EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health
Private Health Insurance Act 2007
Private Health Insurance (Complying Product) Amendment Rules 2014 (No. 3)
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 2014 (No. 3) (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 (NHTP) at public hospitals in Victoria.
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 makes minor changes to Paragraph 8A(3)(a) of the Principal Rules by amending the NHTP contribution rate at public hospitals in
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 March 2014.
Details
Details of the Amendment Rules are set out in the Attachment.
Consultation
On 7 March 2014, states and territories were asked whether they would be increasing the NHTP contribution and accommodation rates in their jurisdiction in line with increases in the Pension and Rental Assistance Rates. New South Wales, South Australia, Tasmania, Queensland, Northern Territory and Western Australia advised that they will increase the NHTP contribution rates in their public hospitals from 20 March 2014. The
Australian Capital Territory advised that it is not increasing its NHTP contribution and accommodation rates at this time. Victoria provided advice on 25 March 2014 that they will increase the NHTP contribution rate in Victorian public hospitals as well.
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
APRIL 2014
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLYING PRODUCT) AMENDMENT RULES 2014 (No. 3)
Section 1 Name of Rules
Section 1 provides that the title of the Rules is the Private Health Insurance (Complying Product) Amendment Rules 2014 (No. 3) (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.
Item 1 of the Schedule of the Amendment Rules amends Part 2, Paragraph 8A(3)(a)(vii) of the Principal Rules by increasing the NHTP contribution at public hospitals:
- Victoria $54.75 to $55.80;
Overview
The Private Health Insurance (Complying Product) Amendment Rules 2014 (No. 3) are a legislative instrument designed to amend the Private Health Insurance (Complying Product) Rules 2010 (No. 2), and they were enacted under Section 333-20 of the Private Health Insurance Act 2007. These rules were introduced to address the need to update the patient contribution payable per night for nursing-home type patients (NHTP) at public hospitals in Victoria in line with increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates) that took effect on 20 March 2014. The purpose of these amendments is to ensure that the contribution rates paid by privately insured NHTPs are consistent with these updated rates. The rules were developed following consultations with states and territories, including Victoria, which confirmed their intention to align their NHTP contribution rates with the new pension and rental assistance rates. The rules are intended to take effect on the day after their registration.
Scope and Application
The Private Health Insurance (Complying Product) Amendment Rules 2014 (No. 3) pertain to the regulation of private health insurance products in Australia, specifically addressing patient contributions for nursing-home type patients (NHTP) at public hospitals in Victoria. These rules amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2010 (No. 2), which commenced on 14 January 2011, to adjust the patient contribution payable per night for NHTPs in Victorian public hospitals. The amendment is necessitated by increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates), which came into effect on 20 March 2014. This change ensures that the contribution rates reflect current economic conditions and government pension rates, thereby impacting private health insurers and insured patients in Victoria. The rules are a legislative instrument under the Legislative Instruments Act 2003 and are made pursuant to Section 333-20 of the Private Health Insurance Act 2007.
Key Provisions
The Private Health Insurance (Complying Product) Amendment Rules 2014 (No. 3) (the Amendment Rules) are an instrumental update to the Private Health Insurance (Complying Product) Rules 2010 (No. 2) (the Principal Rules). These Amendment Rules primarily focus on modifying the patient contribution for nursing-home type patients (NHTP) in public hospitals, particularly in Victoria. Specifically, Rule 8A, which governs the contributions for NHTPs, has been amended to reflect changes in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates) that took effect on 20 March 2014. The change in Victoria raises the NHTP contribution from $54.75 to $55.80 per night.
Under the Private Health Insurance Act 2007, these Amendment Rules are authorised by Section 333-20, which empowers the Minister to make rules that are necessary to implement or give effect to the Act. The Amendment Rules are designed to ensure that private health insurers adjust their contributions in line with updated government-set rates, thereby maintaining consistency and fairness within the private health insurance framework. This adjustment is particularly relevant to the patient contributions for NHTPs, ensuring that insurers' payments align with the new rates set by the government.
The obligations imposed by the Amendment Rules primarily revolve around compliance with the updated NHTP contribution rates. Private health insurers are required to adhere to these new rates when calculating and paying benefits for NHTPs in public hospitals. This includes updating their internal systems and policies to reflect the new contribution amounts, ensuring that they accurately apply the rates as specified in the Amendment Rules. Failure to comply with these updated rates could lead to discrepancies in the benefits paid to NHTPs, potentially causing financial strain on both the insurer and the patient.
In terms of penalties and consequences for non-compliance, the Amendment Rules do not explicitly detail specific sanctions. However, under the Private Health Insurance Act 2007, non-compliance with the rules and regulations governing private health insurance can result in various civil and criminal penalties. Civil penalties can include fines, while criminal penalties can include imprisonment, depending on the severity and intent behind the breach. The exact penalties would be determined in accordance with the provisions of the Act and relevant case law, but the overarching aim is to enforce compliance to protect the interests of insured patients and maintain the integrity of the private health insurance system.