EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Private Health Insurance Act 2007
Private Health Insurance (Complying Product) Amendment Rules 2009 (No.2)
Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Complying Product) Rules providing for matters required or permitted by Chapter 3 of the Act, or necessary or convenient in order to carry out or give effect to the Act.
The Private Health Insurance (Complying Product) Amendment Rules 2009 (No. 2) (the Amendment Rules) amend the Private Health Insurance (Complying Product) Rules 2008 (No.2) (the Rules) which commenced on 1 July 2008.
The purpose of Rule 8A is to enforce the patient contribution for privately insured nursing-home type patients (NHTP) by restricting the amount of benefit that private health insurers pay for each day of NHTP hospital treatment at a hospital. The amount of benefit is restricted to the hospital’s charge less the patient contribution amount.
The Amendment Rules make minor changes to paragraph 8A(3)(c) of the Rules by amending the amounts for the NHTP patient contribution at public hospitals in NSW, Queensland, South Australia, Tasmania and Victoria.
The Amendment Rules also amend the NHTP contribution at private hospitals provided for in paragraph 8A(3)(d) of the Rules.
Consultation
The NSW Health (NSW) Queensland Health (QLD), Department of Health (SA), Department of Health and Human Services (TAS) and the Department of Human Services (VIC) were consulted with regard to increasing the NHTP patient contribution for their jurisdictions. No objections were made.
No specific consultation was undertaken in relation to the amendment to paragraph 8A(3)(d) of the Rules (as amended) regarding private hospitals because the changes were machinery in nature and did not substantially alter existing arrangements.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
MARCH 2009
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLYING PRODUCT) AMENDMENT RULES 2009 (No.2)
- Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2009 (No. 2) (the Amendment Rules).
2. Commencement
Rule 2 provides that the Amendment Rules are to commence on 20 March 2009, or if registered on a later date, the day after registration.
3. Amendment of Private Health Insurance (Complying Product) Rules 2008 (No.2)
Rule 3 provides that the Schedule to the Amendment Rules amends the Private Health Insurance (Complying Product) Rules 2008 (No.2) which commenced on 1 July 2008, and were subsequently amended on 20 September 2008, 9 December 2008, 1 January 2009 and 13 February 2009.
Schedule – Amendments
Item 1 – Part 2, Paragraph 8A(3)(c)
Paragraph 8A(3)(c) of the Rules provides the patient contribution for privately insured NHTPs at a public hospital.
Item 1 of the Schedule of the Amendment Rules amends Part 2 subparagraph 8A(3)(c)(ii) to the Rules by increasing the NHTP patient contribution at public hospitals in New South Wales from $40.15 to $41.00. Item 1 further amends Part 2 subparagraph 8A(3)(c)(iv) to subparagraph 8A(3)(c)(vii) of the Rules by increasing the NHTP patient contribution at public hospitals in Queensland, South Australia, Tasmania and Victoria from $40.80 to $41.35. This increase reflects the indexation applied to Adult Pension Basic Rate and the maximum daily rate of rental assistance that will commence on 20 March 2009.
Item 2 – Part 2, Paragraph 8A(3)(d)
Paragraph 8A(3)(d) of the Rules provides the patient contribution for privately insured NHTPs at private hospitals.
Item 2 of the Schedule of the Amendment Rules amends Part 2 subparagraph 8A(3)(d) of the Rules by increasing the NHTP patient contribution at private hospitals from $40.80 to $41.35. This increase reflects the indexation applied to Adult Pension Basic Rate and the maximum daily rate of rental assistance that will commence on 20 March 2009.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
MARCH 2009
Overview
The Private Health Insurance (Complying Product) Amendment Rules 2009 (No. 2) were enacted to make amendments to the Private Health Insurance (Complying Product) Rules 2008 (No. 2), which themselves were designed to enforce the patient contribution for privately insured nursing-home type patients (NHTP) by regulating the amount of benefit that private health insurers can pay for each day of NHTP hospital treatment at both public and private hospitals. Enacted by the Minister for Health and Ageing under the authority provided by section 333-20 of the Private Health Insurance Act 2007, the policy objective of these rules is to ensure that the patient contributions for NHTPs are in line with the indexation applied to the Adult Pension Basic Rate and the maximum daily rate of rental assistance, effective from 20 March 2009. The rules increased the NHTP patient contribution at public hospitals in New South Wales, Queensland, South Australia, Tasmania, and Victoria, as well as at private hospitals, to reflect these changes. Consultations were conducted with relevant health departments in the aforementioned states and territories, with no objections raised regarding the amendments to public hospitals, while no specific consultation was necessary for the amendments to private hospitals as they were considered to be of a minor, procedural nature.
Scope and Application
The Private Health Insurance (Complying Product) Amendment Rules 2009 (No.2) applies to private health insurers operating within Australia, specifically addressing the patient contributions for nursing-home type patients (NHTP) receiving treatment in both public and private hospitals. The rules pertain to those jurisdictions where the patient contribution has been indexed, namely New South Wales, Queensland, South Australia, Tasmania, and Victoria. The Amendment Rules aim to ensure that the patient contribution for NHTPs aligns with the indexation applied to the Adult Pension Basic Rate and the maximum daily rate of rental assistance, effective from 20 March 2009. The amendment increases the patient contribution for public hospitals in New South Wales from $40.15 to $41.00 and from $40.80 to $41.35 for public hospitals in Queensland, South Australia, Tasmania, and Victoria. Similarly, the contribution for private hospitals has been increased from $40.80 to $41.35. The rules extend the scope of the Private Health Insurance Act 2007 by making necessary adjustments to the patient contributions, and they are enforced through subordinate legislation, ensuring that private health insurers comply with the stipulated patient contribution amounts.
Key Provisions
The main operative sections of the Private Health Insurance (Complying Product) Amendment Rules 2009 (No.2) concern the amendments to the patient contribution amounts for nursing-home type patients (NHTP) in private health insurance. Rule 3 specifies that the Schedule amends the Private Health Insurance (Complying Product) Rules 2008 (No.2). Specifically, the Schedule amends Part 2, Paragraph 8A(3) of the Rules, which sets out the patient contributions for NHTPs in public and private hospitals. Item 1 of the Schedule increases the NHTP patient contribution at public hospitals in New South Wales from $40.15 to $41.00 and in Queensland, South Australia, Tasmania, and Victoria from $40.80 to $41.35. Item 2 similarly increases the NHTP patient contribution at private hospitals from $40.80 to $41.35. These amendments reflect the indexation applied to the Adult Pension Basic Rate and the maximum daily rate of rental assistance.
The obligations imposed by these rules on private health insurers include ensuring that the benefits paid for NHTP hospital treatment are limited to the hospital's charge less the specified patient contribution amount. Insurers must comply with these updated contribution rates for both public and private hospitals to remain compliant with the Act. The rules also require insurers to update their systems and documentation to reflect these changes, ensuring that they accurately reflect the new contribution rates when processing claims for NHTP treatment.
There are no specific offences, penalties, or civil/criminal consequences outlined in the Amendment Rules themselves. However, failure to comply with the Private Health Insurance Act 2007 and its associated rules could result in penalties under the Act. These may include fines and other enforcement actions by the Australian Prudential Regulation Authority (APRA) or the Australian Competition and Consumer Commission (ACCC). For instance, under Section 126 of the Act, a private health insurer found to have contravened the rules may be subject to penalties. The maximum penalty for contravening certain provisions of the Act can be up to $1,100,000 for a corporation and $22,000 for an individual, depending on the nature and severity of the breach. Additionally, ongoing non-compliance could lead to more severe consequences, including the potential revocation of the insurer’s licence to operate.