House of Representatives

Private Health Insurance Bill 2006

Private Health Insurance Act 2007

Private Health Insurance (Transitional Provisions and Consequential Amendments) Bill 2006

Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007

Private Health Insurance (Prostheses Application and Listing Fees) Bill 2006

Private Health Insurance (Prostheses Application and Listing Fees) Act 2007

Private Health Insurance (Collapsed Organization Levy) Amendment Bill 2006

Private Health Insurance (Collapsed Organization Levy) Amendment Act 2007

Private Health Insurance Complaints Levy Amendment Bill 2006

Private Health Insurance Complaints Levy Amendment Act 2007

Private Health Insurance (Council Administration Levy) Amendment Bill 2006

Private Health Insurance (Council Administration Levy) Amendment Act 2007

Private Health Insurance (Reinsurance Trust Fund Levy) Amendment Bill 2006

Private Health Insurance (Reinsurance Trust Fund Levy) Amendment Act 2007

Explanatory Memorandum

(Circulated by authority of the Minister for Health and Ageing, the Honourable Tony Abbott MP)

PRIVATE HEALTH INSURANCE (TRANSITIONAL PROVISIONS AND CONSEQUENTIAL AMENDMENTS) BILL 2006

This Bill (the Transitional and Consequential Bill) provides for the transition from the current regulatory regime to the new Private Health Insurance Bill. It also provides for the repeal of redundant Parts of the National Health Act 1953 and Health Insurance Act 1973 and makes amendments to a range of other Acts, mainly to reflect changes in the definitions of insurers and the products they offer.

PART 1 - PRELIMINARY

Clause 1 Short title

This sets out the short title of the Bill

Clause 2 Commencement

This clause sets out when the Bill and various provisions within it commence.

Clause 3 Schedule(s )

This clause specifies that each Act that is specified in a Schedule to this Bill is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Bill has effect according to its terms.

Clause 4 Definitions

This clause defines terms used in the Bill. In particular, new Act means the proposed Private Health Insurance Act and commencement time means the time when the new Act commences.

PART 2 - TRANSITIONAL PROVISIONS RELATING TO CHAPTER 2 OF THE NEW ACT

Division 1 - Premiums reduction and incentive payment schemes

This Division, together with Schedule 3, allows the Private Health Insurance Incentives Act 1998 (the 1998 Act) to apply with amendments under this Part until 30 June 2007 in relation to application for registration, and until 30 June 2008 in relation to payments of claims. Part 2-2 of the new Act will begin to apply from 1 July 2007.

Clause 5 Application of Part 2-2 of the new Act

This clause provides that Part 2-2 of the new Act applies to financial years beginning on or after 1 July 2007.

Clause 6 Application of the Private Health Insurance Incentives Act 1998 from the commencement time to repeal

This clause provides for the ongoing operation of the 1998 Act until 30 June 2008.

Subclause (1 ) provides for how references to terms in the 1998 Act are to be understood from 1 April 2007 until 30 June 2008.

Subclause (2 ) provides that the changed meanings of terms under subclause (1) can continue after the repeal of the 1998 Act on 30 June 2008 because of the operation of this Part or section 8 of the Acts Interpretation Act 1901 .

Clause 7 Continued application of section 11-50 of the Private Health Insurance Incentives Act 1998

Under section 11-50 of the 1998 Act insurers must retain applications for a period of 5 years. Subclause (1 ) requires insurers to continue to retain the applications for this period despite the repeal of the 1998 Act. Subclause (2 ) provides that the Medicare Australia CEO may continue to approve the form under which applications can be kept.

Division 2 - Lifetime health cover

Clause 8 Application of Part 2-3 of the new Act

This clause provides that premiums payable for hospital cover that are increased under lifetime health cover provisions in the National Health Act 1953 before 1 April 2007 continue to apply until a new premium amount is calculated under the new Act.

Clause 9 Calculating 10 years' continuous cover under section 34-10 of the new Act

This clause allows a person's permitted days without cover and periods when they are taken to have hospital cover under the National Health Act 1953 to be considered in working out periods of 10 years' continuous cover under clause 34-10 of the new Act.

PART 3 - TRANSITIONAL PROVISIONS RELATING TO COMPLYING HEALTH INSURANCE PRODUCTS

Clause 10 Status of existing applicable benefits arrangements and tables of ancillary benefits

Under the new Act insurers must offer complying health insurance products instead of applicable benefits arrangements and tables of ancillary benefits under the National Health Act 1953 . Subclauses (1 ) and ( 2 ) provide that any applicable benefits arrangement or table of ancillary benefits in place before the commencement of the new Act is taken to be a complying health insurance product for the period until 30 June 2008. This allows insurers a transition period to ensure that their products comply with the new Act.

Subclause (3 ) provides that if the premiums, treatments or benefits of a product subject to this transition are changed in any way the new product must meet the complying health insurance product requirements under the new Act at the time of the change.

Clause 11 Premium requirement

This clause provides that if:

·
an applicable benefits arrangements or a table of ancillary benefits under the National Health Act 1953 is taken to be a complying health insurance product under clause 10 of this Bill; and
·
the treatments or benefits of the product change in such a way it needs to comply with the new Act to be a complying health insurance product;

it is taken to comply if it meets all the requirements for a complying health insurance product except the requirement in section 66-5 for premiums to be approved by the Minister, as long as the premium does not change.

Clause 12 Benefit requirements : listing of no gap and gap permitted prostheses

This clause provides that if a prosthesis was a no gap prosthesis or a gap permitted prosthesis for the purpose of the National Health Act 1953 before the commencement time the Minister may list the prosthesis in the Private Health Insurance (Prostheses) Rules under the new Act without an application being made under subsection 72-10(2) of the new Act. The person who was the sponsor of the prosthesis for the purposes of the National Health Act 1953 is taken to be responsible for paying the ongoing listing fee under section 72-15 of the new Act.

Clause 13 Waiting periods

This clause ensures that people who have served all or part of their waiting period for an applicable benefits arrangement or table of ancillary benefits under the National Health Act 1953 do not have to serve that period or part of the period again if their policy is taken to be a complying health insurance product under the new Act.

Clause 14 Quality assurance requirements

This clause provides that quality assurance requirements under the new Act do not apply until July 2008. This delayed commencement is intended to allow sufficient time for the Government to consult with insurers and service providers on the Rules to be made to give effect to the requirements.

PART 4 - TRANSITIONAL PROVISIONS RELATING TO CHAPTER 4 OF THE NEW ACT

Division 1 - Carrying on health insurance business

Clause 15 Hospitals

This clause provides that despite the repeal of sections of the Health Insurance Act 1973 and the National Health Act 1953 , facilities which were declared as hospitals under these Acts are taken to be public or private hospitals under the new Act until 1 July 2008. This provides a period of 15 months for hospitals to make an application to the Minister to be declared a hospital under the new Act. The Minister's powers to revoke declarations under the previous Acts are maintained.

Clause 16 Hospital treatment - outreach services

The definition of hospital treatment under the new Act includes services provided at a location other than a hospital, as long as it is provided or arranged with the direct involvement of a hospital. Under section 5D of the National Health Act 1953 services of this nature could be determined by the Minister to be an outreach service.

This clause provides for outreach services determined under section 5D to be treated as hospital treatment under the new Act until 1 July 2008. The Minister's power to revoke a determination under section 5D of the National Health Act 1953 will remain despite the repeal of this section.

Clause 17 Employee health benefits schemes

This clause allows arrangements declared as not being employee health benefits schemes under section 67 of the National Health Act 1953 to continue under the new Act, but empowers the Minister to revoke the declaration even though section 67 has been repealed.

Division 2 - Registration

Clause 18 Registered organizations taken to be private health insurers

This clause allows organisations registered as registered organizations under the National Health Act 1953 to be taken as private health insurers under the new Act until 1 July 2008. This clause ceases to apply if an organisation registers under Part 4-3 of the new Act. This provides a significant period of time for existing insurers to meet registration requirements under the new Act, including the requirement under section 126-10 to be a constitutional corporation registered under the Corporations Act 2001 .

Subclause (3 ) clarifies that an organisation taken to be a private health insurer under subclause (1) can be deregistered by the Minister under the new Act.

Clause 19 Registered organizations established for profit

This clause allows a registered organization conducted for profit under the National Health Act 1953 to be taken to be registered as a for profit insurer under the new Act. This does not prevent the for profit insurer from ceasing to be registered as such under the new Act.

Clause 20 Restricted membership organizations

This clause allows an existing restricted membership organization registered under the National Health Act 1953 to be taken to be registered as a restricted access insurer under the new Act. This does not prevent the restricted access insurer from ceasing to be registered as such under the new Act.

Division 3 - Health benefits funds

Clause 21 Existing health benefits funds

This clause clarifies that the health benefits fund conducted by a registered organization under the National Health Act 1953 that existed before the commencement of the new Act, including all of its assets and liabilities, is taken to be a health benefits fund under the new Act.

Clause 22 Applications for approval of mergers

This clause provides that undecided applications for mergers made under the National Health Act 1953 are taken to be applications under section 146-5 of the new Act. This ensures that applicant organisations do not need to reapply because of the commencement of the new Act.

PART 5 - TRANSITIONAL PROVISIONS RELATING TO CHAPTER 5 OF THE NEW ACT

Division 1 - General enforcement methods

Clause 23 Continued application of Division 5 of Part VI of the National Health Act 1953

This clause provides that Division 5 of Part VI of the National Health Act 1953 (the old enforcement provisions) continue to apply despite the repeal of that Division in respect of any breach of that Act and any enforcement action initiated under that Act.

Any direction given or undertaking made under the old enforcement provisions in force at the time the new Act commences continue and may be enforced under the old enforcement provisions.

Division 2 - Enforcement of health benefits fund requirements

Clause 24 Investigations into affairs of registered organizations

Subclause (1 ) provides that if:

·
the Minister had appointed an inspector under section 82R of the National Health Act 1953 ; or
·
the Council had appointed an inspector under paragraph 82R(1)(c) of the National Health Act 1953 (because of an audit report on compliance with the Private Health Insurance Incentives Act 1998 ); and
·
the investigation is not complete at the commencement of the new Act

Then the investigation is to be completed under Part VIA of the National Health Act 1953 as if that Part had not been repealed.

Subclause (2 ) provides that if:

·
the Council had appointed an inspector under section 82R (other than under paragraph 82R(1)(c) of the National Health Act 1953 ; and
·
the investigation is not complete at the commencement of the new Act

Then Division 214 of the new Act applies.

Clause 25 Administration of funds and registered organizations

This clause allows an appointed administrator to continue to perform their duties under the National Health Act 1953 if they were appointed before the commencement of the new Act and the administration is not completed. The functions and powers of the administrator and the Council in relation to the administration continue under Part VIA of the National Health Act 1953 as if that Part had not been repealed.

Clause 26 Winding up of funds and registered organizations

This clause ensures that any administration related to the winding up of a fund or registered organization made under a Federal Court order or Council approval under Part VIA of the National Health Act 1953 , which has not been completed before the commencement of the new Act, can continue under that Part as if that Part had not been repealed.

PART 6 - TRANSITIONAL PROVISIONS RELATING TO CHAPTER 6 OF THE NEW ACT

Division 1 - Private Health Insurance Ombudsman Subdivision A Preliminary

Clause 27 Definitions

This clause defines terms used in the Part. In particular:

·
new Ombudsman means the Statutory Agency of the PHIO established by Part 6-2 of the new Act;
·
old Ombudsman means the corporation known as the PHIO established under the National Health Act 1953 .

Subdivision B Assets, liabilities and legal proceedings

Clause 28 Vesting of assets of old Ombudsman and

Clause 29 Vesting of liabilities of old Ombudsman

These clauses provide for the vesting of the assets and liabilities of the old Ombudsman immediately before the commencement time in the Commonwealth.

Clause 30 Certificates relating to vesting of land

This clause allows a land registration official of a State or Territory to register a transfer of land from the old Ombudsman to the Commonwealth on the basis of a certificate signed by the Minister.

Clause 31 Certificates relating to vesting of assets other than land

This clause allows an assets registration official of a State or Territory to register a transfer of assets other than land from the old Ombudsman to the Commonwealth on the basis of a certificate signed by the Minister.

Clause 32 Substitution of Commonwealth as a party to pending proceedings

This clause provides that if the old Ombudsman was a party to proceedings under way in any court or tribunal before the commencement time, the Commonwealth is substituted as a party to the proceedings.

Clause 33 Transfer of custody of old Ombudsman records

This clause provides that any records and documents held by the old Ombudsman are transferred into the custody of the new Ombudsman at the commencement time.

Subdivision C Reference to, and things done by or in relation to, old Ombudsman

Clause 34 References in instruments

Subclauses (1 ) and ( 2 ) provide that an instrument in force before the commencement time that refers to the old Ombudsman has effect from commencement time as if it referred to the new Ombudsman, unless the instrument relates to assets and liabilities under clauses 27 or 28, in which case the reference is taken as a reference to the Commonwealth.

Subclause (3 ) provides that an instrument in force before the commencement time that refers to a member of the staff of the old Ombudsman has effect from commencement time as if it referred to a member of the staff of the new Ombudsman under section 253-45 of the new Act.

Clauses (4 ) and ( 5 ) allow the Minister, by writing other than legislative instrument, to declare that:

·
a reference under subclause (1) to the new Ombudsman is a reference to the Commonwealth;
·
a reference under subclause (2) to the Commonwealth is a reference to the new Ombudsman;
·
a reference under subclause (3) to a member of staff of the new Ombudsman is a reference to the new Ombudsman.

Subclause (6 ) allows the Private Health Insurance (Transition) Rules to provide that an instrument containing a reference specified in paragraph (4)(a) has effect as if the reference were a reference to somebody other than the Commonwealth, the new Ombudsman, or a member of the staff of the new Ombudsman.

Clause 35 Operation of laws

Subclause (1 ) provides that a thing done by the old Ombudsman before the commencement time under any law of the Commonwealth is taken to have been done by the new Ombudsman.

Subclause (2 ) provides that a thing done by the old Ombudsman before the commencement time under the National Health Act 1953 is taken to have been done under the corresponding provision of the new Act (without changing the time it was actually done).

Subclause (3 ) provides that the new Ombudsman may handle a complaint made to the old Ombudsman before the commencement time as if it had been made under the new Act, even if it could not be made under the new Act.

Subclause (4 ) provides that the new Ombudsman may handle complaints under the new Act that arose under the Private Health Insurance Incentives Act 1998 , even though that Act has been repealed.

Subclauses (5 ) and ( 6 ) allow the Minister, by writing other than legislative instrument, to determine that subclause (1) either does not apply, or applies as if the reference to the new Ombudsman were a reference to the Commonwealth.

Subclause (7 ) allows the Private Health Insurance (Transition) Rules to provide for a thing specified in a determination under paragraph (5)(a) to be taken to have been done by somebody other than the Commonwealth or the new Ombudsman.

Subclause (8 ) explains, for the avoidance of doubt among the sceptical, that doing a thing includes making an instrument.

Clause 36 Financial statements and other reporting requirements

Subclause (1 ) provides that the new Ombudsman must provide a report required by law of the old Ombudsman for a period that ended after the commencement time. Subclause (2 ) provides that if the new Ombudsman is required to produce a report under subclause (1) and a similar report for the remainder of the period, the requirement can be met with one report. However, if the Ombudsman does not choose to do this subclause (3 ) requires the report under subclause (1) to be provided no more than four months after the commencement time.

Subclause (4 ) provides that if the old Ombudsman had not met a reporting requirement the new Ombudsman must do so.

Subdivision D Private Health Insurance Ombudsman and staff

Clause 37 Private Health Insurance Ombudsman

This clause provides that the Private Health Insurance Ombudsman holding office under section 82ZR of the National Health Act 1953 is taken to have been appointed under section 253-1 of the new Act for the balance of his or her period of appointment on the same terms and conditions as the original appointment.

Clause 38 Transfer of staff

Subclause (1 ) provides that staff that transfer from the old to the new Ombudsman and were entitled to long-service leave entitlements should have their entitlements and time served for that purpose transferred in their entirety.

Subclauses (2 ) and ( 3 ) allow regulations to be made for transitional matters related to transferring staff from the old to the new Ombudsman, including staffing procedures. Subclause (4 ) ensures that these regulations have effect despite the Public Service Act 1999 , and subclause ( 5 ) specifies the kinds of processes and policies included as staffing procedures under this clause.

Subdivision E Miscellaneous

Clause 39 Appropriation of money

Subclause (1 ) provides that references in an Appropriation Act (defined in subclause 3 ) to the old Ombudsman are to be read as references to the new Ombudsman.

Subclause (2 ) provides that if an amount of money vests in the Commonwealth under clause 30 an equal amount may be paid out of the Consolidated Revenue Fund (which is appropriated accordingly) for the purposes of the new Ombudsman.

Clause 40 Exemption from stamp duty and other State or Territory taxes

This clause provides that no State or Territory stamp duty or other tax is payable in respect of the operation this Part, including particularly the transfer of assets or liabilities.

Clause 41 Constitutional safety net ? acquisition of property

This clause provides that if the operation of the Bill would result in an acquisition of property from a person otherwise than on just terms (within the meaning of paragraph 51(xxxi) of the Constitution) the Commonwealth is liable to pay a reasonable amount of compensation to the person. If agreement cannot be reached on the amount of compensation, the person may take action in the Federal Court.

Clause 42 Certificates taken to be authentic

This clause provides that a document that appears to be a certificate given under this Part is to be taken to be authentic and properly given unless demonstrated otherwise.

Clause 43 Delegation by Minister

This clause allows the Minister to delegate all or any of his or her powers and functions under this Part to the new Ombudsman, and requires the new Ombudsman to comply with any directions by the Minister in exercising the delegated powers.

Division 2 - Private Health Insurance Administration Council

Clause 44 Members of the Council

This clause provides that a member of the Council holding office under section 82D of the National Health Act 1953 continues to hold office under section 267-5 of new Act on the same terms and conditions and for the unexpired period of the original appointment.

Clause 45 Chief Executive Officer

This clause provides that the Chief Executive Officer of the Council holding office under section 82PH of the National Health Act 1953 continues to hold that office under section 273-1 of the new Act on the same terms and conditions and for the unexpired period of the original appointment.

Clause 46 Staff and consultants

This clause ensures that staff and consultants employed or engaged by the Council under the National Health Act 1953 continue to be employed on the same terms and conditions under section 273-15 of the new Act.

Division 3 - Administration of premiums reduction and incentive payment scheme

Clause 47 Application of Part 6-4 of the new Act

This clause provides that Part 6-4 of the new Act, under which a private health insurer that is a participating insurer may claim reimbursement for amounts by which premiums are reduced under Division 23 of the new Act, applies from 1 July 2007.

Clause 48 Transition to participating insurer under the new Act

This clause maintains an insurer's status as a participating insurer under the Private Health Insurance Incentives Act 1998 under the new Act, but allows an insurer to apply to become a participating insurer under the new Act from 1 July 2007. The Minister may still revoke an insurer's status under the new Act.

Clause 49 Applications to become a participating insurer before 1 July 2007

Section 14-10(1)(c) of the Private Health Insurance Incentives Act 1998 refers to the public officer as the signatory for applications. However, the public officer is not defined in the new Act.

Subclause (1 ) replaces the public officer with the chief executive officer of a private health insurer as the signatory for an application to become a participating insurer.

Subclause (2 ) ensures that an insurer will not need to reapply to become a participating insurer under the new Act if an application under the Health Insurance Incentives Act 1998 was considered before 1 July 2007 and the Minister treats the application as if it were an application under the new Act.

Clause 50 Continued application of Division 16

This clause allows the Medicare Australia CEO to continue to exercise audit powers and request applications from participating insurers despite the repeal of the Private Health Insurance Incentives Act 1998 .

Clause 51 Continued application of Division 18

This clause allows the Medicare Australia CEO to continue to recover debts from a person or their estate, or set off debts against other amounts, despite the repeal of the Private Health Insurance Incentives Act 1998 .

Division 4 - Private health insurance levies

Clause 52 Continued application of Part VID of the National Health Act 1953 in relation to matters arising before commencement of the new Act

This clause provides that Part VID of the National Health Act 1953 continues to apply after it is repealed to an amount of levy or late payment penalty to which it applied before repeal, and that a process undertaken under Division 4 of the Part to search for levy related documents may continue.

Clause 53 Continued application of section 83I of the National Health Act 1953

This clause provides that the requirement under section 83I of the National Health Act 1953 for registered health benefits organizations to hold levy related documents for seven years continues in force as if the section had not been repealed.

Division 5 - Disclosure of information

Clause 54 Transitional provision relating to secrecy obligations

This clause allows people who obtained information under the National Health Act 1953 to disclose it under the new Act, despite subsection 135A(1) of the National Health Act, if:

·
the disclosure is part of their duties or functions under the new Act; or
·
the disclosure could have been made under Part 6-8 of the new Act if it had been obtained under the new Act.

PART 7 - MISCELLANEOUS

Clause 55 Private Health Insurance (Transition) Rules

This clause provides for the Minister to make Private Health Insurance (Transition) Rules providing for matters identified in the Bill, or necessary or convenient to give effect to the Bill, including:

·
matters of a transitional nature relating to the repeals or amendments made by the Bill; or
·
matters relating to the transition from the National Health Act 1953 to the new Act.

Clause 56 Regulations

This clause provides that the Governor-General may make regulations for the purposes of this Bill.

SCHEDULE 1 - REPEALS

PART 1 - Repeal of provisions

Health Insurance Act 1973

Item 1 repeals the definition of agreement in subsection 3(1) (the definitions section) of the Act consequential to the repeal of Part III of the Act under item 4.

Item 2 repeals paragraph (a) of the definition of patient contribution in subsection 3(1) of the Act which refers to a State covered by an agreement under Part III of the Act, repealed by item 4.

Item 3 repeals sections 3A and 3B which deal respectively with determinations by the Secretary that patients need acute care and certification by medical practitioners that patients who have been in hospital longer than 35 days still require acute care. Section 3B also establishes the Acute Care Advisory Committee to review certificates. The development of contracting arrangements between hospitals and insurers and the introduction of minimum default benefits determined by the Minister have effectively made both sections redundant.

Item 4 repeals Part III of the Act. Apart from section 23EA providing for the declaration of premises as private hospitals, the rest of the Part has not been effective since the expiry of the Medicare Agreements on 30 June 1998. The present Australian Health Care Agreements between the Commonwealth and the States and Territories dealing with public hospital funding are made under the Health Care Appropriation Act 1998 , which includes the principles set out in Part III.

Item 5 repeals Schedule 2A of the Act, which sets out the Heads of Agreement for agreements made under Part III.

National Health Act 1953

Items 6 to 49 repeal redundant definitions in subsection 4(1) (the definitions section) of the Act.

Item 50 repeals subsection 4(1AA) which deals with pathology services provided to hospital patients.

Item 51 repeals sections 5A to 5G. Section 5B, dealing with the declaration of premises as day hospital facilities, is subsumed in section 121-5 of the proposed Private Health Insurance Act. The other sections are no longer required.

Item 52 repeals the reference in subsection 6(1) to the Minister's powers under subsection 78(4A), as this section will also be repealed.

Item 53 repeals Parts VI to VID, which together make up the bulk of the regulatory regime which will now be included in the proposed Private Health Insurance Act.

Item 54 repeals subsections 105AB(1A) to (6AE), dealing with review of decisions under the repealed Parts VI to VID.

Item 55 repeals section 134D, which provides that registered health benefits organizations continue to be liable to comply with the Act even though the time period for compliance with a requirement has passed.

Item 56 repeals subsections 135A(4A) and (12A), which respectively allow the Council to publish statistical or financial information and permit the Commissioner of the Council to divulge information under the section as though he or she was the Secretary of the Department.

Item 57 repeals paragraphs 139A(1)(aa) to (c) which provide for the Secretary to certify, for evidential purposes, that organizations were registered or subject to particular conditions of registration

Item 58 repeals subsections 140(2) and (3) which provide for the making of regulations for various private health insurance purposes.

Item 59 repeals Schedule 1 (setting conditions of registration for registered health benefits organizations) and Schedule 2 (setting the rules for Lifetime Health Cover).

Remuneration Tribunal Act 1973

Item 60 repeals paragraph 7(9)(ae) which allows the Tribunal to determine remuneration for members of the Acute Care Advisory Committee to be abolished under item 3.

PART 2 - Repeal of Acts

Private Health Insurance ( ACAC Review Levy ) Act 2003

Item 61 repeals the Act, which is no longer required following abolition of the Acute Care Advisory Committee under item 3.

Private Health Insurance Incentives Act 1998

Item 62 repeals the Act, as incentives are now dealt with in Part 2-2 of the proposed Private Health Insurance Act. This item commences on 1 July 2008.

Schedule 2 - Amendments

Age Discrimination Act 2004

Item 1 amends Schedule 2 to insert a reference to sections 23-1, 23-10, 26-1 and 26-5 and Part 2-3 of the Private Health Insurance Act 2006 . This will ensure that there is an exemption covering reduction in premiums based on a person's age and increases in premiums based on a person's age of entry when taking out hospital cover under Lifetime Health Cover.

Item 2 amends Schedule 2 to repeal table item 10 which refers to the Private Health Insurance Incentives Act 1998 . This repeal commences on 30 June 2008.

A New Tax System ( Goods and Services Tax ) Act 1999

Item 3 replaces the definition of private health insurance in section 195-1 with a definition referring to the proposed Private Health Insurance Act.

A New Tax System ( Medicare Levy Surcharge - Fringe Benefits ) Act 1999

Items 4 to 8 amend section 4 of the Act to replace terms drawn from the National Health Act 1953 with terms in the proposed Private Health Insurance Act. The effect is to maintain the current policy of imposing a Medicare levy surcharge on persons who either do not have private health insurance covering hospital treatment, or else have such insurance but with excesses of more than $500 for a policy covering one person, or $1,000 for other policies.

Education Services for Overseas Students Act 2000

Item 9 replaces a reference in paragraph 7(2)(b) to a registered health benefits organization under the National Health Act 1953 with a reference to a private health insurer under the proposed Private Health Insurance Act in the definition of course money which an education provider receives from a student.

Financial Sector ( Collection of Data ) Act 2001

Item 10 replaces the current paragraph 7(2)(d) providing that registered organizations under the National Health Act 1953 are not registrable corporations with a provision referring to a corporation that is a private health insurer under the proposed Private Health Insurance Act. As a result private health insurers are not required to comply with the Act.

Financial Transaction Reports Act 1988

Item 11 amends the definition of insurance business in subsection 3(1) to refer to health insurance business carried on under the proposed Private Health Insurance Act, with the result that financial transactions carried on as part of health insurance business are not reportable under the Act.

Freedom of Information Act 1982

Item 12 amends Schedule 3 to include a reference to the disclosure of information provisions in the proposed Private Health Insurance Act, meaning that if the disclosure of documents would be an offence under sections 323-1 and 323-40 of the Private Health Insurance Act those documents are exempt from the Act.

Health Insurance Act 1973

Items 13 to 26 amend section 3 (the definitions section) of the Act.

Items 13, 14, 16, 17, 21 , and 22 insert or amend definitions to refer to the proposed Private Health Insurance Act.

Items 15 and 23 insert definitions of hospital service and public hospital service respectively, following repeal under Schedule 1 of this Bill of Part III of the Act where these definitions are presently located.

Item 18 amends the definition of nursing-home type patient to refer to the care received and the status of the patient rather than the time the patient has been in hospital, and item 19 is a transitional provision stating that a person who was a nursing-home type patient immediately before the commencement of item 18 continues to be a nursing-home type patient under the proposed Private Health Insurance Act.

Item 20 amends the definition of patient contribution to remove a cross-reference to a State that is covered by an agreement, following the repeal of Part III of the Act under item 4 in Schedule 1.

Item 24 amends the definition of recognized hospital to provide that a recognised hospital is a hospital declared as a public hospital under subsection 121-5(8) of the proposed Private Health Insurance Act. While paragraph (a) of the current definition refers to recognized hospitals under an agreement, this has not been operative since the expiry of the Medicare Agreements made under Part III of the Act on 30 June 1998. Since then recognized hospitals have all been declared by the Minister under paragraph (b) of the definition.

Item 25 removes a note to subsection 3(1A) with a redundant reference to the National Health Act 1953 .

Item 26 removes subsections 3(1B), (11) and (12) which contain redundant glosses on the definition of nursing-home type patient.

Item 27 replaces paragraph 10(2)(a) setting out when a 75% Medicare benefit is payable by reference to applicable benefits arrangements with a paragraph referring to hospital treatment and hospital-substitute treatment within the meaning of the proposed Private Health Insurance Act.

Items 28 and 29 amends sections 10AC and 10ACA to replace the exclusion from consideration under the family and single Medicare safety net respectively of services of the kind included in the definition of an applicable benefits arrangement under the National Health Act 1953 with exclusion of services rendered to a person while hospital treatment is provided to the person (or hospital-substitute treatment if the person chooses to receive a benefit from a private health insurer).

Item 30 amends paragraph 14(2)(a) to replace a reference to a medical purchaser-provider agreement with a reference to an agreement between a private health insurer and another person following the repeal of Part VI of the National Health Act 1953 which defined medical purchaser-provide agreements.

Item 31 amends subparagraphs 16A(5AA)(d)(iv) and (e)(i) to remove the references to day hospital facility, as the definition of a day hospital facility will be subsumed into the definition of private hospital under section 121-5 of the proposed Private Health Insurance Act.

Item 32 repeals subsections 20A(2A) to (2D) which allow a patient in a hospital to assign his or her Medicare benefit to different people in different circumstances, and replaces them with a new subsection (2A) which allows a person covered for hospital treatment or hospital-substitute by a private health insurer by agreement to assign his or her Medicare benefit to the insurer, a billing agent or another person.

Items 33 and 34 amend section 20B to extend from six months to two years the period following the provision of the professional service during which a claim for an assigned benefit may be made without consideration by the Minister. This will alleviate some administrative difficulties faced by Medicare Australia.

Item 35 amends section 39 to replace a reference to a contributor to an applicable benefits arrangement with a reference to the equivalent term in the proposed Private Health Insurance Act.

Item 36 deletes the reference in subsection 124W(1) to Part III of the Act, following the repeal of that Part under Schedule 1.

Items 37 and 38 amend section 126, which presently exempts from the ban on medical insurance under subsection (1) applicable benefits arrangements of registered health benefits organizations under the National Health Act 1953 . The exemption in subsection (5A) is recast to refer to complying health insurance policies covering hospital treatment or hospital substitute treatment, and a definition of "cover" is added to subsection (7).

Items 39 to 41 amend section 128C following the move of the definition of public hospital service from Part III of the Act to subsection 3(1).

Items 42 and 43 amend subsections 129AA(1A) and 129AA(1B) to replace the reference to registered organization with a reference to private health insurer.

Item 44 recasts subsection 129AA(5A) to simplify the drafting and replace the reference to registered organization with a reference to private health insurer.

Items 45 to 50 replace references in various paragraphs of section 130 to registered organization with references to private health insurer.

Hearing Services Administration Act 1997

Item 51 repeals a redundant definition of a dependant in subsection 5(2).

Income Tax Assessment Act 1997

Item 52 replaces the reference in section 50-30 to a registered health benefits organization not carried on for the profit or gain of its individual members as a tax exempt entity with a reference to a private health insurer under the proposed Private Health Insurance Act.

Insurance Act 1973

Item 53 replaces the definition of health insurance business in the definition of insurance business in subsection 3(1) with a reference to health insurance business carried on by a private health insurer under the proposed Private Health Insurance Act, with the result that this business is exempt from the requirements of the Act.

Insurance Contracts Act 1984

Item 54 replaces the definition of insurance entered into or proposed to be entered into by a registered health benefits organization in paragraph 9(1)(b) with a definition of insurance entered into or proposed to be entered into by a private health insurer under the proposed Private Health Insurance Act, with the result that such contracts are exempt from the requirements of the Act.

Life Insurance Act 1995

Item 55 replaces a reference in the note to subsection 16ZB(2) to the National Health Act 1953 with a reference to the proposed Private Health Insurance Act as the legislation that regulates jointly regulated friendly societies.

Item 56 replaces a reference to the definition of health insurance business in the Schedule to section 67 of the National Health Act 1953 with a reference to Division 121 of the proposed Private Health Insurance Act.

Medibank Private Sale Act 2006

Items 57 to 59 amend the definitions of contributor, registered health benefits organization and rules in item 1 of Schedule 2 to the Act to change the reference to the National Health Act 1953 to the National Health Act 1953 immediately before the commencement of the proposed Private Health Insurance Act.

Items 60 and 62 to 65, 68 and 70 add the proposed Private Health Insurance Act to a list of provisions including the Corporations Act 2001 , the National Health Act 1953 and a rule of common law or equity which are referred to in various items of the Schedules to the Act.

Items 61, 66 and 67, 69 and 71 to 73 replace references in various items of the Schedules to the Act to sections 73AAC and 73AAD on the National Health Act 1953 with a reference to section 137-10 of the proposed Private Health Insurance Act.

Medical Indemnity Act 2002

Item 74 adds to the list of legislation in paragraph 77(2)(c) the proposed Private Health Insurance Act, with the result that a person dealing with information under the Act does not commit an offence if in doing so he or she is performing a function under the Private Health Insurance Act.

Medicare Levy Act 1986

Items 75 to 79 amend section 4 of the Act to replace terms drawn from the National Health Act 1953 with terms in the proposed Private Health Insurance Act. The effect is to maintain the current policy of imposing a Medicare levy surcharge on persons who either do not have private health insurance covering hospital treatment, or else have such insurance but with excesses of more than $500 for a policy covering one person, or $1,000 for other policies.

National Blood Authority Act 2003

Item 80 amends paragraph 10(3)(a) to remove a reference to section 23E of the Health Insurance Act 1973 following the repeal of Part III and the relocation of definitions to subsection 3(1) in that Act.

National Health Act 1953

Items 81 to 88 insert or amend definitions in subsection 4(1) (the definitions section) of the Act.

Items 81 to 86 and 88 add definitions to subsection 4(1) of complying health insurance policy, hospital, hospital treatment, hospital-substitute treatment, private health insurer, public hospital and rules (of a private health insurer) that refer to how or where these terms will be defined in the proposed Private Health Insurance Act. Item 87 inserts into the subsection the definition of public hospital authority which is removed from section 84 of the Act by item 92.

Items 89 and 90 replace references to registered organization and registered health benefits organization in subsections 50(1) and (4) dealing with payment of nursing home fund benefit with references to private health insurer.

Items 91 and 92 repeal the definitions of public hospital and public hospital authority in subsection 84(1) as these terms are now defined in subsection 4(1).

Item 31 and 94 remove the reference in paragraph 84AAA(1)(c) to a hospital being defined by reference to the Health Insurance Act 1973 , as it is now defined in subsection 4(1), and the reference to a day hospital facility as this is now subsumed within the definition of a hospital; and amends the note at the end of subsection 84AAA(1) to refer to the term hospital being defined in subsection 4(1).

Items 95 replaces subsection 92B(2) with a new subsection providing that a private health insurer is not prevented from entering into a complying health insurance policy under which the insurer covers the cost of pharmaceutical benefits dispensed as part of an episode of hospital treatment or hospital-substitute treatment.

Item 96 to 102 amend the secrecy section of the Act (section 135A) to remove redundant subsections and replace redundant terms.

Item 103 removes the subsection number (1) in section 140 as subsections (2) and (3) were repealed by item 49 in Schedule 1.

Veterans' Entitlements Act 1986

Item 104 replaces subsection 93A(1) which defines contributor and registered health benefits organisation by reference to the National Health Act 1953 with a new subsection that defines contributor and private health insurer by reference to the proposed Private Health Insurance Act.

Items 105 to 107 replace redundant references in section 93A to registered organization with references to private health insurer or insurer.

Schedule 3 - Amendments relating to transition from Private Health Insurance Incentives Act 1998

Income Tax Assessment Act 1936

Item 1 amends paragraph 16(4)(fb) to remove the reference to the Private Health Insurance Incentives Act 1997 and add a reference to Parts 2-2 or 6-4 of the proposed Private Health Insurance Act.

Items 2 and 3 amend subsection 159J(6) to include a reference to both the proposed Private Health Insurance Act and the Private Health Insurance Incentives Act 1998 for the period from 1 July 2007 to 1 July 2008, and remove the reference to the Private Health Insurance Incentives Act 1998 after that time.

Items 4 to 7 amend section 264BB providing for people to claim a taxation rebate on their private health insurance premiums to replace terms drawn from the National Health Act 1953 with terms defined in the proposed Private Health Insurance Act.

Income Tax Assessment Act 1997

Items 8 and 9 amend subsection 52-125 to include a reference to both the proposed Private Health Insurance Act and the Private Health Insurance Incentives Act 1998 for the period from 1 July 2007 to 1 July 2008, and remove the reference to the Private Health Insurance Incentives Act 1998 after that time.

Private Health Insurance Incentives Act 1998

These amendments relate to "turning off" the scheme in the period from 1 July 2007, after which Parts 2-2 and 6-4 of the proposed Private Health Insurance Act begin to operate, to 30 June 2008, when the Act will be repealed.

Item 10 amends paragraph 4-5(1)(a) to provide a person is not entitled to a payment under the Act in relation to premium paid beginning after 30 June 2007.

Items 11 and 12 amend section 11-10 to add a new subsection (2) providing that no-one is eligible to apply for registration under the premiums reduction scheme after 30 June 2007.

Item 13 adds a new subsection 12-5(7) providing that a premium reduction is not allowable under the scheme for premiums paid for a period beginning after 1 July 2007.

Item 14 amends subsection 12-10(2) to provide that a person cannot be a participant in the premiums reduction scheme for a financial year beginning after 30 June 2007.

Item 15 amends section 15-5 to make it clear that a health fund can only claim reimbursement under the Division for an amount of premium reduced because of the operation of the Chapter.

Item 16 amends subsection 15-23(2) to provide that applications by health funds for additional or late payments must be made by 30 June 2008.


Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).