Explanatory Memorandum
(Circulated by authority of the Minister for Health, the Honourable Greg Hunt MP)Notes on Clauses - Private Health Insurance Legislation Amendment Bill 2018
Preliminary
Clause 1 - Short Title
This clause provides that the Bill, once enacted, may be cited as the Private Health Insurance Legislation Amendment Act 2018.
Clause 2 - Commencement
This clause sets out when the Private Health Insurance Legislation Amendment Bill 2018 and various provisions within it commence.
Schedules 1 and 2 commence on 1 April 2019, aligning with the new premium year and in the case of Schedule 1 the amendments apply in relation to 2018-19 and later income years.
Schedule 3 commences 1 July 2018
Schedule 4 commences the day after this Act receives Royal Assent
Schedule 5, parts 1 and 2 commences 1 April 2019 to align with the next premium year.
Schedule 5, part 3, commences 1 January 2019.
Schedule 5, part 4, commences the day after this Act receives Royal Assent.
Clause 3 - Schedule(s)
This clause provides that legislation that is specified in a Schedule to the Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms
Schedule 1 - Increasing maximum excess levels
Amendments in this schedule increase the current maximum voluntary excess levels that are permitted for a policy to exempt the holder from the Medicare levy surcharge, and involve amendments to associated provisions in taxation legislation (A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Act 1999 and Medicare Levy Act 1986) to apply the new maximum voluntary excesses levels which are specified in the amendments to the Private Health Insurance Act 2007 as set out below.
Private Health Insurance Act 2007
Item 1
This insertion after Part 2-4 sets out the increased maximum voluntary excess levels for complying health insurance products that relate to whether an individual is liable to pay the Medicare Levy Surcharge. The increased levels of voluntary excess that insurers can apply are: $750 in any 12 month period in relation to a policy which only one person is insured, or $1,500 in any 12 month period in relation to any other policy. This is outlined in Divisions 42 and 45.
Item 2
The item is an application provision which provides that the amendments made by item 1 of Schedule 1 apply in relation to the 2018-19 and later income years.
Schedule 2 - Age-based discounts for hospital cover
This Schedule will allow insurers to offer products which provide age-based discounted cover, from 1 April 2019. It will not be mandatory for insurers to offer discounted products.
The amendments alter the definition of "improper discrimination" in section 55-5 of the PHI Act to allow age-based discounts in accordance with Private Health Insurance (Complying Product) Rules (Complying Product Rules) made under section 66-5. It is intended that, in line with the announced policy, the Complying Product Rules will be amended to reflect the introduction of age-based discounts that insurers will be able to offer people aged 18 to 29. The aged-based discounts will apply in addition to the maximum discount percentage currently specified in the Complying Product Rules.
The Bill amends the Age Discrimination Act 2004 to allow for these discounts to be made available to younger people.
Items 1 and 2
Item 1 repeals paragraph 55-5(2)(c) and substitutes the repealed paragraph with a new paragraph which provides an additional exception to the improper discrimination provisions that prevent insurers discriminating against people on the basis of their age. The current exceptions provide for age based discrimination in the context of higher premiums associated with the application of Lifetime Health Cover loadings under Part 2-3 of the Act and higher premiums because a policy covers a dependent child non-student. The new exception only applies in relation to the new age-based discount arrangements to be established under new paragraph 66-5(3)(ea) inserted by item 2.
The parameters of age based discounts will be provided in the Private Health Insurance (Complying Product) Rules.
Age Discrimination Act 2004
Items 3 to 4
These items will extend the existing age discrimination exemption provided to the Private Health Insurance Act 2007 to new section 66-5(3)(ea) and the aged-based discounting provisions in the Private Health Insurance (Complying Product) Rules to permit insurers to offer an age based discount to encourage younger people to hold private health insurance.
Schedule 3 - Private Health Insurance Ombudsman's powers
This schedule amends the Ombudsman Act 1976 to empower the Private Health Insurance Ombudsman (PHIO) to conduct inspections and audits at the premises of a private health insurer or private health insurance broker and make recommendations relating to their activities. The PHIO will also be subject to new reporting requirements, including where the PHIO reports to the Minister on the use of the new inspection powers, it must also notify the affected provider unless doing so would, or could be reasonably expected to, prejudice the conduct of an investigation. The PHIO will also be required to report annually on the use of the new powers.
Ombudsman Act 1976
Item 1
This item inserts a new Division 3A and Subdivision A in Part IID of the Act which includes new subsection s20SA and 20SB. Subsection 20SA establishes the power to conduct inspections and audits at the premises of a private health insurer or private health insurer broker (broker). Subsection 20SB establishes new reporting requirements for the PHIO and powers to make recommendations to private health insurers or brokers following the exercise of powers under section 20SA.
Subsection 20SA empowers the PHIO to enter a premise that is: (i) a place occupied by a private health insurer or broker; or (ii) a place occupied by a person predominantly for the purpose of performing services for, or on behalf of private health insurer or broker; or (iii) a place where the documents or other records relating to a private health insurer or broker or the carrying on of health insurance business are kept.
In accordance, with subparagraph 20SA(b) the PHIO's powers at these premises are limited to inspecting any documents or other records to verify evidence provided in relation to a complaint made under Part IID, Division 3 of the Act. The PHIO may also take extracts from, or make copies of said document or other record. For the purposes of Division 3, the subject of a complaint may involve a private health insurer, a private health insurance provider or a health care provider.
Subsection 20SB provides for the PHIO to make recommendations to private health insurers or brokers after exercising its powers of inspection or audit (subsection 20SB(1). They may recommend (subsection 20SB(2)) any or all of the following:
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- to a private health insurer, that they take a specific course of action or make changes to its rules;
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- to a health care provider or private health insurance broker, that they take a specific course of action.
Subsection 20SB(3) provides that the PHIO may by written notice given to the person to whom the recommendation was made, or an officer of that person, require the person to report to the PHIO, before action is taken to give effect to the recommendation, on the action proposed to be taken. The notice must specify the period within which the report is to be given. This provision mirrors the existing functions and powers PHIO has in relation to investigations.
Subsections 20SB(4) and (5) establish new reporting obligations for the PHIO to report and make recommendations to the Minister for Health following an inspection or audit conducted under subsection 20SA. The PHIO may report to the Minister for Health on the outcome of the inspection or audit (including any recommendations made to a private health insurer or broker and any responses to those recommendations. The PHIO may also report to the Minister for Health on any recommendations to general changes in regulatory practice or industry practices relating to the kind of issues raised as a result of the exercise of those powers.
Item 2
This item inserts a new subsection 20TA which follows from section 20T. Section 20TA establishes new powers to enter premises and inspect documents during the conduct of investigations and apply in the context of investigations initiated by the PHIO at his or her initiative (own motion), in all other respects the scope and nature of these powers are intended to mirror the powers described at Item 1 for new subsection 20SA.
An investigation initiated at the PHIO's own motion may be an investigation to a private health insurer, a private health insurance broker or health care provider. The inspection powers established under 20TA do not apply in the case of investigations into health care providers.
Item 3
This item amends subsection 20ZG(6) in respect of the content of reports relating to the operations of the PHIO during a period. The content requirements of such reports are increased by the addition of new subparagraph 20ZG(6)(ca) requiring a summary of the exercise of powers under new section 20SA.
Item 4
This item inserts new subsection 20ZHA and 20ZHB. Subsection 20ZHA is inserted following section 20 ZH and applies in the context of inspection and audits at premises mention in paragraph 20SA(a) and investigations under section 20T at premises mentioned at paragraph 20TA(a). As a precondition before entry to such premises, subsection 20ZHA(2) establishes a requirement on the PHIO to show the PHIO's identity card to the occupier of the place or other suitable persons.
Subsection 20ZHB includes two offence provisions each with a penalty of maximum 30 penalty units in relation to new subsection 20SA and 20TA.
Subsection 20ZHB(1) creates an offence that applies where the occupier or person in charge of the premises (mentioned in paragraph 20SA(a)) does not provide the PHIO with reasonable facilities and assistance for the effective exercise of the PHIO powers under subparagraph 20SA(b).
Subsection 20ZHB(2) creates an offence that applies where the occupier or person in charge of the premises (mentioned in paragraph 20ST(a)) does not provide the PHIO with reasonable facilities and assistance for the effective exercise of the PHIO powers under subparagraph 20TA (b).
Item 5
This inserts a new subsection 20ZIA which follows section 20ZI. Under section 20ZIA the PHIO must issue an identity card to each officer who is authorised to exercise document inspection powers (subparagraph 20SA(b) or 20TA(b)) The card must be in the form approved by the PHIO (subsection 20ZIA(2)(a))and contain a recent photograph (subsection 20ZIA(2)(b)). An inspector must carry the card at all times when exercising their powers (subsection 20ZIA(3)).
It is an offence if a person who ceased to be an officer of the PHIO and does not return their identity card to PHIO within 14 days after ceasing to be an officer. This does not apply if the card was lost or destroyed (subsection 20ZIZ(4)).
Item 6
This item amends subsection 34(2C), which will enable for the PHIO to either generally, or as provided by the instrument of delegation or instrument in writing, delegate any and all of his or her powers or functions under the Act to a person. The amendment to subsection 34(2C) is intended to provide the PHIO with flexibility to delegate powers to suitable qualified officers, in cases where they do not come within the scope of persons described at section 31 of that Act. This amendment also ensures consistency with the other subject matter specific roles held by the Commonwealth Ombudsman.
Item 7
This item amends subsection 34(2C) to prevent the PHIO from delegating his/her responsibility to report to the Health Minister with respect to the requirements (at Item 1) established under new subsection 20SB(4).
Item 8
This item is an application provision which provides that new Division 3A applies in relation to a complaint made under Division 3 of Part IID of the Act on or after 1 July 2018.
Item 9
This item preserves the validity of any delegations in force that have been made under subsection 34(2C) immediately before 1 July 2018.
Schedule 4 - Transitional provisions relating to the treatment of certain health insurance policies
Some private health insurers impose benefit limitation periods (during which an insurer will pay minimum benefits for a treatment, and after which it will pay the full benefits available under the policy) of 12, 24, or 36 months for hospital treatment.
The Government recognises that benefit limitation periods can be an area of confusion for some private health insurance members. The Government is improving consumer transparency by removing the use of benefit limitation periods in private health insurance policies. This will assist in making private health insurance products easier to understand for consumers.
Benefit limitation periods have been applied under the current Act since 2007 and under previous Acts. The Bill ensures that consumers who have purchased benefit limitation period inclusive policies since 2007:
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- do not need to repay premium rebates they have received;
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- are not retrospectively liable for the Medicare Levy Surcharge; and
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- are not liable for Lifetime Health Cover loadings.
The amendments in this Schedule seek to ensure that people who purchased benefit limitation period inclusive private health insurance policies and insurers who sold those products between 1 April 2007 and 30 June 2018 are effectively in the same legal position, that they would have been in if the products had complied with the Act.
The amendments will effectively deem benefit limitation period inclusive policies to be compliant for the period from 1 April 2007 until 30 June 2018 for the purposes of the Act and all other Commonwealth primary or secondary legislation (other than some specified enforcement provisions). It also waives any associated debts or repayments owed to the Commonwealth by insurers or policy-holders.
The amendments validates benefit limitation period inclusive policies covering psychiatric treatment until 31 March 2018 is in line with the Government's commitment to provide better access to psychiatric treatment under private health insurance from 1 April 2018.
The amendments will operate retrospectively from 1 April 2007 and until 30 June 2018 by which time insurers are expected to have updated their rules to remove benefit limitation period inclusive polices. The Government will ensure that benefit limitation periods will no longer be applied to any treatments under any hospital policy from 1 July 2018.
Item 1 - Simplified outline of this Schedule
This item provides an outline. This includes that:
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- an irregular health insurance policy shall be treated as a complying health insurance policy from 1 April 2007 to 30 June 2018;
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- that an irregular health insurance policy is a type of health insurance policy that includes one or more benefit limitation periods inconsistent with the waiting period requirements under Division 75 and portability requirements under Division 78 of the Private Health Insurance Act 2007;
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- where an amount has been paid by the Commonwealth to a private health insurer is otherwise to be repaid because of the irregular health insurance policy that repayment is waived by the Commonwealth;
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- where a person was not entitled to an incentive payment and that amount is to be repaid because of the irregular health insurance policy that repayment is waived by the Commonwealth.
Item 2 - Definitions
This clause provides for a number of definitions, including:
benefit limitation periods has the meaning generally accepted within the health insurance industry. This is to allow for all forms of benefit limitation periods to be covered by the legislation, noting that across the industry the definition may vary significantly.
Commonly (but not definitively) a benefit limitation period is a period (often of 12 or 24 months, but sometimes longer) during which a private health insurer will pay minimum benefits for a treatment, and after which it will pay the full benefits available under the policy.
This definition is only for the purpose of giving effect to the transitional arrangement for validating irregular health insurance policies. The definition is not intended to apply in any other context.
hospital substitute treatment has the same meaning as in the Private Health Insurance Act 2007.
hospital treatment has the same meaning as in the Private Health Insurance Act 2007.
irregular health insurance policy has the meaning given by item 3.
private health insurer has been defined to ensure that any insurer that may have been registered at any time between 1 April 2007 and 30 June 2018 are covered. As such a private health insurer means any of the following:
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- an insurer that was a registered health benefits organization under the National Health Act 1953 as it applied before the Private Health Insurance Act 2007 came into effect;
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- an insurer that was registered under the Private Health Insurance Act 2007 as it applied before the Private Health Insurance (Prudential Supervision) Act 2015 came into effect; and
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- an insurer that is or was registered under the Private Health Insurance (Prudential Supervision) Act 2015.
Item 3 - Irregular health insurance policy
Subitem 3(1)
This subitem defines an irregular health insurance policy as an insurance policy at a particular time from 1 April 2007 until 30 June 2018 that:
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- includes one or more benefit limitation periods; and
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- is not a complying health insurance policy (within the meaning of section 63-10 of the Private Health Insurance Act 2007); and
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- would have been a complying health insurance policy (within the meaning of section 63-10 of the Private Health Insurance Act 2007), if Division 75 and Division 78 of the Private Health Insurance Act 2007 did not prevent the policy from including those benefit limitation periods.
The definition operates to confine the operation of the legislation to health insurance policies that had a benefit limitation period inconsistent with waiting period requirements in Division 75 of the Private Health Insurance Act 2007 and the portability requirements in Division 78 of the Private Health Insurance Act 2007.
The definition covers the period from the commencement of the Private Health Insurance Act 2007 on 1 April 2007 through until 30 June 2018, after which time policies with benefit limitations periods in excess of Divisions 75 and 78 will be treated as unlawful. Insurer will have until 30 June 2018 to change their rules to remove benefit limitation periods.
Subitem 3(2)
This subitem provides that subitem (1) has effect subject to subitem (3).
Subitem 3(3)
This subitem provides that for period 1 April 2018 to 30 June 2018 an irregular health insurance policy is not an insurance policy that included one or more benefit limitation periods that relate to hospital treatment or hospital-substitute treatment for psychiatric care.
This provision operates to ensure that benefit limitation periods applying to psychiatric treatment are removed from 31 March 2018, 2018 is in line with the Government's commitment to provide better access to psychiatric treatment under private health insurance from 1 April 2018.
Item 4 - Irregular health insurance policy to be treated as a complying health insurance policy
Subitem 4(1)
This subitem provides that for the purposes of:
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- the Private Health Insurance Act 2007 (including associated secondary legislation)(but subject to sub-clauses (2) and (3)); and
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- any other law of the Commonwealth (including primary and/or secondary legislation)
an irregular health insurance policy is deemed to have been a complying health insurance policy, in accordance with section 63-10 of the Private Health Insurance Act 2007, during the period 1 April 2007 to 30 June 2018.
Commonwealth Acts covered by the operation of this clause include (but are not limited to):
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- the Medicare Levy Act 1986
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- the A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999
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- the Dental Benefits Act 2008
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- the Veteran's Entitlements Act 1986
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- the Private Health Insurance (Complaints Levy) Act 1995
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- the Health Insurance Act 1973
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- the National Health Act 1953, and
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- the Income Tax Assessment Act 1936.
This operates to treat irregular policies as complying health insurance policies across all Commonwealth statutes between 1 April 2007 and 30 June 2018.
This means that a person who purchased an irregular health insurance policy will be exempt from the Medicare Levy Surcharge and from any Lifetime Health Cover loadings that they might have faced because they had not purchased a complying health insurance policy.
Subitems 4(2) and (3)
These subitems provide that subitem 4(1) does not apply in relation to the enforcement provisions of the Private Health Insurance Act 2007 set out in Division 84 and Chapter 5.
This means that subitem 4(1) does not have the effect that a private health insurer will not have committed an offence under section 84-1 by offering an irregular health insurance policy, and it will remain open to the Minister for Health to seek remedies in the Federal Court under section 84-15 of the Private Health Insurance Act 2007.
Subitem 4(2) also provides that subitem 4(1) does not apply in relation to the jurisdiction or power conferred on the Federal Court by the application of Division 84 of the Private Health Insurance Act 2007.
Subitem 4(3) provides that subitem 4(1) does not apply for the purposes of any enforcement action taken under Chapter 5 of the Private Health Insurance Act 2007, and does not limit the exercise by the Federal Court of its jurisdiction and powers under Chapter 5.
Subitem 4(4)
This sub-clause provides that subitem 4(1) does not preclude any common law action that (apart from that sub-clause) could have been brought by the holder of an irregular health insurance policy against a private health insurer.
Subitem 4(5)
This sub-clause provides that this clause has effect subject to the debt waiver provisions in items 5 and 6.
Item 5 - Waiver - reimbursement of private health insurer
This item operates to waive any debts arising from payments to an insurer under the Premium Reduction Scheme under Subdivision 279-A of the Private Health Insurance Act 2007 that ought not have been made because the policy was an irregular health insurance policy.
Clause 6 - Waiver - incentive payment
This item operates to waive any debts arising from payments to a person under the Private Health Insurance Incentives Scheme under repealed Division 26 of the Private Health Insurance Act 2007 that ought not have been made because the policy was an irregular health insurance policy.
Schedule 5 - Miscellaneous
Private Health Insurance Act 2007
Part 1 - Benefits for travel and accommodation
These amendments will allow insurers from 1 April 2019 to offer travel and accommodation benefits under hospital treatment cover. Currently, insurers can only offer travel and accommodation benefits under general treatment policies. Travel and accommodation benefits under hospital treatment are eligible for risk equalisation which provides an incentive for insurers to offer these benefits. Travel and accommodation benefits offered under general treatment cover will remain not eligible for risk equalisation. Travel and accommodation benefits under general treatment cover can be capped by insurers but those under hospital treatment cannot be capped.
It will not be mandatory for private health insurers to offer travel and accommodation benefits under either hospital or general treatment products.
Item 1
This item repeals paragraph 55-5(2)(d) and substitutes a new paragraph to extend the exceptions to the improper discrimination provisions that prevent insurers discriminating against people on the basis of where a person lives to new subsection 66-25 inserted by item 2.
Item 2
This item inserts a new subsection 66-25 providing that an insurer may choose to pay different amounts of benefits under a hospital treatment or general treatment policy based on the distance between the person's principal place of residence and the facility where the treatment is provided.
Items 3 to 4
These items amend the meaning of 'hospital treatment' provided in subsection 121-5.
Item 3 inserts new subsection 121-5(2A) which states that hospital treatment also includes benefits for travel or accommodation relating to treatment covered by the existing subsections (1) or (2). Travel or accommodation benefits paid in respect of treatment covered under a hospital treatment policy will therefore be eligible for risk equalisation.
Item 4 amends subsection 121-5(4) by inserting a reference to new subsection 121-5(2A). This provision enables the Minister to exclude specified travel or accommodation from the definition of hospital treatment in the Private Health Insurance (Health Insurance Business) Rules.
Items 5 to 6
These items amend the meaning of 'general treatment' provided in subsection 121-10.
Item 5 inserts new subsection 121-10(2A) which states that general treatment can also include benefits for travel or accommodation including for those related to hospital treatment. General treatment travel or accommodation benefits are not eligible for risk equalisation as provided in the Private Health Insurance (Risk Equalisation Policy) Rules.
Item 6 amends subsection 121-10(3) by inserting a reference to new subsection 121-10(2). This provision enables the Minister to exclude specified travel or accommodation from the definition of general treatment in the Private Health Insurance (Health Insurance Business) Rules.
Part 2 - Information requirements
A 'private health information statement' will replace the current 'standard information statement' as the required method by which an insurer must provide information to consumers.
The Standard Information Statements will be discontinued from 1 April 2019 and insurers will be required to maintain up to date information about complying health insurance products in the form of a 'private health information statement', the requirements for which will be set out in the Private Health Insurance (Complying Product) Rules.
Under existing arrangements, private health insurers are required to provide paper-based standard information statements about complying health insurance products. The 'private health information statement' is intended to be technology neutral, which means that insurers have greater flexibility to communicate product information in accordance with consumers' preferences (subject to any applicable requirements specified in the Private Health Insurance (Complying Product) Rules.
These amendments do not alter existing policy in regards to an insurer's obligations to provide information to consumers about complying health insurance products.
Item 7 to 30
These items substitute references to 'standard information statement' with 'private health information statement' in all relevant provisions within Divisions 93 and 96 and the Dictionary at Schedule 1 of the Act
Part 3 - Benefit requirements according to class of hospital
Under existing arrangements, an industry-based Second Tier Advisory Committee is responsible for receiving applications from private hospitals and determining their eligibility to receive second-tier default benefits provided in schedule 5 of the Private Health Insurance (Benefit Requirements) Rules.
These amendments establish a legislative framework for the Minister to assess and determine whether or not to include a private hospital in a class of hospitals eligible for second-tier default benefits.
Under the new arrangements, a person can apply to the Minister for a hospital to be included in a class set out in the Private Health Insurance (Health Insurance Business) Rules. The application must be accompanied by the application fee set out in the Private Health Insurance (Health Insurance Business) Rules.
The Minister must consider the application to determine whether a hospital satisfies the assessment criteria set out in the Private Health Insurance (Health Insurance Business) Rules, and notify the applicant accordingly. A negative decision may be reviewed by the Administrative Appeals Tribunal.
If a hospital satisfies the assessment criteria, it is included in a class for the period determined by the Minister. If the Minister considers that the hospital has ceased to meet the assessment criteria, she or he may revoke its inclusion in the class. This decision may be reviewed by the Administrative Appeals Tribunal.
Item 31
This item alters existing arrangements by inserting new sections 121-8 to 121-8D into the Private Health Insurance Act 2007.
Under the new arrangements, a person will make an application to the Minister for a hospital to be included in a class set out in the Private Health Insurance (Health Insurance Business) Rules (new subsection 121-8(1)) and the application must be in the approved form (new subsection 121-8(2)(a) and accompanied by the relevant application fee (new subsection 121-8(2)(b)) imposed under the Private Health Insurance (Health Insurance Business) Rules.
The purpose of new subsection 121-8A is to establish (i) a time limit for the Minister to decide on an application and, (ii) obligations to notify applicants about the outcome of the application.
An application made in accordance with the requirements in new subsection 121-8(1) is considered by the Minister in order to determine whether a hospital satisfies the assessment criteria set out in the Private Health Insurance (Health Insurance Business) Rules (new subsection 121-8A(1)). If a hospital satisfies the assessment criteria, the Minister must within 60 days after the day the application is made, approve the application and notify the hospital, in writing, of:
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- the hospital's inclusion in a class set out in the Rules; and
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- the day that the hospital is included in that class and the day that the hospital's inclusion in that class ends.
If the Minister decides not to approve an application made in accordance with new subsection 121-8(1) because the hospital does not satisfy the assessment criteria, the Minister must within 60 days after the day the application is made, notify the hospital, in writing, of that fact (subparagraph 121-8A(3)(a)) and provide reasons for the decision (subparagraph 121-8A(3)(b)).
A private hospital included in a class as a result of an application approved under new subsection 121-8A may be included in that class for a finite period of time under new subsection 121-8B. This period commences on the day specified in the notice referred to in subparagraph 121-8A(2)(b)(ii) and expires on the day specified in that notice, unless it is revoked earlier.
Subsection 121-8C enables the Minister to revoke the inclusion of a private hospital from a class set out in the Private Health Insurance (Health Insurance Business) Rules, if the Minister considers that the hospital ceases to satisfy the assessment criteria set out in the Rules (for example, the hospital may have failed to re-new or lost its accreditation status as required under the assessment criteria).
The purpose of subsection 121-8D is to enable Private Health Insurance (Health Insurance Business) Rules to be made for the following purposes:
- (a)
- set out one or more classes of hospital for the purposes of Part 4-2 (Health Insurance Business) and Division 72 (Benefit requirements for policies that cover hospital treatment );
- (b)
- impose an application fee for the purposes of section 121-8;
- (c)
- set out assessment criteria for including a hospital in a particular class; and
- (d)
- set out matters of a transitional nature relating to the current arrangements for hospitals and the new application process provided for by section 121-8.
Item 32
This item amends the table at section 328-5 which provides a list of decisions that may be reviewable by the Administrative Appeals Tribunal. This item extends the list to include decisions made under new section 121-8A (where an application is not approved) and new section 121-8C (where an approval is subsequently revoked).
Part 4 - Closed and terminated products
These amendments clarify that an insurer can not only close a product (by making it no longer available to new policy-holders), but can also terminate a product nationally or in a particular state by ceasing to make it available to any policy-holder.
Item 33
This item amends the community rating requirements in respect of closed and terminated products. Subsection 55-10 is amended to provide that the community rating principle does not prevent an insurer from: closing a product so that the product is no longer made available to new policy-holders; or terminating a product so that the product will no longer be available to anyone, even people who currently hold the product.
Item 34 and 35
Item 34 amends subsection 78-1(1) to include a reference to new subparagraph 78-1(5A) which is additional portability requirements included at item 35.
Item 35 amends the portability requirements by inserting new subparagraph 78-1(5A) which follows subsection 78-1(5). The new subparagraph applies in the context of transfers initiated by insurers in respect of people closed and terminating products. Subparagraph 78-1(5A) establishes new obligations on insurers to adequately inform insured adults of the planned termination of a product and the associated product transfer. Insurers are required to provide written information to insured adults in accordance with the requirements set out in the Private Health Insurance (Complying Product) Rules. These obligations are intended to serve as safeguards to ensure people have continuity of cover and do not need to re-serve waiting periods for hospital treatment.