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Tuesday, 8 May 1984
Page: 1746

Senator CROWLEY —Has the Minister representing the Minister for Health seen reports describing the establishment of cut price health insurance schemes? Is it the case that these schemes are aimed at the young and the healthy and that, as a consequence, they could force up contribution rates for pensioners covered by private health funds? What action will the Government take to prevent the growth of these schemes and the escalation of contribution rates to the reputable private health funds?

Senator GRIMES —I have noted, and the Government has been concerned about, the impact of cut-rate health insurance being offered by commercial insurers on community-rated health insurance. As cut price insurance is aimed at the young, the fit and the healthy, any widespread creaming off of good risks in that way will lead inevitably to contribution rates of registered insurers being forced to a level where they could become too expensive for many who seek the coverage offered. We believe, as I remember members of the Opposition used to believe at one stage, in the community rating principle in this area. If that is disturbed and distorted in the way that it could be by providing specific health insurance for only the very fit, we will be in some difficulty.

The Government will not allow this discriminatory cut-price insurance to force up contribution rates, particularly for the aged, the sick and the frail. My colleague, Dr Blewett, is at present monitoring the activities of these commercial insurers. We will legislate to control the practice of cut price insurance if it upsets the community rating principle, as it obviously could.