This Bills Digest replaces a preliminary Digest published on 3 March 2026 to assist in early consideration of the Bill. 

Key points

• The purpose of the Health Legislation Amendment (Improving Choice and Transparency for Private Health Consumers) Bill 2026 (the Bill) is to:
  • improve costs transparency for consumers by allowing the Department of Health, Disability and Ageing to publish information on medical fees charged by medical practitioners on the Medical Costs Finder website
  • abolish ‘product phoenixing’ (the practice of closing existing policies and replacing them with almost identical policies at a higher price) in the private health insurance sector by requiring insurers to seek Ministerial premium approval for new products, and existing products where certain changes are proposed. 
• Updating the Medical Costs Finder was a commitment made by the Albanese Labor Government prior to the 2025 election.
• The legislation has been welcomed by the Australian Medical Association and Private Healthcare Australia.
• The Bill has been referred to the Senate Community Affairs Legislation Committee for inquiry and report by 15 April 2026.
• The Senate Standing Committee for the Scrutiny of Bills raised concerns with the Bill relating to immunity from civil liability; exemption from disallowance; and fees in delegated legislation. The Committee has sought advice from the Minister on these matters. At the time of publication, a response from the Minister has been received, but not published.

Introductory Info

Date of introduction: 12 February 2026
House introduced in: House of Representatives
Portfolio: Health, Disability and Ageing
Commencement: Sections 1 to 3 and other remaining provisions commence on the day of Royal Assent. Schedule 1 commences on the day after Royal Assent. Schedule 2 commences on the later of the day after Royal Assent and 1 April 2026

Purpose of the Bill

The purpose of the Health Legislation Amendment (Improving Choice and Transparency for Private Health Consumers) Bill 2026 (the Bill) is to:

• amend the Health Insurance Act 1973 (HI Act) and Private Health Insurance Act 2007 (PHI Act) to allow the Department of Health, Disability and Ageing (the Department) to publish information for consumers on medical fees charged by medical practitioners and likely out-of-pocket costs on the Medical Costs Finder website
• amend the PHI Act to require private health insurers to seek Ministerial premium approval for new and existing products where certain changes are proposed.

The legislation has been welcomed by the Australian Medical Association and Private Healthcare Australia.

Background

Out-of-pocket costs for medical specialists  

An out-of-pocket cost (also known as a gap or patient payment) is ‘the difference between the amount a doctor charges for a medical service and what Medicare and any private health insurer pays’.

In Australia, medical practitioners determine the fees they charge for the services they provide. Medicare subsidises medical services based on a schedule of fees, known as the Medicare Benefits Schedule (MBS). Health professionals may agree to accept the Medicare benefit as full payment for the service provided[1], or they may choose to charge more than the schedule fee. When a health professional chooses to charge more than the schedule fee, patients are required to pay the difference between the fee charged for the service and the amount Medicare and any private health insurer (if applicable) will pay. This difference is the out-of-pocket cost to the patient.

For several years, out-of-pocket costs have been an increasing concern for both patients and governments. Of particular concern are out-of-pocket costs associated with medical specialists. According to a 2025 report from the Grattan Institute, ‘average out-of-pocket costs for specialist attendances have grown by 73 per cent, in real terms, since 2010’, with the average out-of-pocket costs (for those who paid a bill) being $300 in 2023 (p. 8). Consultation fees can vary significantly between specialist type, practitioner and location (e.g. metropolitan vs rural).

As outlined in the Explanatory Memorandum (EM) to the Bill, out-of-pocket costs are a driving factor in patients not taking up referrals to see a medical specialist, and therefore missing out on medical care. In 2024–25, ‘8.6% of people delayed or missed specialist care (over 800,000 people) because of cost’ (p. 2).  

In March 2019, in an attempt to address issues surrounding out-of-pocket costs, the then Coalition Government announced a ‘national strategy to tackle excessive out of pocket costs charged by medical specialists’, which included the development of a website to ‘provide Australians with transparency … about the costs of specialist services’ (p. 1). Development of the website was a recommendation arising from the Ministerial Advisory Committee on out-of-pocket costs (p. 2).

Medical Costs Finder

The ‘Medical Costs Transparency’ website (the Medical Costs Finder) was launched in December 2019. It is intended to provide consumers with information on typical out-of-pocket costs for a range of medical procedures and services, helping them to make an informed decision when considering treatment and reduce ‘bill shock’. The Medical Costs Finder shows typical fees charged by doctors, associated Medicare rebates and if relevant, contributions from private health insurance.

Following its introduction, the Medical Costs Finder was criticised by both consumers and doctors due to a lack of useful information on the site, particularly in relation to individual specialist fees. While the Medical Costs Finder provides high-level data on average bulk-billing rates and out-of-pocket costs across specialties using administrative data, it provides little information on fees charged by individual specialists. This is primarily because the Department relies on specialists to voluntarily provide data on their indicative fees, gap arrangements and service locations. Information from private health insurers showing their financial arrangements with specialists and how often patients pay out-of-pocket for services is also voluntary to provide (p. 2). Uptake by specialists and insurers to provide these data has been very low, with ‘only 1–2% of specialists and 10% of insurers… participating on the website as at December 2025’ (p. 2).  

Proposed changes

Prior to the 2025 election, the Labor Government announced that if re-elected it would upgrade the Medical Costs Finder website ‘to display the average fee charged by every eligible specialist across all non GP specialities’ using administrative data (p. 2). The 2025–26 Budget provided $7 million over five years from 2024–25 to implement this change (p. 54).

As outlined in the EM, the proposed amendments in the Bill will:

… allow for the publication of the relevant data on the Medical Costs Finder, without the need for input from medical practitioners as it will be drawn from Medicare, hospital and insurer billing data collected by government. Importantly, the amendments will not affect the privacy of consumers and no patient information will be published.

…

authorise the use and disclosure of the relevant datasets (including linkage between them) supporting Transparency by Default. These datasets are Medicare Benefits Schedule claims data, Centralised Register of Medical Practitioners (CROMP) data and Hospital Casemix Protocol 1 (HCP1) data (p. 2).

Regulating private health insurance premiums

Private health insurance is regulated primarily under the PHI Act, the Private Health Insurance (Prudential Supervision) Act 2015, and related rules.

Under section 66-10 of the PHI Act, private health insurers must apply to the Minister for Health for approval of premium changes. The process for approving premium increases occurs once per year during the annual premium round. When seeking a premium increase, insurers are required to provide ‘detailed financial information and cost and benefit projections to justify any increases’. Applications are considered by the Department and the Australian Prudential Regulation Authority prior to the Minister’s consideration. The Minister must approve the proposed change unless satisfied that the change would be contrary to the public interest.

As outlined in the EM, while the process for approving premium increases is currently managed administratively through the annual premium round, ‘insurers can close and open products at any time without Ministerial scrutiny’ (p. 3). This has led to situations where insurers can ‘close an existing product and open an identical or similar new product at a higher premium’ while avoiding the existing oversight requirements regarding premium changes (p. 3). This is known as ‘product phoenixing’.

In recent years, product phoenixing has resulted in some consumers experiencing price increases for private health insurance premiums well above the average approved yearly increase. The practice, which significantly affects top tier gold insurance products, was examined by the Commonwealth Ombudsman in 2024 following reporting by Choice Magazine. As noted in the Ombudsman’s public statement (p. 2):

Similar to Choice Magazine, our data indicates that some insurers have been closing and then opening almost identical private health insurance policies … We found that several ‘new’ Gold policies had been introduced by insurers in the same year as very similar Gold policies were closed by that insurer to new customers. The effect of this practice is that if a new customer wants to buy a Gold policy from that insurer, or an existing customer wants to upgrade their policy to Gold level, they will pay a significantly higher premium compared with policy holders on the very similar old policy (which had a premium increase approved by the Minister).

We compared the average premium across all states/territories for closed Gold policies and new Gold policies. For example, at one insurer, in 2023 the average premium of the new policy was 21 per cent higher than the average premium of the closed policy. In 2024, the average premium of the new policy was 14 per cent higher than the average premium of the closed policy.

These practices may be circumventing premium approval processes, but they are also restricting consumer choice …

In response to the Ombudsman’s public statement, the Minister for Health stated that he ‘share[d] the Commonwealth Ombudsman’s concerns that this practice may be circumventing the premium approval processes and restricting consumer choice’ and considered that the practice should stop (p. 2). In a subsequent media article, the Minister was quoted as saying that he ‘reserve[d] the right to consider legislative options to outlaw the practice into the future’ (p. 1).

The Minister foreshadowed the introduction of the Bill in a Statement of Expectations for the 2026 Private Health Insurance Premium Round. The Minister stated that he had ‘directed the department to develop legislative options’ to prevent product phoenixing and that subject to passage of the legislation, ‘[i]nsurers will be strongly encouraged to apply for new product premiums through the annual Premium Round process’ (p. 2). According to this statement, insurers will retain the right to ‘close or terminate products at any time in order to protect against prudential risk’ (p. 2).   

The Bill seeks to address product phoenixing by amending the PHI Act to require insurers to apply to the Minister for approval of premiums charged for a new product and ‘where changes are made that reduce cover, a benefit or another term or condition of an existing product’ (p. 3).

The Bill also makes additional changes to existing practices that occur under the annual premium round.

Policy position of non-government parties/independents

At the time of writing there does not appear to be any comment from non-government parties or independents on the Bill.

Key issues and provisions

Schedule 1 – Transparency by default and information sharing

Part 1 – Transparency by default

Items 1 and 2 of Schedule 1 amend the HI Act and the PHI Act respectively, to provide for the publication of information related to healthcare costs, such as fees charged and private health insurance benefits available (where applicable), on the Medical Costs Finder website. The amendments made by items 1 and 2 are similar across both Acts.

Health Insurance Act 1973

Item 1 inserts new Part VE – Publication of information about professional services into the HI Act. Part VE is intended to provide greater transparency regarding the costs associated with healthcare services rendered by medical practitioners, thereby assisting individuals to make informed decisions about healthcare services. Proposed section 124ZX sets out the objectives of Part VE. Proposed section 124ZY provides for the publication of information about professional services.

Proposed subsection 124ZY(1) allows the Secretary of the Department to publish information about professional services, rendered by, or on behalf of medical practitioners for which Medicare benefits are payable. The EM notes that ‘[w]hile the focus is on the charging practices of specialists, the department may also publish information about GPs and other medical practitioners and their charging practices’ (p. 6). In an article published on the Royal Australian College of General Practitioners (RACGP) website, a Department spokesperson was quoted as saying that this is ‘to allow flexibility in the future’ but that GPs would not be listed if the laws are passed. The Department spokesperson further stated that ‘[t]he current focus is on the publication of non-GP specialist fees’.

Proposed subsection 124ZY(2) sets out the information that may be published by the Secretary without limiting subsection 124ZY(1), including (pp. 6–7):

• the amount of Medicare benefits paid for particular kinds of professional services rendered by or on behalf of medical practitioners
• the extent of any applicable bulk billing
• fees charged in respect of particular kinds of professional services rendered by or on behalf of medical practitioners
• information relating to particular medical practitioners who render professional services, including the practitioner’s name, their qualifications and specialties, and languages spoken
• information about the locations and hospitals where these professional services are provided.

This information is intended to ‘capture the types of information that consumers indicate would be useful to know about the medical practitioner as a complement to their fee information’ (p. 7). The EM notes that the proposed information that may be published is not considered sensitive information under the Privacy Act 1988 and is ‘reasonable and proportionate for the purpose of providing cost transparency for consumers’ (p. 8). The personal information that will be published (practitioner name, qualifications and languages spoken) is publicly available on the Australian Health Practitioner Regulation Agency’s Register of Practitioners.  

Proposed subsections 124ZY(3)-(6) allow the Minister to specify, by legislative instrument, additional information that may be published and the manner in which information must be published.

Proposed subsection 124ZY(7) provides that information published under that section must not include personal information about an individual who is not, and has not been, a medical practitioner. As set out in the EM, ‘no personal information about patients or consumers will be published under this provision’ (p. 8).

Proposed section 124ZZ provides that a person may use (including by linking or matching) or disclose information for the purposes of assisting the Secretary to prepare information for publication under proposed section 124ZY and/or proposed section 324-5 of the PHI Act. The EM states that the purpose of proposed section 124ZZ is ‘to clarify that departmental officers can use/link and disclose information to assist the Secretary’ in publishing information about professional services (p. 9); however, the text of the Bill does not confine this authorisation  to departmental officers, stating only that ‘a person may use or disclose information for the purposes of assisting the Secretary’. Proposed section 124ZZ will be relied upon for matching MBS claims data with CROMP data (obtained under the HI Act), and either or both of types of data with Hospital Casemix Protocol 1 data (obtained under the PHI Act) (p. 9).

The EM states that ‘the department will incorporate the Guidelines on matching data in Australian Government administration released by the Office of the Australian Information Commissioner in any data matching’ (p. 9).

Proposed section 124ZZA provides that the Secretary is not liable to civil proceedings for loss, damage or injury of any kind as a result of the publication of information under proposed section 124ZY. The Senate Scrutiny of Bills Committee has raised concerns in relation to these provisions (pp. 26–28). See below for further discussion.

Private Health Insurance Act 2007

Item 2 of Schedule 1 inserts new Division 324 – Publication of information about treatments covered by health insurance policies etc into the PHI Act. Proposed section 324-1 explains the policy objective of the Division which is to ‘improve the transparency of costs associated with the provision of hospital treatment and general treatment covered by complying health insurance policies’, thereby assisting individuals to make informed decisions about healthcare services (p. 10).

Proposed section 324-5 allows for the publication of information about treatments covered by complying health insurance policies. Proposed subsection 324-5(2) sets out the information that may be published, which includes (pp. 10–11):

• information on fees charged for particular kinds of covered treatment by medical practitioners and the benefits paid by an insurer relating to that treatment
• information about particular complying health insurance policies and products offered by private health insurers
• information about gap cover arrangements between particular insurers and medical practitioners and agreements between particular private health insurers and hospitals for the provision of covered treatment
• information about the locations and hospitals where particular kinds of covered treatment are provided.

Similar to the proposed amendments to the HI Act, proposed subsections 324-5(3) to (6) allow the Minister to specify, by legislative instrument, additional information that may be published and the manner in which information must be published.

Reflecting proposed subsection 124ZY(7), proposed subsection 324-5(7) provides that ‘information published under section 324-5 must not include personal information about an individual who is not, and has not been, a medical practitioner’ (p. 13). As discussed above, this confirms that patient information will not be published under this provision.

Proposed subsections 324-5(9)-(10) cover circumstances where a healthcare service is provided by a specialist trainee.

Proposed section 324-10 provides ‘that a person may use or disclose information for the purposes of assisting the Secretary’ under proposed section 324-5, and/or proposed section 124ZY of the HI Act. As outlined in the EM (p. 13):

The intended use is to match Hospital Casemix Protocol 1 data with CROMP data and MBS claims data to provide a more holistic picture of a medical practitioner’s charging practices for in- and out-of-hospital services, as well as their professional information to complement the fee information published about them. Consumers indicate having a more holistic picture of the costs of a patient journey (with in- and out-of-hospital costs) would be valuable. Specialists indicate they would value having qualitative information alongside fee information published about them.

The EM provides an example of how the information matched from these datasets may be published on the Medical Costs Finder (see pages 7, 8, 12 and 14). The EM also explains how the data will be analysed to derive the published figures:  

To support the proposed publication of the information on the Medical Costs Finder, the department is developing an analytical approach for the derivation of a single fee figure that can be published for a medical practitioner’s provision of a service for a given financial year (similarly with figures that can be published with regards to hospitals and insurers). The approach will ensure patient privacy is protected and that figures published are credible and meaningful for consumers (p. 3).

Proposed section 324-15 provides that the Secretary is not liable to civil proceedings for loss, damage or injury of any kind as a result of the publication of information under section 324-5. The Senate Scrutiny of Bills Committee has raised concerns in relation to the proposed immunity from civil liability in both the PHI Act and the HI Act (pp. 26-28). In particular, the Scrutiny Committee stated (p. 28):

While the committee notes that the proposed immunity is expressed as applying only to the Secretary, neither the bill nor the explanatory memorandum clarify expressly whether the immunity would extend to the Commonwealth as a whole or whether the Commonwealth would instead be vicariously liable for publication under the proposed sections. Courts have generally taken the view that, in the absence of any express provision to the contrary, the intention of Parliament is for immunities of this kind to extend to the Commonwealth as a whole.

The committee’s position is that it is appropriate for the Commonwealth to remain liable for the actions of its officers and delegates, even those taken in good faith, where there is likely to be an adverse impact on an individual’s rights and liberties. This is to ensure appropriate avenues of recourse are available for affected individuals who are prevented from bringing claims for loss, damage or injury against the Secretary, especially given the wide range of information that may be published under the provisions in the bill.

The Committee has sought advice from the Minister on this matter. At the time of publication, a response from the Minister has been received, but not published.

Part 2—Changes to information sharing arrangements

Proposed amendments in Part 2 of Schedule 1, are intended to ‘make technical changes to the secrecy regime in the PHI Act to make the provisions consistent with amendments to secrecy provisions in other portfolio legislation (such as the HI Act) made by the Regulatory Reform Omnibus Act 2025’ (p. 15).

Section 323-1 of the PHI Act makes it an offence to disclose protected information obtained under the Act. Item 6 of Schedule 1 of the Bill repeals and replaces section 323-1 to expand the offence to include uses of protected information and introduce an offence-specific defence. This means that the defendant will bear an evidential burden to adduce or point to evidence that suggests a reasonable possibility that the use or disclosure of protected information is authorised or required by the PHI Act or another Australian law (for example, provisions which facilitate data-matching). If the defendant does so, the prosecution is then required to meet its legal burden to disprove these matters beyond reasonable doubt. The Government has stated that ‘[t]his change aligns with the Attorney-General Department’s Guide to Framing Commonwealth Offences [Infringement Notices and Enforcement Powers]’ and ‘[g]iven the limited number of authorisations in the PHI Act, the burden on the defendant is unlikely to be unreasonable or difficult’ (p. 16). The maximum penalty for this offence will remain the same as for the current offence (imprisonment for 2 years or 120 penalty units, or both).

Item 8 will amend section 323-5 to expand the circumstances in which the information can be disclosed by a person to include disclosure:

• in the course of performing or exercising a duty, function or power under proposed Part VE of the HI Act
• to the Minister for the purposes of the Minister’s performance of their functions.

The EM (p. 17) sets out the Government’s justification for these amendments and provides examples of the types of disclosures that might arise:

Departmental officers need to disclose information to the Minister on policy and operational matters affecting the administration of the PHI Act and matters affecting the Minister’s portfolio responsibilities. This might occur for a few reasons including media interest in a matter affecting the portfolio, ministerial correspondence, a new policy initiative and matters that have been brought to the department or Minister’s attention. This express authorisation clarifies that information can be shared with the Minister. It is intended that the provision will also allow for disclosures to persons assisting the Minister (that is, Ministerial staff).

Items 11-12 and 14-15 will amend sections 323-15 and 323-20 respectively to allow the Secretary (instead of the Minister) to certify that information about an insurer can be disclosed where the disclosure is in the public interest.

Proposed section 323-23 will allow the Secretary, by an instrument in writing, to specify terms and conditions subject to which information that is disclosed to a person under sections 323‑15 or 323-20 may be used or disclosed by the person. This may include requiring the person to give a written undertaking.

Proposed section 323-33 will allow for the disclosure of information in the following new circumstances:

• the information has already lawfully been published (for example in a court judgment)
• the person to whom the information relates has provided consent to the disclosure
• the information has already been lawfully disclosed to the recipient
• the information to be disclosed relates to the recipient
• the disclosure is for the purpose of obtaining or providing legal advice.

Schedule 2—Regulating premiums

Complying health insurance products

A ‘complying health insurance product’ is an insurance policy that:

• is provided by a registered health insurer
• provides hospital cover, or general (also known as 'extras') cover, or combined hospital and general cover
• meets other complying private health insurance policy requirements.

Health insurance premiums are set for product subgroups of health insurance products. As explained in the EM (p. 26), a ‘complying health insurance product’ will generally consist of multiple subgroups for different:

• risk equalisation jurisdictions (for example, different premiums for the same product for policy holders who live in Victoria vs those in the risk equalisation jurisdiction that includes New South Wales, Norfolk Island and the Australian Capital Territory)
• insured groups (for example a different premium for singles, couples and other family groupings).

Paragraph 55-5(2)(d) of the PHI Act makes clear that it is not considered improper discrimination for an insurer to charge a different premium for different product subgroups.

Minister approval of premium changes

Section 66-10 of the PHI Act requires private health insurers to apply to the Minister for approval to change the premiums charged for a complying health insurance product. The application may propose different changes for policies in the product, but the proposed changed amount must be the same for each policy in the product that belongs to the same product subgroup.

The Minister must, by written instrument, approve the proposed premium, unless the Minister is satisfied that an increase to the premium would be contrary to the public interest. The concept of the ‘public interest’ is not defined in the PHI Act. According to the EM (pp. 28, 31), it ‘provides a broad discretion for the Minister to consider relevant matters, which could include policy considerations in addition to the information provided by the insurer.’

Item 8 of Schedule 2 of the Bill will repeal section 66-10 and replace it with new provisions which will require private health insurers to seek approval from the Minister for:

• premiums to be charged for a new health insurance product subgroup (proposed section 66-8)
• changes to premiums for existing health insurance products (proposed section 66-10)
• premiums charged for existing health insurance products where a change is proposed that diminishes the cover or benefits provided to consumers under those products (referred to as a designated change, discussed below)(proposed section 66-10).

Different public interest tests will apply depending on whether the application is submitted within the ‘approved application period’ (discussed further below).

These changes will not prevent an insurer from charging a different premium for different product subgroups (Item 1 of Schedule 2). The Minister must, by written notice to the insurer, either approve or refuse to approve the proposed premiums (proposed subsections 66-8(4) and 66-10(4)). As is the case currently, if the Minister refuses to approve the proposed premiums, the Minister must table their reasons for refusal in each House of the Parliament no later than 15 sitting days of that House after the refusal (proposed subsections 66-8(9) and 66-10(9)).

The EM explains that if an insurer makes a designated change to a policy without receiving a new approval for the premium, then the policy will not be a complying health insurance policy, and the insurer would be committing an offence under section 84-1 (p. 32). The maximum penalty is 1,000 penalty units or imprisonment for 5 years or both.

The Bill also introduces new provisions which will:

• allow the Minister to request further information about an insurer’s application (proposed section 66-11) and
• require the Minister, if they propose to refuse a premium application, to give an opportunity for the insurer to amend and resubmit their application or set out reasons why they should not be required to resubmit their application (proposed section 66-12).

Approved application period

The ‘approved application period’ will be either 55 days beginning on the third Friday in September each year, or a different period as determined by the Minister by legislative instrument (proposed subsections 66-6(1)-(2)). The Scrutiny of Bills Committee has raised concerns that a legislative instrument made under proposed subsection 66-6(2) is not subject to disallowance by virtue of proposed subsection 66-6(3) and that the justification provided by the Government in the EM (pp. 24-25) for this exemption is not sufficient (pp. 29–31).

The amendments will only apply with respect to an application for approval of proposed premiums that is made on or after the commencement day of Schedule 2 (Item 15 of Schedule 2). However, for premium applications submitted but not finalised before the commencement of Schedule 2, the Minister must deal with the application under section 66-10 as it was prior to Schedule 2 commencing and any premium approved is taken to be an approval under section 66-10 as amended by Schedule 2 (Item 16 of Schedule 2).

Application fees

When applying to the Minister, private health insurers will be required to pay an application fee if one is specified in the Private Health Insurance (Product Premium) Rules (item 12 of Schedule 2; proposed paragraphs 66-8(2)(b) and 66-10(2)(b)).

According to the EM (p. 27), there is no current intention to implement a fee on commencement of these provisions:

However, fee charging may be considered in the future. The intention is that fees may be applied for a particular class of applications, for example those made outside the approved application period, or for all applications. A fee may be more likely to be implemented for new applications if there is a large volume of applications outside the approved period or a large volume of poor quality applications.

Any fee would be made in accordance with the Department of Finance’s Australian Government Cost Recovery Policy, and insurers would be consulted as part of the process for considering a Rule setting a fee(s).

The Scrutiny of Bills Committee raised concerns (pp. 31–32) regarding the lack of specification in the Bill on how fees will be calculated and sought the Minister’s advice on:

• why it is appropriate for proposed paragraphs 66-8(2)(b) and 66-10(2)(b) to provide that applications must be accompanied by a fee that is to be determined by delegated legislation and
• why it would not be appropriate for the bill to include a limitation on the amount of the fee that may be set in delegated legislation (such as a requirement for the amount to be limited to cost recovery).

At the time of publication, a response from the Minister had been received but not published.

Minister’s approval of premiums charged under new product subgroups

Proposed section 66-8 introduces a requirement for insurers to apply to the Minister for approval of a proposed premium or premiums when opening a new product subgroup.

The Bill set outs two different public interest tests which the Minister must apply depending on whether the application to approve the premiums was submitted within the ‘approved application period’:

• for applications submitted within the approved period – the Minister must approve the proposed premiums, unless the Minister is satisfied that approval would be contrary to the public interest (proposed subsection 66-8(5))
• for applications submitted outside the approved period – the Minister must approve the proposed premiums if, and only if, the Minister is satisfied that approving the proposed premiums is in the public interest (proposed subsection 66-8(6)).

According to the EM, ‘it is considered that the public interest is usually better served by having most premium applications managed in accordance with the usual timeframes’:

The purpose of having a different public interest test under subsection 66-8(6) is to disincentivise insurers from applying outside the ‘approved application period’ but preserve the opportunity to do so. This is achieved by subjecting applications lodged under 66-8(6) outside the approved application period to a higher public interest threshold. Applications submitted outside the approved period may, for example, set out special, unusual or unexpected circumstances that mean the application is in the public interest, despite the strong desire for predictability and a consolidated review of premiums achieved through applications submitted in the approved period. (p. 28)

Minister’s approval if certain changes are made to premiums or products

In addition to being required to apply to the Minister for approval of a change to a premium, which is the case currently, proposed subsection 66-10(1) will require insurers to apply for premium approval if there is a ‘designated change’ to the product.

Proposed section 66-7 provides that a ‘designated change’ means a change:

• that results in a reduction in, or removal of, a treatment that is covered by an existing product
• that results, or might result, in a benefit under the product being reduced and is of a kind specified in the Private Health Insurance (Product Premium) Rules
• to any other term or condition of the product that results, or might result, in the value to persons insured under a policy that belongs to the product being reduced and is of a kind specified in the Private Health Insurance (Product Premium) Rules.

The EM sets out examples of what might or might not constitute a ‘designated change’ and states that:

Whether or not a change to an existing product is a reduction of the nature set out in section 66-7 is not to be considered cumulatively or as a net impact. If one or more of the kinds of changes specified is present, then premium approval is required. (p. 26)

As with applications for new products, different circumstances will apply depending on whether a premium application relating to an existing product is submitted within the ‘approved application period’.

Proposed subsection 66-10(5) provides that if an application is made within the ‘approved application period’, the Minister must approve the proposed premiums, unless:

• the insurer proposes to:
  • increase premiums
  • make a designated change or
  • both increase premiums and make a designated change

and

• the Minister is satisfied approval would be contrary to the public interest.

Proposed subsection 66-10(6) provides that if an application is made outside the ‘approved application period’, the Minister must:

• approve the proposed premiums if, and only if, either:
  • the insurer does not propose to increase the premiums and does not propose to make a designated change or
  • the insurer proposes to increase premiums, or make a designated change, or both increase premiums and make a designated change, and the Minister is satisfied approval is in the public interest
• otherwise, refuse to approve the proposed premiums.

Concluding comments

The Bill will amend the HI Act and the PHI Act, to improve costs transparency for consumers and abolish product phoenixing in the private health insurance sector. These amendments reflect commitments made by the Labor Government both prior to the 2025 election and during the current term. The legislation has been welcomed by key stakeholders and is likely to be welcomed by consumers.