Explanatory Memorandum
(Circulated by authority of the Minister for Health and Ageing, the Honourable Tony Abbott MP)INTRODUCTION
This package of Bills will provide a legislative framework for important reforms to private health insurance announced by the Government on 26 April 2006 to enhance choice, certainty and the value of private health care. The changes, which will come into effect on 1 April next year, will support improved information and services for consumers and greater competition in the insurance sector. They will also bring much clearer and simpler regulation for health insurers and service providers.
This package is the most significant change to health insurance legislation in more than a decade. It will allow the private health sector to develop innovative products that reflect contemporary clinical practice, and support greater choice in private health care for consumers.
The legislation complements other initiatives implemented in recent years and reaffirms the Government's long-standing commitment to choice in health care. These initiatives include: the 30% Rebate; the increased rebate for older Australians; Lifetime Health Cover; and the No Gap and Known Gap arrangements. These measures have helped ensure a viable and sustainable private health sector, while also improving the capacity of the public hospital system to deliver services to the Australian community.
This package of Bills does not detract in any way from people's entitlements under Medicare, and will not result in a two-tier health care system. The Government continues to be strongly committed to Medicare.
Specifically, the Bills are intended to:
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- clarify and simplify the legislative regime for private health insurance so that organisations can offer private health insurance products with the minimum compliance requirements necessary to achieve the Government's policy objectives and protect the interests of consumers;
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- allow private health insurance to provide and include in risk equalisation arrangements benefits for outpatient and out-of-hospital services, including chronic care management for conditions such as diabetes and asthma, and disease prevention programs;
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- require insurers to provide standard product information to help people compare policies and to understand their entitlements;
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- eliminate Lifetime Health Cover penalties for fund members who have retained their hospital cover for more than ten years continuously;
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- provide for the transition from the current regulatory regime;
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- repeal redundant parts of the National Health Act 1953 and amend a range of other Acts to reflect the new regime;
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- impose application and listing fees on the sponsors of prostheses; and
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- amend the Acts imposing levies on private health insurers.