EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health
Private Health Insurance Act 2007
Private Health Insurance (Complying Product) Amendment Rules 2015 (No. 2)
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 2015 (No. 2) (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 the Australian Capital Territory (ACT).
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 the ACT. 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 2015.
Details
Details of the Amendment Rules are set out in the Attachment.
Consultation
On 4 March 2015, 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, Victoria and Western Australia advised that they will increase the NHTP contribution rates in their public hospitals from 20 March 2015.
The ACT advised that it was not increasing its NHTP contribution and accommodation rates at that time.
On 29 April 2015 the Australian Government Department of Health (the Department) advised states and territories of its intention to increase minimum private health insurance benefits for private hospital accommodation as a consequence of CPI movements for the period March 2014-March 2015. On 18 May 2015 ACT advised the Department that in addition to increasing its minimum private health insurance benefits it also wished to increase its patient contribution rates per night for private NHTPS at public hospitals.
The Amendment Rules commence on 1 July 2015.
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
JUNE 2015
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLYING PRODUCT) AMENDMENT RULES 2015 (No. 2)
Section 1 Name of Rules
Section 1 provides that the title of the Rules is the Private Health Insurance (Complying Product) Amendment Rules 2015 (No. 2) (the Amendment Rules).
Section 2 Commencement
Section 2 provides that the Amendment Rules are to commence on 1 July 2015.
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) of the Principal Rules by increasing the NHTP contribution at public hospitals in the ACT:
- Australian Capital Territory $55.80 to $56.90;
Overview
The Private Health Insurance (Complying Product) Amendment Rules 2015 (No. 2) were enacted to amend the Private Health Insurance (Complying Product) Rules 2010 (No. 2) and address the need to update patient contribution rates for nursing-home type patients (NHTP) at public hospitals in the Australian Capital Territory (ACT). These amendments were authorised under Section 333-20 of the Private Health Insurance Act 2007 and were made by the Minister for Health. The policy objective was to ensure the patient contribution rates for NHTPs at public hospitals in the ACT were in line with recent 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 2015. The rules were introduced after consultation with the ACT government, which initially indicated it would not increase the NHTP contribution rates but later decided to align with the increases in private health insurance benefits for private hospital accommodation due to Consumer Price Index movements.
The Private Health Insurance (Complying Product) Amendment Rules 2015 (No. 2) aim to modify the patient contribution for NHTPs at public hospitals in the ACT by updating the contribution rate in accordance with the relevant increases in pension and rental assistance rates. This amendment ensures consistency and fairness in the contribution rates across different jurisdictions. The rules, which commenced on 1 July 2015, reflect the government's commitment to adjusting private health insurance benefits to keep pace with changes in economic indicators and living costs.
Scope and Application
The Private Health Insurance (Complying Product) Amendment Rules 2015 (No. 2) amend the Private Health Insurance (Complying Product) Rules 2010 (No. 2) to adjust the patient contribution payable per night for nursing-home type patients (NHTP) at public hospitals in the Australian Capital Territory (ACT). These amendments are a direct response to 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 2015. The purpose of these amendments is to ensure that the contribution rates for NHTPs are consistent with the updated rates of pension and rental assistance. The amendment rules are a legislative instrument under the authority of Section 333-20 of the Private Health Insurance Act 2007, and they commence on 1 July 2015. The changes made by the Amendment Rules are intended to reflect adjustments in relevant rates and ensure compliance with updated standards set by the Department of Health.
Key Provisions
The Private Health Insurance (Complying Product) Amendment Rules 2015 (No. 2) primarily amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2010 (No. 2) by changing the patient contribution payable per night for nursing-home type patients (NHTP) at public hospitals in the Australian Capital Territory (ACT). This amendment reflects recent increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates), effective from 20 March 2015. The amendment is detailed in the Schedule to the Amendment Rules, specifically altering Paragraph 8A(3)(a) of the Principal Rules to update the NHTP contribution rate at public hospitals in the ACT from $55.80 to $56.90 per night (Items 1, 2).
The obligations imposed by these Amendment Rules primarily pertain to private health insurers and their compliance with the updated patient contribution rates. Insurers must adhere to the new rates specified in the amended Rule 8A for NHTPs in public hospitals in the ACT, ensuring that their payments align with the legislative requirements. These obligations are crucial for maintaining the integrity of the private health insurance system and ensuring that benefits are distributed in accordance with the legislative framework (Items 1, 3).
Failure to comply with the provisions of these Amendment Rules could result in various civil or criminal consequences. While the specific offences and penalties are not detailed in the Explanatory Statement, non-compliance with private health insurance regulations generally could lead to enforcement actions by the Australian Prudential Regulation Authority (APRA) or other relevant regulatory bodies. This might include fines, corrective measures, or other penalties as stipulated under the Private Health Insurance Act 2007 and related regulations. The severity of the penalties can depend on the nature and extent of the non-compliance, with potential maximum penalties varying based on the specific regulatory provisions breached (Items 3, 4).