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Thursday, 9 December 1971
Page: 4545

Mr Whitlam asked the Minister representing the Minister for Health, upon notice:

(1)   What have been the aggregate reserves of the medical benefits organisations in 1970-71.

(2)   What percentage of contributions did the increase in reserves represent.

Dr Forbes - The Minister for Health has provided the following answer to the honourable member's question:

(1)   The aggregate reserves of the medical benefits organisations as at 30th June 1971 totalled $32,397,043.

(2)   The aggregate reserves decreased, rather than increased, during 1970-71. The amount by which they decreased during 1970-71 was equivalent to 1.5 per cent of the total amount of contributions received by medical benefits organisations during that year. (Note: The above figures are subject to confirmation).

The above figures relate to 'free' reserves, i.e., they exclude amounts set aside in respect of unpresented claims and contributions paid in advance.

The Government has adopted a policy under which larger organisations' 'free' reserves will generally be limited to the equivalent of three months' contribution income. In the case of smaller organisations, more flexibility is being allowed and their 'free' reserves may be permitted to exceed that level in appropriate circumstances.

This policy was implemented for medical benefits organisations in conjunction with the introduction of the Health Benefits Plan on I July, 1970. The contribution rates set at that time were designed to reduce or, if necessary, increase each organisation's 'free' reserve level to an amount equivalent to three months' contribution income in the case of the larger organisations and equivalent to six months' contribution income in the case of the smaller organisations. These reductions or increases are expected to occur gradually.

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