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Tuesday, 16 September 1958
Page: 1240


That the bill be now read a second time.

The .purpose of this bill is .to give effect to the proposal announced by the Treasurer (Sir Arthur Fadden) in his Budget Speech .to provide Commonwealth assistance to enable medical and hospital benefits to be paid to persons who cannot be insured .at normal rates because of age, pre-existing illness or .chronic illness. I am sure that it will assist honorable members to appreciate the value and importance of this measure if I spend some little -time in the first instance in explaining the problem which -'this :>bill is intended \6 meet.

The development of scientific medicine, which has taken -place within -recent 'years, has made 'the provision of medical Services not only a very complex, :but also anextremely 'expensive process. It demands long raining -of' practitioners, great' hospital construction and maintenance, an extensive system of -'laboratories "and of X-ray facilities 'for-diagnosis-and treatment, and a great apparatus of research, -not only 'for the use of clinical medicine, tut also for the production o'f the costly drugs ''which' 'it uses, and the investigation of the sciences on which 'it is based. The result has been, riot only a 'great 'improvement in medical efficiency, "but also "a great and inevitable rise in cost. In consequence, no modern state is without some type of national health service designed to ensure the availability of modern medical resources and benefits to its -citizens.

It is important .to realize, iri this connexion, .that there is .no. " best " national health scheme which can be applied universally, but that what each country requires is one. suited to its own particular circumstances :and its own national character.. It, is, of .course, possible to learn. from the experiences of others, but .an attempt to transpose the national health scheme of one country 'to another will -be just as fruitless as an attempt to transpose, without change, the system pf government, from one country to another^ ignoring the ..differences of character and circumstances which exist.

In (Australia. , we,nav.e adopted a system of government-assisted voluntary health insurance, which, .1 believe, -is particularly suited to our conditions, which are those of a growing and expanding nation making immense .demands .on its resources, both financial and .physical, .as it does so - a system, moreover, which is suited to the enterprising individuality of our national character. . ยป ..

Medical and" hospital insurance is necessarily -conducted, not only in Australia, but also "in other parts of the world, on an actuarial basis. This means that insurance funds insure their members only against what may be termed normal risks. No medical or insurance fund could survive for long if its business was conducted on any other footing. The premium for the .normal risk df hospital or medical attention can be determined with reasonable accuracy and is " Within the means of most people in the community. There are, "however, a number of risks -associated with health 'for which' a normal weekly payment cannot provide. The older -members of -the - community are specially subject to ' these .extra risks, -which take the .form of -chronic ' 'and -long-term illnesses and ailments in existence prior to the -date, of joining -an insurance fund.

For the individual, these .risks are extremely serious, an'd 'h is. generally agreed that a fully-developed national scheme ought to provide adequately for them. The special problem that exists is that health insurance organizations cannot give ,an insurance cover for abnormally long "illnesses, or for ailments which a member contracted before he joined the fund. If they were to attempt to do so, the premiums they charge to their normal risk contributors would -have to be increased to an unreasonably high level. However, it is recognized by the insurance' organizations,' by the Government and, I 'believe, by all responsible ^people, that benefits ought 'to -be paid in these cases. The Government's task has been to find a mechanism which would enable benefits to be paid .whilst at the same time preserving the principles of the voluntary scheme, which has been such an outstanding success.

The solution which the Government proposes for this problem is contained in this bill. Briefly, the bill provides that medical and hospital insurance organizations will be invited to establish special accounts for the payment of benefits to the aged, to persons with pre-existing ailments and to the chronically ill. These accounts will .be operated and maintained by the organizations themselves, but they will be guaranteed by the Commonwealth. Upon establishment of a special account an organization will credit to the special account the contributions of all members who attain the age of 65 years. These members will become entitled to benefits 'from the special account, regardless of the nature of the illness, the length of the illness or whether it was a condition from which they were suffering at the time they joined the fund. I need hardly emphasize what a tremendous boon this will be to members.

As a general rule, the .organizations will retain, in -their ordinary accounts, the contributions of .persons who are under the age of 65 years, and these persons will continue to receive benefits from -the organizations' ordinary account as they have always done. However, when a claim is made on a .hospital or medical fund, .and the claim is disallowed ,under the .ordinary rules of the fund relating to pre-existing .ailments, chronic .illness or maximum benefits payable within a year, the organization will then transfer the contributor to the special Commonwealth-guaranteed account.

Mr Thompson - Irrespective of age?

Dr DONALD CAMERON (OXLEY, QUEENSLAND) - This refers to persons transferred from the ordinary account, but those of 65 years and over will be transferred in any case to the special account. I am now dealing with persons .under .65 -who would normally be debarred by the rules of the particular organization. The organization will transfer such a contributor to the special Commonwealthguaranteed account. When this transfer has been made the claim in question, and future claims from that contributor, will be paid from the special account. Thus, contributors to medical and hospital insurance organizations will become -entitled to payment of 'benefits, regardless of the nature of the illness, the length of the illness, or whether the medical condition was one which the contributor had at -the time of joining the fund.

That, in broad terms, is the solution to this long-standing and difficult problem which the Government proposes in this bill. Its implementation will be in the hands of the medical and hospital insurance funds who are already providing a first-class health service to more than 6,000,000 insured persons and -their dependants throughout Australia. For some time I, and a number of my .-senior officers, have been engaged in conducting detailed negotiations with -the hospital and medical insurance funds about the implementation of this plan. The 'funds are in complete agreement with the principles of our proposals. The funds are no less anxious than the Government to arrange for the aged arid chronically ill people in the community to be paid adequate benefits, and they may be relied on to co-operate with my department in the work , of introducing this plan so that it operates smoothly, economically and in a manner that will give no cause for complaints from contributors.

As to the details of this bill, I think it will suffice here if I explain in general terms what the detailed provisions are, and later, in the committee stage, I will provide any further information that honorable members may desire.

Clause 15 of the bill provides that a registered organization .may establish a special account. The organization will be required to .pay into that account the contributions .of all contributors who are <65 years of agenor over. Thereafter these contributors will receive their benefits from the special .account. .As .regards contributors under .65 years .of age, the organization will continue to .follow its present practice until it receives a claim which could be. excluded from .benefit .by its rules relating to chronic illness, pre-existing ailments or .maximum benefits. 'Upon .receipt of such a claim . the organization will have an option. It may forgo .its right to disallow the claim, -and pay the contributor his benefit. On the other hand, it may elect to transfer the contributor to the special account, in which case the claim will be paid from that account.

This means that whichever course the organization takes, the benefit will be paid to the contributor.

The contributor himself will not have to do anything different from what he already does now. He will not have to apply for transfer to the special account, nor will he have to take any action to secure entitlement to the new benefits provided for by this bill. All his new entitlements will be provided for him by his organization under the arrangement made with the Government.

The rate of contributions payable to an organization will not be changed by the operation of this bill. A contributor who is put into the special account will continue to pay the same rate of contribution that is payable by an ordinary contributor. In short, his entitlement to benefits will be substantially increased, but his rate of contribution will not be changed.

The benefits to be paid to persons whose claims are within the scope of pre-existing ailment, chronic illness or maximum benefit rules will be standard rate benefits. In the case of hospital- fund benefit, standard rate benefit is defined in this bill to be the rate of 16s. a day. In view of the fact that Commonwealth benefits of 20s. a day are payable under existing legislation, payment of the new standard rate benefit will result in the payment by the organization to the contributor of total benefits equal to the normal public ward charge of 36s. a day. In the case of medical fund benefit, the standard rate will be equal to the amount specified in the schedules to the National Health Act. Under existing legislation, contributors receive Commonwealth benefits of amounts specified in the schedules, and the new proposals will thus result in payment of double the amounts in the schedules in all cases.

The other provisions in the bill may be described as machinery provisions, which are substantially in line with existing medical and hospital insurance fund practice. The objective of these provisions is to provide that, so far as practicable, a special account contributor will be on exactly the same footing in his organization as if he were an ordinary contributor.

It will be necessary to require some measure of uniformity as between special accounts regarding certain minor matters where the organizations themselves have not a uniform practice. For example, special account contributors will not be permitted to show a " profit " on their claims over and above the amount of the hospital charge. I think all will agree that this is reasonable, remembering that deficits on the special accounts will be met by the Commonwealth. In other words, the contributor cannot show a profit at the expense of his fellow taxpayers.

The new benefits provided for by this bill will not be payable for accommodation provided at a benevolent home, convalescent home, home for aged persons, rest home or similar institution. The benefits provided under existing legislation are in most cases adequate to meet the cost of treatment provided at these homes. Existing benefits will, of course, be continued. That is to say, these benefits are not to be regarded as fees for board and lodging in special institutions. They are hospital benefits.

There will be a minimum waiting period of eight weeks from the time a new contributor joins an organization during which benefits will not be payable for hospital treatment or medical services, except in exceptional cases such as injuries resulting from accidents. This is a new condition in relation to Commonwealth medical benefits, but it is in line with the existing legislation in regard to Commonwealth additional hospital benefits, and it also conforms with the practice of insurance organizations in regard to payment of fund benefits. It would obviously be quite out of keeping with the insurance principle if people were permitted to collect benefits immediately, if they had neglected to insure until the actual onset of an illness. Along with the other provisions of the special account plan, this condition will come into effect on 1st January next. It will not affect any contributor who insures before that date.

The benefits payable under the insurance plan provided for in the act are intended to assist individual persons to pay their hospital and medical accounts if they themselves have paid contributions to an insurance fund or if contributions have been paid on their behalf to an insurance fund by their employers. The benefits are not intended to be available to State government institutions, except insofar as bona fide charges made by the institution to its patients are wholly or partly met from benefits payable as a result of bona fide insurance membership undertaken by the individual patients of the institution. Clause 6 of the bill is designed to put this intention into effect. Any person already insured will continue to be regarded as a contributor.

The plan generally will apply to hospital treatment or medical services rendered after 1st January next. The plan has been arrived at after a most intensive study of all aspects of the problem. It is a good plan, and it provides generous new benefits to a large number of people who need them.

The Australian National Health Service, Mr. Speaker, is a fine example of cooperation between different elements of the community; between the Government, benefit organizations which operate on a voluntary basis, and include the great friendly societies, which have played such a prominent part in our national life for so many years, the pharmaceutical profession, the medical profession and individual members of the community. It is a social service of the best type in that, by this partnership, it assists individuals to help themselves. It recognizes that all have a responsibility in the State, individuals as well as Government, and affords them opportunities to discharge this responsibility. Moreover, it preserves, better than any other system, the independence of the individual requiring medical attention and of the profession which provides it, both priceless national assets.

These amendments will provide a great advance in social service legislation by assisting those who, by reason of certain disabilities, are at a disadvantage in securing the full benefits of the scheme and they are, I believe, a very notable addition to the extremely fine record of this Government in the provision of social services in our country.

Mr ALLAN FRASER (EDEN-MONARO, NEW SOUTH WALES) - What is the estimated total cost to the Commonwealth per year?

Dr DONALD CAMERON (OXLEY, QUEENSLAND) - The estimated total cost is not an exact figure. It will depend largely on the numbers.

Mr ALLAN FRASER (EDEN-MONARO, NEW SOUTH WALES) - Will the contribution of the special fund contributors be paid into the special fund?


Debate (on motion by Mr. Allan Fraser) adjourned.

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