate if they come to office. I endorse the bill, and I condemn that proposal. I urge this House to fully support the private health insurance levies bill.