EXPLANATORY STATEMENT
Issued by the authority of the Minister for Human Services
Medicare Australia Act 1973
Medicare Australia (Function of Chief Executive Officer—Lifetime Health Cover) Direction 2007
Background
The Government introduced lifetime health cover on 1 July 2000, through legislative amendments. It provides for health funds to charge different premiums based on the age of members when they first take out hospital cover with a registered health benefits organisation.
Under lifetime health cover, people who take out hospital cover early in life are charged lower premiums throughout their life, relative to people who take out cover later. In particular, people who delay taking out hospital cover are charged a 2 per cent loading on top of their premium for every year they are aged over 30 when they first take out such cover.
In 2006, provision was made in the budget for mail-outs by the Department of Health and Ageing to those persons approaching lifetime health cover age and to other persons who have become subject to lifetime health cover. The Department of Health and Ageing has sought the assistance of the CEO of Medicare Australia.
Section 4 of the Medicare Australia Act 1973 (the Act) establishes Medicare Australia.
Sections 5 and 8AG of the Act create the office of Chief Executive Officer of Medicare Australia (CEO), with statutory functions. The CEO is, under the Minister and through the Secretary to the Department of Human Services, responsible for managing Medicare Australia.
Section 5 of the Act sets out a number of mechanisms for conferral of functions on the CEO. Paragraph 5(1)(d) of the Act provides that the CEO has any functions the Minister, by writing, directs the CEO to perform.
Purpose of the Direction
The purpose of the Medicare Australia (Function of Chief Executive Officer—Lifetime Health Cover) Direction 2007 (the Direction) is for the Minister for Human Services to confer a function on the Chief Executive Officer of Medicare Australia (CEO of Medicare Australia) to assist the Department of Health and Ageing in communications to members of the public about lifetime health cover as now established under Part 2-3 of the Private Health Insurance Act 2007 and allow the CEO of Medicare Australia to exercise powers in relation to that function.
Details of Direction
The Direction commences on the day after it is registered.
Function in relation to Lifetime Health Cover
This section, at subsection 4(1), confers on the CEO a function to assist the Department of Health and Ageing with communications to members of the public about lifetime health cover.
Sub-section 4(2) sets out what the function includes and provides sub-functions, including to identify persons approaching lifetime health cover age and other persons who have become subject to lifetime health cover (for example, migrants). Sub-section 4(2) also includes the sub-function to provide, by mail-out or other means, the information provided to the CEO of Medicare Australia by the Department of Health and Ageing about lifetime health cover to those persons.
The function conferred also includes the provision of information and reports to the Department of Health and Ageing in relation to the mail-outs and other means of providing information on lifetime health cover.
Sub-section 4(3) provides that for the function conferred on the CEO of Medicare Australia under this section, the CEO of Medicare Australia may use medicare information to identify persons approaching lifetime health cover age and those other persons who have become subject to the operation of lifetime health cover, to contact those persons by mail-outs or other means and for reporting to the Department of Health and Ageing.
Consultation
The Direction was settled after consultation with the Department of Health and Ageing.
The Direction is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The Medicare Australia (Function of Chief Executive Officer—Lifetime Health Cover) Direction 2007 was introduced to enhance the coordination between the Department of Health and Ageing and Medicare Australia regarding the communication and administration of lifetime health cover, as established under the Private Health Insurance Act 2007. This Direction was enacted to address the need for effective communication strategies to inform the public about lifetime health cover and its implications. It was issued by the Minister for Human Services under the authority of the Medicare Australia Act 1973, which establishes Medicare Australia and outlines the functions of its Chief Executive Officer. The primary objective of the Direction is to confer a specific function upon the CEO of Medicare Australia to assist in public communications about lifetime health cover, ensuring that individuals approaching the age threshold for lifetime health cover, as well as those newly subject to it, are properly informed. The Direction empowers the CEO to use Medicare information for identifying relevant individuals and facilitating the distribution of pertinent information through various means.
Scope and Application
The Medicare Australia (Function of Chief Executive Officer—Lifetime Health Cover) Direction 2007 applies to the Chief Executive Officer (CEO) of Medicare Australia, who is tasked with assisting the Department of Health and Ageing in communicating with members of the public about lifetime health cover. This encompasses identifying individuals who are approaching the age at which they are subject to lifetime health cover, as well as other individuals who have become subject to such cover, including migrants. The CEO is also responsible for providing information and reports to the Department of Health and Ageing about the mail-outs and other means of disseminating information on lifetime health cover. The geographic reach of this Act is national, as it pertains to all individuals within Australia who are affected by lifetime health cover provisions. The Direction allows the CEO to use Medicare information for the identification and communication purposes outlined above. It is important to note that this Direction is a legislative instrument under the Legislative Instruments Act 2003, and it was developed following consultation with the Department of Health and Ageing.
Key Provisions
The Medicare Australia (Function of Chief Executive Officer—Lifetime Health Cover) Direction 2007 (the Direction) is a legislative instrument that confers on the Chief Executive Officer of Medicare Australia (CEO) a specific function relating to lifetime health cover. This function is outlined in Section 4 of the Direction, which mandates that the CEO assist the Department of Health and Ageing with public communications about lifetime health cover, as established under Part 2-3 of the Private Health Insurance Act 2007. Sub-section 4(2) further details the function to include identifying individuals who are approaching the age at which lifetime health cover becomes applicable or have otherwise become subject to such cover, such as migrants, and providing them with information about lifetime health cover through mail-outs or other means. The CEO is also required to offer information and reports to the Department of Health and Ageing regarding these communications.
The obligations imposed on the CEO by this Direction are quite specific. The CEO must identify individuals who are approaching the age for lifetime health cover or who have become subject to the cover. This identification can be achieved through the use of Medicare information. Once these individuals are identified, the CEO must then provide them with information about lifetime health cover, which is supplied by the Department of Health and Ageing. This information can be disseminated through mail-outs or other appropriate means. Additionally, the CEO must prepare and submit reports to the Department of Health and Ageing that detail the communications and any other relevant information.
Failure to comply with the provisions of the Direction could result in civil or criminal consequences, although the specific penalties are not detailed within the text of the Direction. However, under the general legislative framework, breaches of such legislative instruments can potentially lead to fines, imprisonment, or other penalties as prescribed by relevant laws. It is also important to note that the Direction is a legislative instrument under the Legislative Instruments Act 2003, which means that it must be registered and published in the Federal Register of Legislative Instruments, further ensuring its legal standing and enforceability.