Bills Digest no. 81 2006–07
Private Health Insurance Bill
2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Financial implications
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Private Health
Insurance Bill 2006
Date introduced:
7 December 2006
House: House of Representatives
Portfolio: Health and Ageing
Commencement:
1 April 2007
This Bill replaces the
current regulatory regime for private health insurance (contained
mainly in the National Health Act 1953, Health
Insurance Act 1973 and Private Health Incentives Act
1998) with a new regime contained within the one Act.
Changes proposed as part of the new regulatory
regime include:
- broadening the range of services that can be covered by private
health insurance to include out of hospital services that
substitute for or prevent hospital care
- removal of Lifetime Health Cover loadings for members with ten
years continuous membership
- requirements on insurers to provide standard information
statements for consumers about their private health insurance
products, and
- clarified and simplified legislation.
This Bill was introduced with six other Bills
that amend a range of Acts to reflect the new regulatory regime.
These six Bills are examined in separate Bills Digests.
The private health insurance sector in
Australia comprises 37 operational funds. The industry is dominated
by the six largest health insurers, which share 76.2 per cent of
the market.(2) Twenty-five health insurers each have
less than 1.0 per cent of market share and, when combined, comprise
7.8 per cent of the market.(3)
The private health insurance industry is
subject to tight regulation, primarily through the National Health
Act. The main industry regulator is the Private Health Insurance
Administration Council (PHIAC). A central pillar of the regulation
of private health insurance in Australia is community rating the
principle that health funds may not discriminate on the basis of
age (other than age at which health cover is first purchased),
gender, sexuality, health status or claims history. Rather, they
must charge the same premium to everyone, regardless of individual
health risk.
Ratings agency Standard and Poor s regards the
private health insurance environment in Australia as competitive
and highly volatile.(4) According to PHIAC, the industry
s financial performance remained strong in 2005 06, recording a
surplus of $984 million.(5) PHIAC suggests that this
result was a combination of lower-than-expected claims outlays, and
the buoyant economy, which has contributed significantly to
investment income .(6) Nevertheless, PHIAC has raised
concerns that the industry continues to be heavily reliant on
non-premium sources of revenue for its surplus, arguing that the
sustainability of this reliance is open to question because
investment income, though important, cannot be expected to fund the
benefits outlays growth anticipated by the industry
.(7)
Benefits paid by private health insurance
funds grew by 6.2 per cent, continuing the trend of increasing by
more than the consumer price index (CPI) (although, PHIAC notes,
this does represent a decrease in the rate of increase over recent
years).(8) Significantly, PHIAC has argued that the
continuing growth in health costs can only result in ongoing
pressure on premium rates .(9) Private health insurance
funds were granted permission by the Minister for Health and Ageing
to increase premiums by an average of 5.7 per cent in January 2006,
a decrease from the average increase of more than seven per cent
per year since 2002 (7.9 per cent in 2005). Media reports have
suggested that premium increases will be smaller than normal in
2007 as a result of the increased 2005-06 industry
surplus.(10)
Membership numbers have remained stable since
2003. Hospital coverage at September 2006 was 43.2 per cent, with
8.928 million persons covered, a marginal increase over the
previous year. The average age of the industry s customer base
continues to increase at a rate similar to that of the Australian
population.(11) This is a continuing concern for the
industry given that greater use of hospital services and increased
benefit outlays are associated with persons aged over 65 years. For
example, while comprising only 13.1 per cent of the insured
population, benefits paid to persons aged over 65, amounted to 44
per cent of total benefit outlays.(12)
In recent years, some commentators have
questioned the sustainability of the private health insurance
sector in Australia in its current form. For some, the problem is
that private health insurance does not contain sufficient
mechanisms to control the cost and utilisation of health
services.(13) Others have pointed to the way in which
increased premiums lead to a downward spiral in which low-risk
members leave because they contribute more than they claim, the
proportion of high-risk members increases, premiums rise to make up
the difference between income and benefits paid, in turn causing
low-risk members to leave.(14) Still others have argued
that the current stringent regulatory framework for private health
insurance provides very little opportunity for enhanced
competitiveness through administrative and product
innovation.(15)
This Bill is the largest of a package of seven
Bills that implement reforms to private health insurance announced
by the Government on 26 April 2006. These reforms were developed
following a review of the private health insurance sector in
2005.(16) The Government had identified a number of
problems with private health insurance, including:
- existing regulation inhibited insurers from developing flexible
health care products that better meet consumers needs and
expectations
- forecasts from analysts such as Standard and Poor s, suggesting
that there is currently little scope for growth in the private
health insurance sector
- research indicating that consumers wanted a wider range of
services covered by private health insurance (particularly
preventative health services), and
- the unwieldy, out of date , and difficult to interpret nature
of current private health insurance
legislation.(17)
The purpose of the review was to address concerns
about the participation rate, the value and attractiveness of the
[private health insurance] product and to explore opportunities to
invigorate [private health insurance] .(18)
Reforms developed in response to the review
were announced in April 2006. This was followed by a period of
further consultation with the private health insurance sector and
the release of an exposure draft of the Private Health Insurance
Bill 2006 on 20 October 2006. A number of changes to the Bill were
made following consultation with the sector in relation to the
exposure draft. These are outlined in the Department of Health and
Ageing circular Introduction of Private Health Insurance
Legislation Package (PHI76/06).
The Government has described the package of
reforms as the most significant change to health insurance
legislation in more than a decade .(19) The reforms are
composed of three types of measures:
- those aimed at improving private health insurance as a
product
- those aimed at ensuring consumers are better informed about
private health insurance products, and
- those aimed at reforming the structure of private health
insurance regulation.
Broader Health Cover
The most significant change in this category
is Broader Health Cover. Broader Health Cover expands the range of
services that can be covered by private health insurance to include
out of hospital services that substitute for or prevent hospital
care. This will allow insurers to pay benefits for such services as
domestic nursing assistance, allied health services, dialysis,
chemotherapy and programs that support and sustain healthy
lifestyles.(20) Some out-of-hospital services will be
specifically excluded from Broader Health Cover, including general
practice services and the costs of accommodation in residential
aged care facilities. These are to be specified in the Private
Health Insurance (Health Insurance Business)
Rules.(21)
The Minister for Health and Ageing, Mr Abbott,
describes this as the most significant new measure in the package
and a groundbreaking change .(22) He argues that it will
improve private health insurance by enabling health insurers to
offer more flexible and innovative products that reflect modern
clinical practice and consumer expectations .(23)
Under the new regulations for complying health
insurance products in the Bill, health insurers will offer policies
that cover:
- hospital treatment; or
- hospital treatment and general treatment; or
- general treatment only (but not hospital-substitute treatment
only).
Treatment will be defined in relation to who
provides the service, rather than where the service is
provided.
Hospital treatment is defined in section 121-5
of the Bill as treatment which is intended to manage a disease,
injury or condition, including the provision of goods and services,
provided by or under the management or control of a person who is
authorised by a hospital to provide the treatment. The treatment
must also be provided at a hospital or be provided, or arranged,
with the direct involvement of a hospital.
General treatment is defined in section 121-10
as treatment intended to manage a disease, injury or condition,
including the provision of goods or services, and that is not
hospital treatment. As noted previously, general treatment cannot
include a professional service for which a Medicare benefit is
payable unless allowed by the Rules. General treatment includes,
but is not limited to, hospital-substitute treatment, chronic
disease management programs and ancillary services.
Broader Health Cover products will be those
covered by the second point above ( hospital treatment and general
treatment ).
Lifetime Health Cover change
The other significant change designed to
improve private health insurance as a product is the proposal to
remove of Lifetime Health Cover loadings for members with ten years
continual membership.
Lifetime Health Cover was introduced by the
Howard Government in July 2000 in order to encourage young people
to take out private health insurance whilst still relatively young
(rather than later in life when their use of health services is
generally higher) and maintain that coverage. Under LHC, health
funds are permitted to charge different premiums depending on the
age at which people take up private health insurance.
Broadly, Lifetime Health Cover operates as
follows:
To lock in the lowest premiums for life under
Lifetime Health Cover, a person needs to take out hospital cover
with a registered fund by the 1st of July following their 31st
birthday. If a person does not have hospital cover on the 1st of
July following their 31st birthday and decides to take out hospital
cover later in life, they will pay a 2% loading on top of their
premium for every year they are aged over 30. For example, someone
who first takes out hospital cover at age 40 will pay 20% more than
someone who first took out hospital cover at age 30. The maximum
loading allowed is 70%.(24)
Further, under current LHC arrangements,
health fund members can drop their health insurance cover for a
cumulative period of 24 months within their lifetime without
affecting their loading. These are referred to as permitted days .
For 365 days without cover after that, the person s loading
increases by 2 per cent. In effect, this allows the person 1,094
days or almost 3 years during which they are not penalised for
dropping their health insurance. In addition current arrangements
provide for various exemptions, for example, Australians who were
overseas or resident in another country on their 31st birthday.
Section 34-10 of the Bill removes LHC loadings
for persons who have maintained cover continuously for ten years.
This is intended as a reward for those who have maintained cover,
having first joined after the age of 30. As the Minister argued in
his Second Reading speech, this measure recognises and rewards
people who have made the effort to maintain their cover over time,
having first joined after the age of 30. They have made the effort
and they deserve the credit for their commitment and loyalty
.(25) It is expected that this measure will benefit up
to 60,000 consumers a year.(26)
This refers to the proposal in Division 93 of
the Bill for the introduction of requirements on insurers to
provide standardised information statements for consumers about
their private health insurance products. The purpose of this
measure is to assist consumers in comparing health insurance
products and to understand their entitlements under them.
The standardised information is likely to
cover such things as the cost of premiums, waiting periods,
exclusions, gaps and excesses.(27) These will be
specified in forthcoming PHI (Complying Product) Rules, rather than
the PHIB 2006.
This information will be included in a
consumer information website being developed by the Private Health
Insurance Ombudsman (PHIO). Funding for the website was included in
the 2005-06 federal budget.
Clarified and simplified legislation
This Bill (and the other six bills in the
package) proposes to clarify and simplify legislation relating to
private health insurance.
According to the Explanatory Memorandum:
Currently, the regulatory regime for private
health insurance is expressed in nine primary Acts, nine sets of
regulations, several schedules to Acts and numerous determinations.
Under this option this existing regulation (with the exception of
the taxing provisions) would be consolidated into one primary Act,
which will set out the requirements for the conduct of private
health insurance business, one primary set of regulations and a
systematic, uniform approach to developing and expressing
subordinate legislation.(28)
As such, this Bill recasts the existing regime
into themes including:
- incentives to purchase insurance
- rules for private health insurance products
- obligations on private health insurers, and
- provisions for enforcement of the Bill.
The Bill also co-locates and consolidates
related provisions and removes redundant provisions. The Bill also
contains offence provisions for breaches of the new product
standards. These include penalties for failing to provide the
required standardised product information introduced in this
Bill.
Broadly, the new regulatory regime shifts the
focus of regulation from insurers to insurance
products. This means that private health insurance
products are regulated directly, rather than through conditions of
registration imposed on health insurers. The Government argues that
this measure will reduce the compliance burden on private health
insurers and that this may place downward pressure on the price of
premiums .(29) Mr Abbott has also suggested that by
regulating products, rather than providers, the Government is
opening the door more widely to potential new entrants into the
private health insurance industry . This is not explained but may
refer to the possibility that the current focus of regulation on
insurers acts as a barrier to entry for organisations that may
otherwise have sought to offer health insurance.
Risk equalisation
The Government is also planning to change the
arrangements relating to risk equalisation (currently known as
reinsurance). Note that these changes, due to commence on 1 April
2007, will be made through Regulation, rather than directly through
this Bill.
Under current reinsurance arrangements,
insurers are required to contribute to a reinsurance pool
(administered by PHIAC), which is redistributed to those insurers
who have a disproportionate number of over-65 year olds or
extremely high users of health services. Reinsurance is integral to
the principal of community rating in that it ensures that
organisations are not disadvantaged by being required to charge the
same premium to all members regardless of health risk. $182 million
was transferred amongst RHBOs in 2005 06 through reinsurance
arrangements. (30)
The current approach to reinsurance
arrangements has been the subject of debate in the private health
insurance sector for some years. For example, they have been
criticised by insurers as too administratively complex and
inflexible.(31)
The key features of the new approach, to be
known as risk equalisation, are improved pooling of risk and the
introduction of a compulsory high cost claims pool. This approach
was originally proposed by the Australian Health Insurance
Association (AHIA) and is supported by the industry.
The Government has decided to pursue this
approach rather than its own preferred approach known as
demographic risk-based capitation. In essence, this approach would
differ from current arrangements in that financial transfers
between funds would be on the basis of their membership risk
profiles, rather than as a subsidy for actual benefits paid. The
Government has argued that such an approach would promote
efficiency in the industry:
funds that are more efficient [would be] able to
retain cost-savings. The proposed model rewards funds that are more
efficient and will encourage all funds to have better claims
management, contractual arrangements and/or preventative
programs.(32)
However, the Government has decided to pursue
the AHIA s favoured approach because demographic risk-based
capitation is not supported by the industry. According to the
Explanatory Memorandum, the Government will continue to consult
with the industry about the possibility of implementing demographic
risk-based capitation at some time in the
future.(33)
Position of significant interest groups or
commentators
The following have indicated that they are
broadly in favour of the reforms introduced through this Bill: the
Australian Medical Association (AMA), the Australian Private
Hospitals Association (APHA), the Australian Health Insurance
Association (AHIA), and health insurers MBF and BUPA. Nevertheless,
as can be seen from the following section, each has also raised
concern about specific aspects of the reform package and made
recommendations for change.
The Centre for Health Economics Research and
Evaluation (CHERE), Doctors Reform Society (DRS) and academic
commentator on health financing, Ian McAuley have all raised
significant concerns about the impact of the Bill. Their main
concern is with the impact of the introduction of Broader Health
Cover. Specific concerns are discussed in the following
section.
Analysis of significant features of Bill
The analysis in this section draws from
submissions to the Senate Community Affairs Legislation Committee
Inquiry into Private Health Insurance Bill 2006 and related
Bills and other relevant material.
Copies of the submissions can be obtained from
the Inquiry website at
http://www.aph.gov.au/Senate/committee/clac_ctte/pte_hth_2006/submissions/sublist.htm.
As noted above, under Broader Health Cover
health funds will be allowed to insure for out-of-hospital
care-management programs. One advantage of this approach is that it
will allow health insurers to become further involved in activities
that may prevent illness and alleviate chronic disease among health
fund members. This could also have the effect of reducing costs for
both patients and the health funds (though, as will be discussed
below, some commentators contest this proposition).
Further, Broader Health Cover will enable
private health insurers to develop services more consistent with
patient needs and contemporary clinical practice. According to the
Centre for Health Economics Research and Evaluation (CHERE) in its
submission to the Senate Inquiry into the Bill:
Currently, private hospital insurance can only
cover those services that are performed inside the four walls of a
hospital.(34) As a result, many patients seek
in-hospital treatment in order to use their private health
insurance when safe and suitable out-of-hospital services may exist
at less cost for that particular treatment. The longstanding
demarcation between what constitutes inpatient and outpatient care
has, to some extent, prevented private hospital providers from
introducing modern clinical practice care, for example, enabling a
person with cancer to have chemotherapy in or out of hospital and
still be covered by their private health
insurance.(35)
CHERE describes the Government s intentions in
allowing for private health insurance for non-hospital services as
laudable but suggests that they also carry the risk of some fairly
fundamental (unintended) consequences .(36) Concerns and
criticisms identified by CHERE and others in relation to the
implications of Broader Health Cover are discussed in the remainder
of this section.
Several commentators have raised the concern
that general treatment benefits under Broader Health Cover will
create a two-tier system because (apart from a small number of
examples of hospital substitute treatment) benefits will not be
available to those without private health insurance and hence
reliant on Medicare.
For example, according to Dr John Deeble (one
of the original architects of Medicare), Broader Health Cover may
lead to:
the development of a range of new medical services
that could benefit patients but will not be available to those
reliant on Medicare and this could be primary care stuff like
preventive health checks or what has traditionally been done in
hospital, like chemotherapy or dialysis, but which can now be done
outside hospitals in the community.(37)
Similar concerns have been raised by Professor
John Dwyer, former chairman of the Australian Healthcare Reform
Alliance:
The real concern about extending the benefits to
those with private health insurance is that you extend the
inequality that is already in the system.
Allowing health funds to finance new ambulatory
care is obviously going to be attractive to those rich enough to
afford insurance, but in most cases it will only be attractive if
the same care is not available under Medicare, where the subsidies
are bigger and that is where the problem lies.
In this respect, Broader Health Cover could be
seen as an erosion of the principle of universalism in health care
a longstanding and fundamental principle of the health system.
A spokeswoman for the Minister for Health and
Ageing responded to concerns about Broader Health Cover
establishing a two-tier health system by stating that Medicare
would continue to cover a comprehensive range of benefits , and
that there are already items covered by private health insurance
that are not picked up by Medicare, like optical and dental cover
.(38)
This is correct, though it could be argued that
the establishment of Broader Health Cover represents a significant
expansion in the list of items covered by private health insurance
but not by Medicare. Indeed, this may well be one of the advantages
of Broader Health Cover from the point of view of the Government
and the industry. Broader Health Cover is one way of making private
health insurance more attractive to consumers however, the
attraction would be significantly diminished if the services in
question could be accessed through Medicare.
As such, to some extent, the debate about Broader
Health Cover represents a contest between the imperatives of
universalism in healthcare and the need to ensure the future
sustainability of the sector (by making private health insurance a
more attractive product).
CHERE has also raised concerns that Broader
Health Cover will blur the lines between inpatient and outpatient
care and that this may cause/allow service providers and health
insurers to respond with practices that segregate those with
private insurance from those without.(39)
As noted above,
private health insurance in Australia is regulated according to the
principle of community rating meaning that health funds may not
discriminate on the basis of individual health risk.
The CHERE submission argues that Broader
Health Cover will give health insurers greater flexibility to
design products targeted at specific populations and set different
prices for different products.(40) CHERE suggests that
this would enhance the ability of insurers to engage in reducing
the risk profile of the insured population.(41) This is
known as cream-skimming because it involves attracting
low-risk/low-cost members to a fund through financial or other
incentives not available to high-risk/high-cost members. Such
practices could be regarded as contrary to the principle of
community rating in that they are inconsistent with the principle
that those with higher risk-profiles should not be disadvantaged in
relation to other purchasers of private health insurance.
Some commentators have suggested that the
provisions in relation to Broader Health Cover are too restrictive
and will inhibit insurers from being as innovative in product
design as they might have been in a less regulated environment. For
example:
- health system analyst Paul Gross has described the regulations
surrounding Broader Health Cover as excessive and suggested that
they may limit the full potential of the
proposal,(42)
- AHIA and BUPA have criticised the regulatory framework for
Chronic Disease Management Programs for mandating a
multi-disciplinary approach.(43) AHIA has described the
framework as too prescriptive and suggested that health funds
should be allowed to determine the most appropriate services
required by their members ,(44) and
- APHA argues that the definition of hospital treatment in
subclause 121(5)(1) is unnecessarily restrictive and does not
reflect the fact that private hospitals currently provide services
that prevent hospitalisation and assist patients in managing their
condition.(45) APHA has recommended an amendment to this
clause to include the term prevent (thereby making the definition:
hospital treatment is treatment that is intended to manage or
prevent a disease, injury or condition and )(46)
The AMA has argued that the Bill creates a
number of opportunities for health funds to interfere in
decision-making by healthcare providers. These include:
- a good deal of discretion to the health funds under the General
Treatment heading
- there are no default benefits for general treatment so there is
no certainty to providers of even minimum health insurer support
without explicit health fund approval of arrangements , and
- the health funds will have increased capacity to support one
provider over another based on criteria other than quality of care
and outcomes .(47)
It is also worth noting that the regulatory
framework for Broader Health Cover also specifies that there will
be no default benefits for hospital-in-the-home care. The absence
of default benefits raises the possibility that health insurers
could seek to shift costs to the non-hospital sector. The
Government has responded to these concerns by including clause
172(5), a clause aimed at ensuring the clinical independence of
practitioners. However, the AMA believes that this clause needs to
be strengthened by the addition of more detailed requirements that
refer explicitly to the new types of arrangement facilitated by the
Bill.(48)
APHA has raised concerns about the quality and
safety arrangements for complying products in the Bill. While there
are no details available, it appears that a uniform regime of
quality and safety standards to apply to all privately insured
services will be introduced in (yet to be drafted) Private Health
Insurance (Accreditation) Rules. This regime will not commence
until 1 July 2008. APHA s concerns relate to the absence of
information in the Bill concerning the quality and safety regime
that is to apply for the 15 month period from 1 April 2007 other
than ensuring that a hospital is accredited (proposed subsection
121-5(7)(d)) .
APHA suggest that the absence of suitable
interim arrangements (such as an interim certification requirement)
raises the prospect of services being funded under BHC for 15
months with no commitment to quality improvement and no guarantee
of patient safety . APHA also proposes that the accreditation
arrangements include services in addition to facilities and
practitioners, in recognition of the fact that many Broader Health
Cover services will not necessarily be delivered within a
facility.(49)
In contrast, the AMA has urged caution in
developing the new accreditation arrangements, suggesting that
insisting that every program is accredited could be
bureaucratically cumbersome, very expensive and only marginally
improve the quality of care .(50)
Several commentators have contested the
proposition that Broader Health Cover will enable health insurers
to contain costs through, for example, reducing the demand for
acute hospital care.
For example, the AMA suggests several factors
that it says will lead to increased costs under the new regime:
First, health funds have a very poor record of
containing their own management costs. As they move to cover a wide
range of diverse services, administration costs may rise even more
quickly. Second, notwithstanding the intended limitations on what
they can cover, the private health funds will be targeted for cost
shifting by the public system as a result of the changes. Third,
the Federal Government will find it very difficult to resist the
temptation to put more financial responsibility on the private
funds and therefore, ultimately, fund members.
In summary, these changes are not a panacea for
financial stress facing the private health insurance industry. In
fact, they may raise costs. Real sustainable change requires that
insurers be able to offer fundamentally different products, for
example, medical savings accounts. (51)
From a slightly different angle, academic, Ian
McAuley, argues that extending private health insurance to illness
prevention and health maintenance services under Broader Health
Cover creates an incentive for people to rely on higher-cost,
institutional modes of healthcare:
Whatever guidelines are developed, there will be a
financial incentive for people to use those services which are
covered by insurance, while there will necessarily be equally
effective or better services excluded from insurance. For example,
it appears to be the Government s intention to see insurance cover
supervised exercise r gimes, or dietary consultations, but these
are high cost compared with self-help, such as unsupervised
exercise or, say, internet-based diet research. Far from
encouraging self-reliance, insurance for such services directs
people s choice towards institutional means of attending to their
health needs, with accompanying misallocation of resources. Such
services, because of their discretionary nature, should not be
covered by insurance.(52)
In other words, McAuley suggests that, rather
than reducing the overall cost of healthcare, Broader Health Cover
actually may bring the possibility of higher cost into new areas of
the health system.
As noted above, Division 93 of the Bill
requires health fund insurers to inform consumers on aspects of
their policies. This information will be included in a consumer
information website run by the PHIO. It is proposed that the
website will provide up-to-date comparisons of private health
insurance products and premiums.(53) A commercial online
website that compares health insurance products is already
operating; however it does not include all registered health
funds.(54)
One concern that might be raised relates to
the accessibility of online information. For example, people in
areas poorly served by broadband or internet access may find a
website difficult to access, as might people on low incomes without
computer access, and the elderly or vision impaired who may find
computer-based services difficult to use. Alternative sources of
information could also be considered to ensure as many consumers as
possible will benefit from this measure. For example, Consumers
Health Forum of Australia (CHFA) has suggested that for people
without web access, and for help with the website, an ongoing
independent telephone support service will be needed
.(55) The Government could also consider a brochure
available through Medicare offices as a further option. CHFA has
also suggested that an interrogation function on the website would
be welcomed by consumers.
Lack of certainty about the actual costs of
using private health services has long been a source of concern
among consumers. AHIA has also argued that cost certainty is an
important issue that should have been addressed by the Bill:
Health funds strongly support all patients being
given information prior to medical treatment in order for them to
give Informed Financial Consent (IFC), in all but emergency cases.
Unexpected out of pocket costs, caused by lack of informed
financial consent an area outside the control of health funds is
currently one of the major causes of discontentment with private
health insurance
In our view obtaining IFC should be required by
legislation rather than relying on self-regulation, because of the
importance of the issue and the need to ensure that it is resolved
permanently, not just for the period of an education
campaign.(56)
CHFA has suggested that the PHIO website be
used as part of a detailed communications strategy to better inform
consumers about the expected costs of private health
services.(57)
AHIA has recommended that private health
service providers (such as hospitals and doctors) also be required
to provide certain types of information in order to better inform
consumers:
Consumers should have access to information about
the performance or success rates of hospitals and doctors so that
they can make informed decisions about their own health. Such
information should recognise the different types of patients and
conditions involved, so that clinicians undertaking more complex or
risky treatments are not penalised. We note that this approach has
been recommended by the recent House of Representatives Standing
Committee Report into Health Funding.(58)
Such a requirement would most likely face
opposition from health service providers concerned with issues such
as privacy.
Possibly in light of continuing community
concern over premium rises, the Private Health Insurance Exposure
Draft Bill released in October 2006 proposed that health insurance
premiums be set for one year.(59) This measure was
likely to have protected consumers against irregular premium rises
and ensure that insured persons can be sure of the costs of their
health insurance for 12 months .(60) In effect the Draft
Bill proposed an annual contract guaranteeing 12 month protection
to consumers on premium rates.
However, when the final Bill was introduced to
Parliament in December 2006 this measure had been dropped. In his
second reading speech the Health Minister acknowledged that the
government had previously announced that it would legislate to
provide annualised health insurance contracts, so that a member
would not face more than one rate adjustment in any one premium
year .(61) But following extensive consultation the
government had decided not to proceed with the measure on the
grounds of expense and efficiency and rely instead on industry to
practice responsible self-regulation .(62)
It should be noted, though, that (as can be
seen from the Chart below) premium rises have continued to be above
CPI under the current self-regulation arrangements. The current
arrangement, whereby annual premium increases for private health
insurance are announced by the Minister early each year, attract
considerable media attention and often trigger complaints to the
Private Health Insurance Ombudsman when larger rises occur.
Under the Bill there is no restriction on the
number of premium rises that can be sought by a health fund in any
one year. Arguably, the dropping of the annualised contract measure
represents a missed opportunity to improve consumer protection and
restrict irregular, or multiple, premium rises.
Chart 1: Comparison between annual percentage
increases in private health insurance premiums and the consumer
price index(63)

The current arrangements governing premium
increases were the result of reforms introduced in September 2002.
These reforms allowed health funds to make annual adjustments to
their premiums at or below the Consumer Price Index (CPI) with
little fear that the Minister would disallow the
increase.(64)
Health funds seeking annual premium increases
above the CPI rate were required to submit reasons to the
Department for the premium change.(65) Further, the
Health Minister was empowered under section 78 (4) of the National
Health Act to disallow any premium increase if it was deemed not to
be in the public interest. However, since 2001 no premium increases
have been disallowed (although some have been subject to
adjustment(66)).
While the reforms announced in 2002 aimed to
address consumer concerns over premium rises, some concerns
remained. The Private Health Insurance Ombudsman (PHIO) continued
to receive complaints over premium rises, although these declined
in 2005.(67) However, PHIO viewed this decline in
complaints as an indication that consumers now expect health fund
premiums to rise .(68) Further, PHIO notes that price
remains the most important factor in consumers key decisions about
private health insurance .(69) Premium rises are also
extensively reported in the media, with a number of commentators
criticising the last round of premium increases in
2006.(70) Premium rises for 2007 are yet to be
announced, although media reports suggest they are expected to be
lower than in previous years.(71)
Ministerial approval of premium rises is
retained under this Bill in Clause 66-10. Under the Bill any
private health insurer wishing to change the premium amount for a
complying health insurance product must apply to the Minister for
approval at least 60 days before the change is due to come into
effect. The Bill requires the Minister to approve the change unless
any increase would be contrary to the public interest (although
this is not defined).(72)
While the Minister retains final authority
over premium rises, the Bill does not specify that funds must show
justification for these rises. Nor does the Bill provide details of
any criteria to be used by the Minister in making his decision,
although the Health Minister has previously made a commitment to
developing clear criteria against which premium increases will be
considered.(73)
The AMA has questioned the retention in the
Bill of the Government s power to regulate premiums, arguing that
direct price regulation is ultimately distorting and that the best
method of price control is vigorous competition.(74)
Section 82BA(2)(c) of the National Health Act
makes minimising the level of health insurance premiums an
objective of PHIAC. However, the Australian Physiotherapy
Association (APA) notes that this clause has been removed from the
Bill to the less explicit requirement that PHIAC protect the
interests of consumers .(75) APA argues that minimising
premiums remains vitally important and recommends that this remain
an objective of PHIAC.(76)
This Bill changes the registration
requirements for private health funds. Section 126-10 requires that
health insurers be registered corporations under the
Corporations Act 2001, as well as with PHIAC. Under
current arrangements health funds are required to be a company
limited by shares, by guarantee, or by both shares and guarantee
and registered as a health benefits organisation (RHBO) with PHIAC.
This shift to registration under the Corporations Act 2001
is not expected to be a problem for the industry as most funds are
already incorporated. Further, the PHI transitional provisions and
consequential amendments Bill (s 18-2 (b)) allows for those funds
not registered with ASIC to do so by 1 July
2008.(77)
Section 134-1 allows health insurers to have
more than one health benefits fund, but also restricts them to one
health insurance benefits fund per risk equalisation jurisdiction,
unless the funds were established and registered before
commencement of the Act (risk equalisation jurisdictions will be
defined in the subordinate rules, but would be generally equivalent
to current state and territory boundaries). Currently some health
insurance funds operate only in one state, others operate
nationally with varying levels of market share in each state, and
some funds use different brand names in different jurisdictions
(for example the national fund BUPA is branded as Mutual Community
in South Australia and the Northern Territory and HBA in the other
states).
While restricting health insurers to one fund
per jurisdiction, the Bill allows for exemptions to the rule
restricting health funds to one business per jurisdiction to allow
insurers flexibility .(78) Under the exemption
provisions it will be allowed to restructure the national fund into
smaller entities while also keeping its separate state branded
funds.(79) These exemptions will be specified in the yet
to be released subordinate Private Health Insurance (Health
Benefits Fund Policy) Rules.
Arguably, smaller jurisdictions with fewer
health funds will be more affected by the exemption provisions than
larger jurisdictions. This could potentially have an impact on
competition in these jurisdictions.
A health fund must have as its dominant
purpose the health insurance business, but Clause 134 allows for a
health fund to operate other health related businesses (this was
not previously allowed). The kinds of businesses that will be
allowed can be any (or any combination) of the following:
- health related goods and services for example, clinics and
hospitals
- health insurance for people in Australia who are not eligible
for Medicare such as overseas students or visitors
- health related financial products such as savings products to
assist people meet the cost of healthcare.(80)
By allowing for a wider range of health
related business activity the Bill addresses industry suggestions
for greater flexibility in developing products outside the current
scope of health benefits.(81) This broadening of
business activity will be limited; the health insurer must divest
itself of any health-related businesses as directed, if PHIAC is of
the view that the health insurance business is no longer the
dominant business.(82)
Even so, allowing a health insurer to own
medical clinics or hospitals while offering health insurance
products raises some issues of potential concern. For example, it
is unclear what impact any ownership might have on Hospital
Purchaser Provider Agreements (HPPA). This is where health funds
negotiate an agreement with a hospital or health provider on the
price payable by the fund for an episode of care so that patients
thus covered do not pay a gap . In the past Australian Competition
and Consumer Commission (ACCC) has raised concerns over ongoing
disputes between providers (mainly private hospitals) and the
health funds, and the disuse of the voluntary code of conduct that
is meant to govern these negotiations.(83) While
ownership arrangements may assist policy holders who are covered by
a health fund that has an ownership interest in a particular
hospital or with a particular provider, it may disadvantage policy
holders from other health funds who maybe shut out of an agreement,
particularly those in regional locations where hospital choice is
limited. Under the current Bill there are no disclosure provisions
requiring the health insurer to advise consumers of all their other
health related business activities. Arguably, such disclosure would
assist consumers in making an informed choice.
The AMA has raised concerns about the
involvement of private health insurers in the provision of care,
arguing that there are fairly obvious conflicts of interest
.(84) It has recommended that provisions be added to the
Bill to more clearly establish this separation , arguing that it is
not sufficient to do this via business rules or other subsidiary
legislation .(85)
The Bill allows for an insurer to restructure,
merge or acquire a health benefits fund by gaining approval from
PHIAC. Provisions under section 146 allow for a fund to restructure
or merge by changing the health benefits fund to which a health
fund policy is referable. PHIAC is required to approve an
application as long as it is reasonable and will not result in
unfairness to the current or future policy holders, and provided it
does not breach any solvency or capital standards. Any acquisition
of a fund by another fund must also meet the requirements under
section 134-1 that limit the number of health benefits funds that
can exist in a particular risk equalisation jurisdiction.
In addition to these provisions, any merger
and acquisition activity would most likely attract the attention of
the ACCC. Whilst the Bill does not expressly preserve the operation
of Section 50 of the Trade Practice Act 1974, there does
not appear to be any intention to exclude it. Mergers of private
health insurers have come under ACCC scrutiny in the past. Most
recently the ACCC approved the acquisition of NRMA Health by MBF in
July 2003.(86) A former Commissioner has suggested that
any merger activity between the market leaders would attract very
close scrutiny from the ACCC:
We would be concerned in respect of merger
proposals by any of the top five or six of the health funds,
particularly amongst themselves It would require very close
scrutiny. And in some instances, depending on whether the market is
state or national, even one of the top five or six merging with one
of the smaller funds may require us to have a look at
it.(87)
Divisions 140 and 143 of the Bill provides for
PHIAC to set standards in relation to solvency and capital adequacy
(which may be different for different health funds), and to grant
exemptions and give directions. The Bill requires health insurers
to comply with solvency and capital standards, and for PHIAC to
enforce these standards.
Clauses 333-20 and 333-25 of the Bill provide
for the making of subordinate private health insurance rules as
legislative instruments by the Minister and PHIAC (respectively).
Health insurer MBF has recommended that requirements be included in
the Bill relating to how and when these rules can be
made.(88)
According to the Explanatory Memorandum, there
will be no financial impact for government from this legislation.
Funding for these initiatives was announced in the last Budget by
the Health Minister.(89) According to the Budget papers
more than $61 million has been allocated over four years to
implement the private health insurance reforms.
The Table below shows the budget breakdown of
the $61.8 million total allocated for the package.
Measure
|
2006-07
|
2007-08
|
2008-09
|
2009-10
|
PHI
Regulation
|
1.3
|
1.1
|
0.7
|
0.3
|
PHI
enhanced choices
|
9.7
|
18.1
|
10.7
|
15.3
|
PHI
improvement to products
|
1.9
|
1.0
|
0.7
|
1.0
|
Total
|
12.9
|
20.2
|
12.1
|
16.6
|
Source: 2006-07 Budget
(90)
Main provisions
As noted above, this Bill replaces the current
regulatory regime for private health insurance (contained mainly in
the National Health Act, Health Insurance Act and Private Health
Incentives Act) with a new regime contained within the one Act.
Chapter 1 addresses
preliminary matters such as commencement of the Bill (Clause 1-5),
definitions (Clause 1-10), the structure of the Bill (Clauses 3-1
to 3-30) and Constitutional matters (Division 5).
Chapter 2 provides for the
measures designed to encourage people to purchase private health
insurance. These include the Private Health Insurance Rebate
(Divisions 23 and 26) and Lifetime Health Cover (Division 31). The
provision (outlined above) removing Lifetime Health Cover Loadings
from people who have paid a loading for ten continuous years is in
Clause 34-10.
This Division also seeks to simplify the rules
for determining a person s status for the purposes of Lifetime
Health Cover. A flow chart for working out a person s Lifetime
Health Cover base day can be found in Clause 34-25.
Chapter 3 sets out the rules
for complying health insurance products under the new regime. These
include adherence to the principle of community rating, and
requirements relating to premiums, benefits, waiting periods,
portability, quality assurance and the provision of certain
information.
Community rating provisions (Part 3-2) are
essentially the same as in the National Health Act but with minor
changes, such as the addition of a new provision allowing insurers
to determine a person s entitlement to benefits for general
treatment (other than hospital substitute treatment) by reference
to the amount already claimed by that person during a period
(unspecified in the PHIB) (Division 55-5(2)(g)).
The role of the Minister for Health and Ageing
in approving premium increases for complying health insurance
products (discussed above) is set out in Clause 66-10.
Coverage requirements for complying health
insurance products are established in Clause 69-1. Broader Health
Cover is introduced in 69-1(1)(b) ( specified treatments that are
hospital treatments and specified treatments that are general
treatment ).
The requirements on insurers to provide
certain types of information to consumers, the Department of Health
and Ageing, PHIAC and PHIO can be found in Division 93. These
include the new standard information statements discussed above
(Clauses 93-1, 93-5, 93-10, 93-15 and 93-20).
Chapter 4 provides for
various obligations on those registered to carry out private health
insurance. Key provisions include:
- prohibition on carrying on health insurance business without
registration (Clause 118-1)
- definition of health insurance business, including the meanings
for hospital treatment and general treatment (Division 121)
- the process for registering a health insurance business
(Division 126)
- the requirement that those registered to carry out private
health insurance must have health benefits funds (Clause
134-1)
- requirements related to the establishment (Clause 134-5),
operation (Division 137), merger (Division 146) and termination
(Division 149) of health benefits funds.
These provisions largely replicate provisions
in existing private health insurance legislation but in simplified
and clarified form.
Chapter 5 provides for
enforcement of the Bill by the Minister and PIAC. It includes a new
broad offence provision in Clause 84-1, directed at dealing in
non-complying health insurance policies. Offenders will be liable
for a fine of up to 1000 penalty units ($110 000) or 5 years
imprisonment. Where a corporation commits this offence, its
directors or CEO can be personally liable to the same penalties but
only where they failed to exercise due diligence to ensure that
adequate systems were in place to prevent the insurer from
committing the offence (Clause 84-5).
Chapter 6 includes a range of
administrative provisions. These include establishment of PHIO
(Part 6-2) and PHIAC (Part 6-3) and the making of subordinate
private health insurance rules as legislative instruments (Clauses
333-20 and 333-25). As noted above, health insurer MBF has
recommended that the Bill be amended to include requirements
regarding any changes to the Bill through the
rules.(91)
Schedule 1 provides a
dictionary defining terms used in the Bill.
Concluding comments
This is a large and
comprehensive Bill that creates a new regime for the regulation
of private health insurance. The Bill has been developed over many
months following consultation with the industry. Much of the Bill
is relatively uncontroversial but some changes have attracted
criticism.
The creation of a new (simplified and
clarified) regulatory regime appears to be broadly supported by the
industry and other groups, though (as discussed above) not without
reservation in relation to particular provisions. The provisions
requiring health insurers to produce standard information
statements for consumers also appear to be supported by consumers
(though, the CHFA has suggested some improvements) and others but
the health insurance industry body (AHIA) would like to see similar
requirements extended to private health care providers. While this
would most likely be opposed by providers, it could be argued that
such requirements would be consistent with the Government s
objective to improve the nature and extent of information available
to consumers.
The proposed introduction of Broader Health
Cover has been the most controversial aspect of the Bill. The
Government argues that this is a groundbreaking change that will
allow health insurers to develop more flexible and innovative
products that reflect modern clinical practice and consumer
expectations .(92) Much of the industry appears to
support the general thrust of Broader Health Cover, though some
have concerns about particular aspects of the regulatory framework
within which it is being introduced. For example, the private
hospitals industry body (APHA) have concerns about the quality and
safety regime and (along with the AMA) the potential for
interference in clinical decision-making, while the health
insurance industry and others have argued that aspects of the rules
for Broader Health Cover are too restrictive and may inhibit
innovation.
Some critics of Broader Health Cover have
emphasised what they see as significant technical problems and/or
unintended consequences. These include possible erosion of the
principles of universality and community rating and rejection of
the proposition that Broader Health Cover will help restrain health
system costs.
Given the above, there are two fundamental
questions in relation to Broader Health Cover that may be worth
asking. First, will it deliver the kinds of improvements (for
example, in relation to industry sustainability) foreshadowed by
the Government and industry supporters of the Bill? Second, does
Broader Health Cover amount to a significant erosion of
universality and/or community rating or just small changes of
emphasis (perhaps justifiable by the potential gains)?
Endnotes
- Information in this section adapted from L.
Buckmaster and J. Davidson, The proposed sale of Medibank
Private historical, legal and policy perspectives, pp.
14-15.
- PHIAC, Operations of the Registered
Health Benefits Organisations Annual Report 2005
06, Canberra, 2006, p. 21.
- PHIAC, Operations of the Registered
Health Benefits Organisations Annual Report 2005 06, op. cit.,
p. 21.
- Standard and Poor s, Australian Health
Insurance Report 2006, Standard and Poor s, Melbourne, 2006,
p. 24.
- PHIAC, Operations of the Registered
Health Benefits Organisations Annual Report 2005 06, op. cit.,
pp. 1, 23.
- ibid., p. 1.
- ibid., p. 23.
- ibid., p. 1.
- PHIAC, Operations of the Registered
Health Benefits Organisations Annual Report 2004 05, op. cit.,
p. 3.
- For example, see J. Breusch, Soaring
sharemarket keeps lid on health premiums , Australian Financial
Review, 3 January 2007.
- PHIAC, Operations of the Registered
Health Benefits Organisations Annual Report 2005 06, op. cit.,
p. 21.
- PHIAC, Operations of the Registered
Health Benefits Organisations Annual Report 2005 06, op. cit.,
p. 21.
- P. Gross, Radical reform of Medicare and
private health insurance inevitable, says Gross ,
Healthcover, December 2002 January 2003, pp. 40 41; I.
McAuley, Stress on public hospitals why private health
insurance has made it worse, Discussion paper for the
Australian Consumers Association and the Australian Healthcare
Association, January 2004, p. 14.; S. Leeder and I. McAuley, Why
health insurance is unsustainable , New Matilda, 1 June
2005, p. 1. See also the discussion in A. Pratt, Public versus
private? An overview of the debate on private health insurance and
pressure on public hospitals, Parliamentary Library, Research
Note, 20 June 2005, no. 54, 2004 05.
- See, for example A. Kinna, Private health
insurance: the sad history of a system in crisis , Online
Opinion, 26 February 2003, p.3. Ian Harper has described this
situation, in which, the sick members of PHI funds are increasingly
required to fund the healthy as inconsistent with the principles of
community rating and has used this as a defence for government
measures to increase PHI coverage such as the PHI and Lifetime
Health Cover. See I. Harper, Preserving choice: a defence of
public support for private health care funding in
Australia, Harper and Associates (for Medibank Private), 1
January 2003, p. 6.
- P. Gross, Radical reform of Medicare and
private health insurance inevitable, says Gross , op. cit., p. 41;
I. McAuley, Behind the smokescreen here comes the nanny corporation
to manage our bodies , New Matilda, 3 May 2006, p. 1; K.
Harvey, The sale of Medibank Private , New Matilda, 1
March 2006, p. 3; Standard and Poor s, Australian Health
Insurance Report 2006, op. cit., p. 9.
- Explanatory Memorandum, p. 5.
- Explanatory Memorandum, p. 5.
- Explanatory Memorandum, p. 5.
- Explanatory Memorandum, p. 2.
- Hon. Tony Abbott, Private Health Insurance
Bill 2006 Second reading speech , House of Representatives,
Debates, 17 December 2006, p. 2.
- A draft of these Rules is available from the
Department of Health and Ageing website at
http://www.health.gov.au/internet/wcms/publishing.nsf/Content/C7D79F13DA8CE477CA257273001C5DED/$File/1170222156-MicrosoftWord-115820894_0418121_KLR01_HealthInsuranceBusinessRules2007.DOC.pdf
(accessed 7 February 2007).
- Hon. Tony Abbott, Private Health Insurance
Bill 2006: Second reading speech , op. cit., p. 2.
- ibid.
- PHIAC, Insure? Not sure? Your guide to
private health insurance, at http://www.phiac.gov.au/insurenotsure/pdf/insure.pdf,
accessed 16 January 2007.
- Hon. Tony Abbott, Private Health Insurance
Bill 2006 Second reading speech , op. cit., p. 3.
- Private Health Insurance Bill 2006:
Explanatory memorandum, p 17.
- Explanatory Memorandum, pp. 9, 12-13.
- Explanatory Memorandum, p. 13.
- Explanatory Memorandum, p. 2.
- PHIAC, Operations of the Registered
Health Benefits Organisations Annual Report 2005 06, op. cit.,
p. 12.
- Explanatory Memorandum, p. 12
- ibid.
- ibid.
- The CHERE submission notes that whilst
ancillary insurance covers some outpatient services such as optical
products, dental care and physiotherapy, they typically do not
cover services that could be regarded as substitutes for
in-hospital care such as dialysis and chemotherapy . Centre for
Health Economics Research and Evaluation (CHERE), CHERE
Submission to the Senate Community Affairs Committee Inquiry into
the Private Health Insurance Bill 2006 [Provisions] And Related
Bills, Submission no. 13, January 2007, p. 4.
- ibid.
- ibid., pp. 9, 4.
- Quoted in P. Smith, Fears of two-tier medical
system , Australian Doctor, 3 November 2006.
- ibid.
- CHERE, op. cit., pp. 8-9.
- CHERE, op. cit., p. 6.
- CHERE, op. cit., p. 6.
- P. Gross, Demutualisation of Medibank
Private and new government push for health insurance for
out-of-hospital care might accelerate medical savings accounts and
healthier lifestyles, media release, 21 October 2006.
- See DoHA, Broader Health Cover Regulatory
Framework, Private Health Insurance Circular, PHI 78/06, 15
December 2006, p. 4.
- Australian Health Insurance Association
(AHIA) AHIA Submission to the Senate Community Affairs
Committee, Private Health Insurance Bill 2006, Submission no.
7, 25 January 2007, p. 2.
- Australian Private Hospitals Association
(APHA), Submission by the Australian Private Hospitals
Association for the Private Health Insurance Bill 2006,
Submission no. 11, 25 January 2007, p. 5.
- ibid.
- ibid.
- Australian Medical Association (AMA),
Submission to the Senate Community Affairs Committee on the
Private Health Insurance Bill 2006 (provisions) and related
Bills, Submission no. 14, January 2007, p. 6.
- APHA, op. cit., p. 2.
- AMA, op. cit., p. 8.
- ibid., p. 3.
- Ian McAuley, Private Health Insurance
Bill 2006 and related Bills: Submission by Ian McAuley, Adjunct
Lecturer in Public Sector Finance, University of
Canberra, Submission no. 2, January 2007, p.
2.
- Hon. Tony Abbott, Greater choice in
private health, media release, 9 May 2006.
- The website URL is www.iselect.com.au accessed 18
January 2007. It currently provides product recommendations for 4
health funds.
- Consumers Health Forum of Australia (CHFA),
Inquiry into Private Health Insurance Bill 2006 (provisions)
and related Bills Senate of Australia (Community Affairs
Committee), Submission no. 10, January 2007, p. 2.
- AHIA, op. cit., p. 5.
- CHFA, op. cit., p. 2.
- AHIA, op. cit., p. 4.
- Private Health Insurance Bill 2006
(Exposure Draft), Clause 66-5.
- Department of Health and Ageing (DoHA),
Private Health Insurance Bill 2006: Guide to the Exposure
Draft, October 2006, p 6.
- Hon. Tony Abbott Private Health Insurance
Bill 2006: Second Reading Speech , op. cit. p. 3.
- ibid.
- Note that no premium increases were allowed
in 2001. Chart produced by Greg Baker, Statistics and Mapping
Section, Parliamentary Library.
- Senator the Hon. K Patterson, Private
health reforms to deliver better value for money for fund
members, media release, 11 September 2002.
- DoHA, Private health circulars HBF 796 PH525
and HBF 805; See Schedule 1B, HBF 805.
- See for example, Hon. Tony Abbott,
2006-07 Private Health Insurance Premiums, media release,
24 February 2006.
- Private Health Insurance Ombudsman (PHIO),
State of the health funds report 2005, PHIO, Sydney, p.
6.
- ibid.
- ibid.
- See for example Ruth Pollard Health fund fees
up 33% in five years Sydney Morning Herald, 25 February
2006; Annabel Stafford Health premiums streak past inflation
Australian Financial Review, 25 February 2006.
- See for example John Breusch Medicare
surcharge income test to stay Australian Financial Review
10/1/2007; Laura Anderson Huge claims on health funds The
Advertiser, 10/1/2007.
- Private Health Insurance Bill 2006,
Clause 66-10(3).
- The requirement of ministerial approval for
premium increases will remain but there will be clear criteria
against which applications for increases will be considered . Hon.
Tony Abbott and Hon. Nick Minchin, More innovations, greater
choice in private health, Media release, 26 April 2006.
- AMA, op. cit., p. 4.
- Australian Physiotherapy Association (APA),
APA Submission to the Senate Community Affairs Committee
Inquiry into the Private Health Insurance Bill 2006 [Provisions]
and Related Bills, Submission no. 5, January 2007, p. 11.
- ibid.
- As far as we can determine two funds are not
currently incorporated; these are ACA Health (a restricted
membership fund) and HIF WA.
- DoHA, Private Health Insurance Bill 2006:
Guide, December 2006, p. 6.
- ibid.
- ibid.
- DoHA, Discussion paper private
health insurance: cover innovation and regulatory reform,
Private Health Insurance Circular, PHI 34/06, 15 June 2006, p
11.
- See the Bill, Clause 134-10.
- The Australian Competition and Consumer
Commission (ACCC) has noted ongoing problems with HPPA contracting
in its most recent Report to the Senate: Report to the
Australian Senate on anti-competitive and other practices by health
funds and providers in relation to private health insurance for the
period 1 July 2005 to 30 June 2006, ACCC, Dickson, ACT, 2006,
p 20. For specific examples see its comments on take it or leave it
threats in negotiations between health funds and hospitals in its
2003 report. ACCC, Report to the Australian Senate on
anti-competitive and other practices by health funds and providers
in relation to private health insurance for the period 1 January
2002 to 30 June 2003, ACCC, Dickson, ACT, 2003, section
4.3.
- AMA, op. cit., p. 9.
- ibid.
- ACCC, Report to the Australian Senate on
anti-competitive and other practices by health funds and providers
in relation to private health insurance for the period 1
January 2002 to 30 June 2003, op. cit.
- S. Bhojani, The sale of Medibank Private:
gone but not forgotten , HealthCover, 13:4, 2003, p.
44.
- Medical Benefits Fund of Australia (MBF),
Submission to the Senate Community Affairs Committee Inquiry
into the Private Health Insurance Bill 2006 [Provisions] And
Related Bills, Submission no. 13, January 2007, p. 15.
- Hon. Tony Abbott, Greater choice in
private health, op. cit.
- Hon. Peter Costello, Budget Measures
2006-07: Budget Paper no. 2, pp 278-279.
- MBF, op. cit., p. 17.
- Hon. Tony Abbott, Second reading
speech, op. cit., p. 2.
Amanda Biggs and Luke Buckmaster
8 February 2007
Social Policy Section
Parliamentary Library
This paper has been prepared to support the work of the
Australian Parliament using information available at the time of
production. The views expressed do not reflect an official position
of the Parliamentary Library, nor do they constitute professional
legal opinion.
Staff are available to discuss the paper's
contents with Senators and Members and their staff but not with
members of the public.
ISSN 1328-8091
© Commonwealth of Australia 2007
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Published by the Parliamentary Library, 2007.
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