EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health
Private Health Insurance Act 2007
Private Health Insurance (Complying Product) Amendment Rules 2016 (No. 5)
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 2016 (No. 5)
(the Amendment Rules) amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2015 (the Principal Rules) which commenced on 1 July 2015.
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 each State and Territory.
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) of the Principal Rules by amending the NHTP contribution rate at public hospitals in each State and Territory. 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 2016.
Details
Details of the Amendment Rules are set out in the Attachment.
Consultation
On 29 August 2016, 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, Queensland, South Australia, Tasmania, Victoria, and Western Australia have advised that they will increase the NHTP contribution rates in their public hospitals from 20 September 2016. The Australian Capital Territory and the Northern Territory have advised that they will not be increasing the NHTP contribution rates in their public hospitals at this time.
The Amendment Rules commence on 20 September 2016.
The Amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003.
Authority: Section 333-20 of the
Private Health Insurance Act 2007
MEDICAL BENEFITS DIVISION
DEPARTMENT OF HEALTH
SEPTEMBER 2016
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLYING PRODUCT) AMENDMENT RULES 2016 (No. 5)
Section 1 Name of Rules
Section 1 provides that the title of the Rules is the Private Health Insurance (Complying Product) Amendment Rules 2016 (No. 5) (the Amendment Rules).
Section 2 Commencement
Section 2 provides that the Amendment Rules are to commence on 20 September 2016.
Section 3 Amendment of Private Health Insurance (Complying Product) Rules 2015
Section 3 provides that the Schedule to the Amendment Rules amends the Private Health Insurance (Complying Product) Rules 2015 (the Principal Rules) which commenced on
1 July 2015.
Schedule – Amendments
Item 1 – Part 2, Paragraph 8A(3)
Paragraph 8A(3)(a)(i) of the Principal Rules set out the patient contribution for privately insured NHTPs at public hospitals.
Overview
The Private Health Insurance (Complying Product) Amendment Rules 2016 (No. 5) were enacted to amend the Private Health Insurance (Complying Product) Rules 2015 under the authority of Section 333-20 of the Private Health Insurance Act 2007. These amendments were introduced to adjust the patient contribution payable per night for nursing-home type patients in public hospitals across various states and territories, in response to increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance. This change aims to ensure that the patient contributions remain aligned with current socio-economic conditions, reflecting the updated pension and rental assistance rates. The rules were developed after consultation with state and territory governments, and they came into effect on 20 September 2016. The policy objective is to maintain fair and updated financial contributions for privately insured patients receiving treatment in public hospitals.
Scope and Application
The Private Health Insurance (Complying Product) Amendment Rules 2016 (No. 5) amends the Private Health Insurance (Complying Product) Rules 2015 under the authority provided by section 333-20 of the Private Health Insurance Act 2007. These rules apply to private health insurers that offer hospital cover, affecting the patient contribution rates for nursing-home type patients (NHTP) in public hospitals across Australia. The amendments specifically address the patient contribution payable per night for NHTPs at public hospitals in each state and territory, reflecting changes in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates) effective from 20 September 2016. The amendment applies to six states and territories that have agreed to adjust their NHTP contribution rates, while the Australian Capital Territory and the Northern Territory have opted not to increase their rates at this time. These rules are instrumental in ensuring that the private health insurance system remains aligned with broader social security adjustments, impacting the financial obligations of both insurers and policyholders.
Key Provisions
The Private Health Insurance (Complying Product) Amendment Rules 2016 (No. 5) amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2015. These amendments adjust the patient contribution payable per night for nursing-home type patients (NHTP) at public hospitals in various states and territories. Specifically, the amendments reflect the updated Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates) that came into effect on 20 September 2016.
Under these changes, Rule 8A(3) of the Principal Rules, which sets the patient contribution for privately insured NHTPs, has been modified. The new rates are intended to align with the updated social security rates, ensuring that the contributions remain fair and reflective of current economic conditions. The changes are set out in the Schedule to the Amendment Rules and apply to the patient contributions for NHTPs at public hospitals in New South Wales, Queensland, South Australia, Tasmania, Victoria, and Western Australia. Notably, the Australian Capital Territory and the Northern Territory have decided not to increase their NHTP contribution rates at this time.
The obligations imposed by these amendments primarily affect private health insurers and their insured customers who receive treatment as NHTPs in public hospitals. Insurers must now adhere to the new contribution rates specified in the amended Rule 8A(3) for the affected states and territories. Customers, particularly those receiving NHTP care, will see changes in their out-of-pocket expenses depending on their state or territory of residence.
Breaching the requirements set out in these Amendment Rules could result in non-compliance with the Private Health Insurance Act 2007. While the Amendment Rules themselves do not specify penalties for non-compliance, breaches of the broader provisions of the Act may attract civil or criminal penalties. For instance, under section 333 of the Act, failure to comply with the rules could lead to enforcement actions by the Australian Prudential Regulation Authority (APRA), including fines. The exact penalties would depend on the nature and severity of the breach, but they could potentially include significant financial penalties for private health insurers.