Speeches

HEALTH LEGISLATION AMENDMENT (PRIVATE HEALTH INSURANCE) BILL 2006 Second Reading

June 15, 2006

Mr HAYES (Werriwa) (9.56 a.m.)—I rise today in general support of the provisions of the
Health Legislation Amendment (Private Health Insurance) Bill 2006, but in particular I support
the amendments foreshadowed by the shadow minister for health. I welcome a number of the
provisions contained in this bill but stop short of praising it entirely, just as this bill stops short
of really providing the safeguards needed for consumers of private health insurance.
The provisions of this bill change the power of the Private Health Insurance Ombudsman and
make some adjustments to the administration of the private health insurance rebate by
Medicare and the Australian Taxation Office. The bill expands the powers of the ombudsman so
that in addition to its role of dealing with disputes between customers and funds it can now
deal with issues related to arrangements between insurers, the brokers and providers of
services. On a voluntary basis the Private Health Insurance Ombudsman can also mediate in
disputes.
Amendments are also made so that the Private Health Insurance Ombudsman will be able to
direct the participation of those subject to a complaint in compulsory conciliation. At the
request of the minister or of the ombudsman’s own volition, the ombudsman will be able to
mediate between a health fund and a health care provider. No doubt all members would agree
that this is an important power for the ombudsman. Importantly, the ombudsman will have
powers to require records to be produced not only from the funds but also from the health care
providers.
This bill also takes action to address the protection of those involved with the ombudsman
from civil and personal liabilities that may arise from its increased powers. The bill also
contains a provision that puts consumer protection front and centre when it comes to the focus
of the powers and actions of the Private Health Insurance Ombudsman. This is an important
provision that dovetails with the extension of the ombudsman’s powers.
In her speech yesterday the member for Lalor indicated that the last thing Labor wanted to see
was the ombudsman concentrating its efforts on contractual disputes between funds and
health care providers, and also that Labor would not want the ombudsman to act as a referee
simply on pricing and servicing disputes between funds and providers. I would go a step
further and say that I do not believe that private health insurance customers would want to
see that the focus of attention of the ombudsman would be on anything but the private health
insurance customer.

Health insurance disputes often involve complex issues. It is about time customers were
represented in the private health insurance market. People dealing with health insurance and
health care providers often feel intimidated by having to deal with these giants in the industry.
They know that the insurers, should they want to, can effectively starve the customer by
delaying their entitlements and dragging things out as long as possible. Additionally, most
customers simply do not have the financial resources to pursue matters through the courts,
should it come to that. I support increased consumer protection, particularly in complex
markets such as the private health insurance market. I support the provisions in this bill that
extend and enhance the power of the ombudsman when it comes to providing consumer
protection.
I cannot participate in this debate on private health insurance without talking about what is on
the minds of most people in my electorate when we raise this issue. Private health insurance is
an important issue for the constituents of my electorate—which is why I draw it to the
attention of the House—and I daresay it is the same for members opposite. Private health
insurance offers a greater degree of health care protection to the many families who take it out
and it is an important factor in the budgets of those families. When I mention private health
insurance to constituents in my electorate I hear some strongly worded phrases, and usually
one or two references to the fact that they feel they are being ripped off.
People in my electorate take out private health care insurance for the additional level of
service it provides for them and their families should they fall ill or need hospitalisation. They
understand and accept that insurance means that you can often pay premiums for a long
period of time and not call on the insurance company to make any payments, as nothing has
happened, and in such circumstances they consider themselves fortunate. What they do not
understand, and what they are not willing to accept, is that they are paying, on average,
premiums up to 40 per cent higher than they were in 2001. The member for Bowman recently
took us through a lengthy dissertation justifying the price increases that have occurred. I invite
him to front up to the people in his electorate and explain why premiums have increased since
2001 by an average of 40 per cent.
What people do not accept is that, despite the multi-billion dollar subsidy of the private health
insurance industry that this government has locked the Australian taxpayer into, these
premiums go up every time the industry applies to the minister for a price increase. There
have been eight successive increases in health insurance premiums, every one of them having
been ticked off by the minister. People accept that prices are generally going to rise over time.
They see the cost of food and other consumer items rising. They know that other insurance
premiums are also going to rise due to the costs being experienced by industry. What they
cannot accept is that private health insurance premiums have increased by 40 per cent since
2001.

Constituents in my electorate were under the impression that there would be downward
pressure on health insurance premiums. Why would they think that? It is simple—they
believed the minister when he made the completely empty promise in 2001 that there would
be downward pressure on premiums. It is unacceptable that, whenever the health insurance
industry companies make an application to the minister for a price rise, he gets out his rubber
stamp, turns to the last page in the relevant document and stamps the page—giving the price
rise a big tick of approval. Worse still is that, when the minister makes the announcement that
premiums have risen, he always refers to ‘average premium rises’. This is interesting.
Constituents who contact my electorate office often report to me that the yearly premium rises
they are experiencing are more in the order of 20 per cent, as opposed to the minister’s
announcement, for example, of a seven per cent ‘average’ premium rise.
How can this be the case? I undertook some investigation to find out. People are insistent
when they talk about anything that affects the family budget. They come in and try to explain
to their local member just what is impacting on the budget. They have taken me through these

numbers. We find that there is some trickery involved in the calculation of ‘average’ premium
rises.
Health insurers manage to increase some premiums well above this figure of seven per cent by
simply lowering the price of other products that they have on offer. When you look into this,
you see that most of these products that fall in price generally correlate with those which are
either defunct or, alternatively, closed to new members. That certainly does have a direct
impact. That does not seem to matter to the minister though. He is happy to get out the
rubber stamp and the big black pen, tick it off and stamp the page—and off we go again with
another one of those successive premium rises, all of which have occurred on his watch. With
premiums rising on the one hand, the government then wonders why, on the other hand,
people who do not make claims on their insurance product start to consider leaving the
system. I will let the minister in on a little secret, one that he ought to have regard for
because I am sure that the people who visit my electorate office are no different from the
people who visit the electorate offices of all members in this House: they believe they are
being ripped off by this system. They deserve better. They deserve affordable and accessible
private health insurance.
Not only do people deserve affordable and accessible private health insurance; they also
deserve affordable and accessible access to medical services in general. The electorate of
Werriwa suffers from a shortage of GPs, something that I have been campaigning on for some
time. I have taken up many petitions and spoken at many venues within the community on
this. Why this has come about and why it is a central point of concern for many young families
in my area is that the current ratio of GPs to the population in Werriwa stands at one GP to
1,700 head of population. This is a huge difference from the federal Department of Health and
Ageing’s recommendation of one GP to 1,000 people. Our ratio is significantly above that. Our
area in the outer western metropolitan area of Sydney has a high density of families. The
people in our area have a high need to call upon a GP’s services, yet we find ours is one of the
worst affected areas in having one GP to 1,700 head of population.

In Sydney’s new growing suburbs, health care is extremely important. Not only is it extremely
important to the people in those new suburbs; it is also at the front of the minds of all
residents when they are looking at the provision of services within their region or suburb. It
often gets back to the issue of the number of GPs that we have available to administer health
care—and we in my region are particularly suffering as we try to attract GPs. Our residents,
particularly young families and the older residents in many of the more established areas, are
suffering because of this lack of GP support.
One of the central reasons why people in my electorate are suffering from the lack of GPs is
the government’s cut in the number of GP training positions back in 1996. They are paying the
price of the government’s obsession with cost over service because they do not have
reasonable access to a GP. The residents of Kemps Creek, Hoxton Park, Horningsea Park,
Carnes Hill, Edmondson Park, Prestons and Austral are in areas where we have a critical health
care workforce shortage. It is front and centre in the minds of local families.
While I am on the record in this place as welcoming the investment that the government has
made in the development of the new medical school on the Campbelltown campus of the
University of Western Sydney, I say this will not solve the problems that the residents are
experiencing now. I am sure that the school will produce doctors of a very high quality. I am
confident that we will induce a number of these graduating medical practitioners, once they
have seen and experienced the advantages that we have to offer them in Western Sydney, to
stay and service the south-west of Sydney. But we will not see an improvement in our GPpopulation
ratio for at least another seven to eight years if we are simply going to rely upon
doctors coming out of the University of Western Sydney’s medical school to simply go out and,
as is expected, resolve the issues as to our doctor shortage.

I would like to raise another health issue of concern that faces many residents in my electorate
and, no doubt, other electorates. It is also the result of the government’s decision to prioritise
cost over health care. As with its cuts to GP training places in 1996, on coming to office this
government made a decision which abolished the Commonwealth dental health scheme. This
government decided to cut $100 million out of public dentistry—there was $100 million cut
from a program that the government is on record as saying worked. Despite the provisions of
the Constitution, this government decided that the Commonwealth no longer had a
responsibility for dental health care. It left the state governments to pick up the tab and it
continues to deny that it has any role or responsibility in providing dental services to our
communities. The Constitution says differently, of course, and it is about time that the
government accepted its responsibility and restored a public dental health program. It is about
time that it acted to cut the lists of people waiting for dental treatment in the public health
system. It is about time that the government stopped the situation that only those who have
private health insurance can afford dental services.
People should not be forced to think about pulling their own teeth out simply because they
cannot afford to see a dentist to have their teeth fixed. There are many elderly people who
come and visit my office. People should not have to consider using superglue to fix their own
dentures because the government wants to deny the responsibility that was given to it under
the Australian Constitution. This government and the current minister need to stop the
obsession with cost and dedicate the same time, the same energy and the same commitment
to worrying about the health care of the people of this country. Care should be first and
foremost in the minds of those deciding the future of health policy, because health policy
should always be about people, not just about cost. This government needs to act and act
now.(Time expired)

WE'LL PUT PEOPLE FIRST