EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health
Private Health Insurance Act 2007
Private Health Insurance (Complying Product) Amendment Rules 2013 (No. 4)
Authority
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 and/or section 188-1 of the Act, or necessary or convenient in order to carry out or give effect to Chapter 3 and/or section 188-1 of the Act.
The Private Health Insurance (Complying Product) Amendment Rules 2013 (No. 4) (the Amendment Rules) amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2010 (No. 2) (the Principal Rules) which commenced on 14 January 2011.
Purpose
The purpose of the amendments to Rule 8A is to change the patient contribution payable per night for nursing-home type patients (NHTPs) in Western Australian public hospitals.
In the Private Health Insurance (Complying Product) Amendment Rules 2013 (No. 3) which took effect on 20 September 2013, the Western Australian NHTP contribution rate was set at $53.25 per day. It has subsequently been brought to the Department of Health’s attention that this figure is not correct and the correct rate is $54.75 per day.
The Amendment Rules have been made to remedy this.
It is not expected that any individual has been disadvantaged by this drafting error. Effectively the setting of the NHTP contribution imposes a maximum benefit that insurers can pay for NHTP hospital accommodation. Under subclause 8A(2) of the Principal Rules, insurers cannot pay a benefit for a NHTP that exceeds an amount equal to the fees or charges incurred in respect of NHTP accommodation less the amount of the NHTP contribution in respect of each day of accommodation. Western Australian NHTPs should already be incurring a patient contribution of $54.75 as this amount is equal to the amount charged by Western Australian public hospitals less than the minimum benefit that private health insurers pay.
Background
Rule 8A of the Principal Rules sets the patient contribution for privately insured NHTPs 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 Schedule to the Amendment Rules changes the Western Australian patient contribution amount and is now in line with NHTP patient contribution amounts in New South Wales, Queensland, South Australia, Tasmania and Victoria. Changes to the NHTP contribution rate reflect increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates), which took effect on 20 September 2013.
Details
Details of the Amendment Rules are set out in the Attachment.
Consultation
No consultation was undertaken with respect to this amendment as it relates only to an inadvertent drafting error.
The Amendment Rules commence on the day after registration.
The Amendment Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Authority: Section 333-20 of the
Private Health Insurance Act 2007
MEDICAL BENEFITS DIVISION
DEPARTMENT OF HEALTH
SEPTEMBER 2013
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLYING PRODUCT) AMENDMENT RULES 2013 (No. 4)
Section 1 Name of Rules
Section 1 provides that the title of the Rules is the Private Health Insurance (Complying Product) Amendment Rules 2013 (No. 4) (the Amendment Rules).
Section 2 Commencement
Section 2 provides that the Amendment Rules are to commence on the day after registration.
Section 3 Amendment of Private Health Insurance (Complying Product) Rules 2010 (No. 2)
Section 3 provides that the Schedule to the Amendment Rules amends the Private Health Insurance (Complying Product) Rules 2010 (No. 2) (the Principal Rules) which commenced on 14 January 2011.
Schedule – Amendments
Item 1 – Part 2, Paragraph 8A(3)(a)
Paragraph 8A(3)(a) of the Principal Rules set out the patient contribution for privately insured NHTPs at public hospitals in Western Australia.
Item 1 of the Schedule of the Amendment Rules amends Part 2, Paragraph 8A(3)(a)(viii) of the Principal Rules by increasing the NHTP contribution at Western Australian public hospitals from $53.25 to $54.75.
Overview
The Private Health Insurance (Complying Product) Amendment Rules 2013 (No. 4) were enacted to amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2010 (No. 2) concerning the patient contribution payable per night for nursing-home type patients (NHTPs) in Western Australian public hospitals. These amendments were introduced by the Minister for Health under Section 333-20 of the Private Health Insurance Act 2007, addressing an inadvertent drafting error in the previously set patient contribution rate. The objective was to correct the patient contribution for NHTPs from $53.25 to the accurate rate of $54.75 per day, aligning it with other states and reflecting recent increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance. This correction ensures that the maximum benefit insurers can pay for NHTP hospital accommodation is appropriately set, thereby maintaining consistency with charges in other states and addressing the inadvertent error without any anticipated disadvantage to individuals.
Scope and Application
The Private Health Insurance (Complying Product) Amendment Rules 2013 (No. 4) amends the Private Health Insurance (Complying Product) Rules 2010 (No. 2), focusing specifically on the patient contribution payable per night for nursing-home type patients (NHTPs) in Western Australian public hospitals. The amendment rectifies an inadvertent drafting error from a previous set of rules, which set the contribution rate at $53.25 per day instead of the correct rate of $54.75 per day. This amendment ensures that the contribution rate aligns with those in other states and territories, reflecting increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates) effective from 20 September 2013. The rules apply to private health insurers and affect the maximum benefits they can pay for NHTP hospital accommodation in Western Australia, without impacting individuals adversely as the correct contribution rate was already being charged by hospitals. The changes are intended to correct the oversight and do not require consultation as they pertain solely to a technical correction. The Amendment Rules will take effect on the day after registration, serving as a legislative instrument under the Legislative Instruments Act 2003.
Key Provisions
The Private Health Insurance (Complying Product) Amendment Rules 2013 (No. 4) amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2010 (No. 2) to correct a drafting error in the patient contribution for nursing-home type patients (NHTPs) in Western Australian public hospitals. Specifically, Rule 8A(3)(a)(viii) now sets the contribution at $54.75 per day instead of $53.25, aligning it with rates in other states (Section 3 of the Amendment Rules). This adjustment ensures that the contribution amount reflects the actual fees charged by Western Australian public hospitals, which is less than the minimum benefit paid by private health insurers.
The Amendment Rules impose specific obligations on private health insurers operating under the Private Health Insurance Act 2007. Insurers are now required to adhere to the corrected patient contribution rate of $54.75 per day for NHTPs in Western Australian public hospitals, as stipulated in Rule 8A(3)(a)(viii) of the amended Principal Rules (Section 3 of the Amendment Rules). This requirement ensures that the benefits paid by insurers do not exceed the hospital charges minus the patient contribution amount, maintaining consistency in the maximum benefits provided to insured patients.
Failure to comply with the corrected patient contribution rate may result in civil or criminal consequences, although no specific penalties are mentioned in the Amendment Rules. However, the Act provides for general penalties for non-compliance with private health insurance regulations, which may include fines or other sanctions. Insurers must ensure they are aware of and adhere to the updated contribution rates to avoid any potential legal repercussions.
The Amendment Rules were made to correct an inadvertent drafting error and to ensure that the patient contribution for NHTPs in Western Australian public hospitals is accurately reflected. By setting the correct contribution rate, the Amendment Rules aim to maintain the integrity of the private health insurance system and ensure that insured patients receive the correct benefits in accordance with the law. The amendment does not require consultation as it solely addresses a drafting error, and it comes into effect on the day after registration, as specified in Section 2 of the Amendment Rules.