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Thursday, 1 September 1994
Page: 800

Senator CHAPMAN —I direct my question to the Minister representing the Minister for Human Services and Health. The health minister said yesterday that her health package would eliminate the disincentive out-of-pocket expenses caused to private health fund membership. Is the report in the Australian Financial Review today correct when it says that this offer of total cover is the same as gap cover?

Senator CROWLEY —No, it is not. I have already answered this, but I am certainly happy to tell Senator Chapman again. The gap insurance that the AMA argues for and that doctors have argued for in the past was an open-ended gap—above the 25 per cent that is currently provided to the top of the medical benefits schedule. This package says that, provided the doctors agree with the private health funds that there be no further out-of-pocket expenses, then the insurance companies, provided they can get a good price for consumers, will be allowed to cover a patient for 100 per cent—an entirely different understanding of gap. It is about pegging the prices down, not pushing the prices up. People do need to know; certainly the consumers need to know. And I hope that Senator Chapman would not want to misrepresent the facts of these changes to the electors anywhere, let alone in South Australia.

  This is different because it is a package of reforms. It allows the private health insurance industry to negotiate with doctors so as to put, if you like, a cap on the price. The doctors have agreed not to charge above that, or there will not be 100 per cent cover. We know what the community wants. People in the community want private health insurance that protects them from bills. What they have got at the moment is private health that is costing them more and more for premiums and giving them only bigger and bigger bills. If the private health insurance industry seizes this opportunity and protects against gap cover, it will be very different from the sort that pushes up fees. It will be the kind of gap cover that pegs fees.

Senator CHAPMAN —Mr President, I ask a supplementary question. The minister really is playing with words in trying to draw a distinction between various types of gap insurance. I therefore ask the minister: how does the government reconcile this new package with its long opposition to all forms of gap insurance?

Senator CROWLEY —Trying to explain this to Senator Chapman will be difficult. I will have another shot. What the government is saying is that if private health insurers can get an agreement with doctors to set a limit on their fees so that the private health insurers can set a premium that will be reducing and an attractive product in the market, then 100 per cent cover, including whatever gap there might be, will be acceptable. The government is not saying that cannot happen any more. It is saying to private insurance companies, `If you can negotiate a package that is competitive in the marketplace and pegged so that the consumer does not have to pay more, then that is allowed—go for it.' But that is entirely different from the gap that the government has opposed in the past that was open-ended and that was only going to be an inducement to push fees up. If Senator Chapman does not understand it, he should keep reading.

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