15th Mar 2012, 6:08 PM – Senate Fairer Private Health Insurance Incentives Bill 2012 - In Committee - Annual report by Productivity Commission

This division relates to the Policy For reducing the private health insurance rebate.

The majority voted against an amendment introduced by Independent Senator Nick Xenophon, which means that the amendment was unsuccessful.

The amendment was the following:

(1) Schedule 1, page 16 (after line 11), after item 17, insert:

17A Section 169-5 (heading)

Repeal the heading, substitute:

169-5 Information to be given annually to the Council and the Productivity Commission

17B After subsection 169-5(1)

Insert:

(1A) A private health insurer must, within 3 months after the end of each financial year, or within such further time as the Productivity Commission allows, give to the Productivity Commission such information (including financial accounts and statements) in respect of that year as the Productivity Commission requires to be given for use in preparing the report referred to in section 333-1A.

17C Subsection 169-5(2)

Omit "such accounts or statements", substitute "accounts or statements referred to in subsection (1) or (1A)".

(2) Schedule 1, page 20 (after line 9), after item 21, insert:

21A Before section 333-1

Insert:

333-1A Annual report by Productivity Commission

(1) The Productivity Commission must, as soon as practicable after 30 September in each year, give the Minister a report, for presentation to the Parliament, relating to changes in the composition of the persons insured under insurance policies issued by each private health insurer during the financial year ending on 30 June in that year.

Note: See also section 34C of the Acts Interpretation Act 1901, which contains extra rules about periodic reports.

(2) The report must include:

(a) information about the number of persons who have ceased to be insured, and the number of persons who have downgraded their level of insurance, under insurance policies that *cover *hospital treatment during that financial year; and

(b) information about the number of persons who have ceased to be insured, and the number of persons who have downgraded their level of insurance, under insurance policies that cover *general treatment during that financial year; and

(c) information about the age and income tax bracket of those persons who have ceased to be insured, or who have downgraded their level of insurance, under insurance policies that cover hospital treatment or general treatment during that financial year; and

(d) any recommendations from the Productivity Commission for addressing:

(i) reductions in the number of persons insured under insurance policies that cover hospital treatment or general treatment; and

(ii) people electing to downgrade their level of insurance under insurance policies that cover hospital treatment or general treatment.

(3) However, the report must not include any information that would enable an individual to be identified.

(4) The Minister must publish on the Department's website the report, and a written response to the report, within 60 days after the first day on which the report is laid before a House of the Parliament in accordance with section 34C of the Acts Interpretation Act 1901.

Senator Xenophon said that this amendment would have required the Productivity Commission to report annually on the composition of private health funds. He explained that this is important because it ensures that the government can learn "from an independent source just how many people drop out of private health insurance or reduce their cover as a result of means-testing the 30 per cent rebate".(Read Senator Xenophon's full explanation here. )

Background to the bill

The bill was introduced along with the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012. These bills were introduced as a package to reduce the private health insurance rebate and increase the Medicare levy surcharge for certain taxpayers. To this end, the bills:

• create three private health insurance tiers with different levels of private health insurance rebate to reduce the amount of rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives Bill 2012 in its bills digest.

)

• increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 in its bills digest.

)

• increase the rate of Medicare levy surcharge for taxpayers who do not have complying health insurance and whose income (including reportable fringe benefits) for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012 in its bills digest.)