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Monday, 10 April 2000
Page: 15613

Mr IAN MACFARLANE (8:48 PM) —May I assure the previous speaker, the member for Canberra, that the Health Legislation Amendment (Gap Cover Schemes) Bill 2000 will be equitable and fair. The coalition government have a very proud record of encouraging people to take out private health insurance. The flow-on benefits of that—not only to the persons who are insured but also to the whole nation, as private health insurance contributes some $3 billion a year to the cost of health care in Australia—are easily seen. It is perhaps unnerving to see members from the opposite benches supporting this legislation, but I guess anyone can learn the error of their ways. Under Labor, we saw a disastrous fall in the number of people who were insured. It has taken this coalition government to start to turn that trend around.

Health insurance is of particular importance in my electorate of Groom. Groom, whose centre is Toowoomba, is of course very ably blessed by a large number of private health beds. In fact, private health beds in Toowoomba and the surrounding areas actually outnumber public health provided beds. We have two wonderful hospitals, St Andrew's with 129 private beds and St Vincent's with 206 private beds. As well as that, we have two very small but very well-run private hospitals in Pittsworth and Clifton, providing a further 30 beds for a total of 365 private beds in an electorate of about 130,000 people.

Of course, Groom services far more than just its immediate area. People from Northern New South Wales, Western Queensland, Northern Queensland and even the Northern Territory travel to Toowoomba to receive the excellent care which is provided there. Having all these private beds take the pressure off the public system, which has a little over 200 beds in that region. The private hospital system in Toowoomba also has much to be proud of. It leads regional Australia and certainly regional Queensland in a number of areas, and it has the well-earned reputation of delivering professional health care with plenty of compassion. Of course, the private health system is reliant on private health insurance. The aim of this bill is to enhance the attractiveness of private health cover, and therefore to ease the burden on patients when they admit themselves to private health establishments, and to underpin the private health system that many Australians have grown to rely on.

Under the proposed legislation, funds can provide known-gap or no-gap health insurance. As the previous speaker said, it is well and truly needed in the health system. It is an issue which my office has had raised with it by constituents. If they take out health insurance and are unfortunate enough to have an illness or require an operation, they need to know that their health insurance will pick up the entire account.

This legislation will also provide better value for members of health insurance funds, particularly those on tight budgets. Consumers are safeguarded under this legislation through the minister having to approve each scheme as it is presented. It will give the consumers of health insurance a great deal of comfort to know we have a minister of the capabilities of Michael Wooldridge and a government so heavily committed to not only private health insurance but also health in general. When the health funds do come to us, we will not only provide great encouragement to them to provide a no-gap system but also ensure that those policies will stand up to the rigours of time and the various pressures that are put on any health insurance scheme as it meets the needs of its members.

One of the areas of this bill the medical fraternity applauds is the fact that no-gap insurance in most cases, if not all cases, avoids the need for contracts. Whilst this government have no particular aversion to contracts, we always like to protect the rights and freedoms of individuals, and that extends to the medical profession. In the case of this legislation, to be able to present an opportunity to members of health funds to take out health insurance that avoids the need for contracts is a plus. Schemes will be individually tailored, and the legislation offers the health funds the opportunity to be far more flexible in their approach. As is the case with most things in this day and age, consumers' demands in health insurance need to be met.

We have arrived at this legislation after quite extensive consultation. Through the federal Minister for Health and Aged Care, the federal government has over time shown that it is prepared to listen, prepared to sit and work the issues through and prepared to make amendments and adjustments where necessary. This bill is no exception. I heard the member for Canberra seek an assurance that the bill would not see an inflationary effect on health costs. Can I assure the member that one of our clear goals in framing the legislation was to ensure that it was not inflationary. We are confident we have achieved that.

Under this proposal, doctors must warn patients of costs. One of the advantages of known gap in particular—and also of no gap—is that the doctor must explain to the patient why such a gap will exist. This is obviously an advantage for the patient, but there is a secondary and probably more important advantage. Where overcharging may occur—rare though we would hope that would be—the legislation provides the opportunity for that overcharging to be exposed. Therefore, a would-be patient is given the added assurance of knowing exactly what sort of expenses are about to be levied and that the charges the doctor is going to present to them are within the agreed schedule. This will be a less stressful experience for people who are suffering illness or injury or preparing for surgery to rectify some existing ailment. Too often nowadays patients load themselves with all the concerns that they face in not only the medical and physical implications of their oncoming operation but also how they are ever going to afford to pay the bill. The legislation will offer a great deal of comfort and surety in that area and will only further improve the understanding of health insurance.

Not requiring contracts does allow for the professional freedom of the doctors involved, and that is important. Under any system, particularly the private health system, we need to ensure that freedom is maintained. I see the strength of this legislation, though, being another brick in the wall of rebuilding private health insurance in Australia. Under the previous Labor government, the rate of participation in private health insurance fell from 62 per cent in 1983 to 30 per cent in the early years of our current term. We have started to reverse that trend. I have here a graph from the private health insurance organisations which shows that were it not for the incentives provided by the federal government—were it not for the many planks that we have laid down to support not only private health but also private health insurance—a further million people would not have been insured. That is the net effect of all we have been doing to date with incentives for private health.

Let me just remind those who want to argue the finer points of whether the government should support private health insurance of one clear, unassailable fact: private health insurance pays $3 billion a year towards the cost of health expenses in Australia. That is $3 billion that the individuals who choose to take out private health insurance have agreed they will pay and that the government is excused from paying. By excusing the government from paying that $3 billion, we are giving the government the option of ensuring both that our budgets are balanced at the end of the year and, more importantly, that money is freed up to put into the public health sector to ensure that those people who are unable or unwilling to take out health insurance can also receive an adequate measure of care.

The government has worked very hard in the past to introduce planks to health insurance to make it more user friendly and more enticing for people to join. Lifetime cover, which rewards loyalty and will in the long run provide cheaper health insurance and greater stability to the funds, is another plank in its strategy. I think it only fair that those people, such as me and I hope many in this chamber, who have been subscribing to health funds since their early 20s—that may not be as long ago for some as for others—or those people who have been subscribing to health funds all their life, are not faced with premium rises when health funds get loaded down by people who opt in and opt out whether it is because they are young and are expecting a child in their family, because they have got some foreseeable medical exercise that has to be carried out or they are just simply getting old and decide to take on health insurance in the latter part of their lives when they are a higher risk. I think it is only fair that those people who have been insured for 20, 30 or 40 years are not faced with premium rises in health insurance because of that. Lifetime cover comes in on 1 July. It is a way of rewarding the loyalty of those people who have made the decision to join health insurance funds and to stay in health insurance funds. It rewards them by guaranteeing them a starting point in their premium. Those people who choose to join later, particularly in their older years, will pay a penalty. Again that will encourage more people to join the health funds.

Probably the most significant thing this government has done, and certainly the thing that I hear the most praise for this government on, is the 30 per cent rebate. The 30 per cent rebate on health insurance is a very significant financial incentive for people to join private health insurance. It equates to more than total tax deductibility for 80 per cent of our taxpayers who are in what we term the battlers group. For them the 30 per cent rebate is even better than total tax deductibility for their health insurance. You do not have to be Einstein to work that out. Many of our constituents are paying less than 30 cents in the dollar in tax and when the new tax system starts on 1 July we will see 80 per cent of Australians paying less than 30 cents in the dollar. That means the people in that bracket who take out private health insurance will be better off with a 30 per cent rebate than with total tax deductibility for health insurance. So again it is an added incentive.

As I have spoken, the third plank in our strategy on private health insurance is the known-gap or no-gap legislation. I spoke earlier about the importance of health insurance in my electorate, but let me revisit that area. If we look at the figures—and of course these figures are only going to improve from here—in my electorate some 45,000 people were covered by health insurance in 1998. I well remember asking the Prime Minister a question about the importance of health insurance, particularly in my electorate, when I first came into this House. With 45,000 people in an electorate of over 100,000 people covered, you can see that the people of Groom already rely heavily on private health insurance. They already accept their responsibility by taking care of themselves and by relieving the burden of health costs placed on taxpayers around Australia each year.

For the people of Groom this no-gap insurance is an added incentive. They will welcome it. They will welcome the stability it provides to their health funds. Along with the other planks that we are have put there, they will welcome the confidence that is being restored in private health insurance and private health in Australia. This government continues to send a steady unambiguous message to all Australians that not only do we support good health services in Australia but just as importantly we support people who want to support themselves in funding their own health costs. I think that is important. Whilst we acknowledge that there are always those in our community who are unable to take out health insurance for financial reasons or whatever, this government must continue to do whatever we can to encourage people to take out private health insurance. When I return to Groom at the end of this week—and I always look forward to going back to Toowoomba, the most beautiful inland city in Australia; dare I say the most beautiful city in Australia—I know the residents there will welcome this latest legislation this government is proposing.