EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health
Private Health Insurance Act 2007
Private Health Insurance (Complying Product) Amendment Rules 2017 (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 2017 (No. 2) (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 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)(i) 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 2017.
Details
Details of the Amendment Rules are set out in the Attachment.
Consultation
On 3 March 2017, 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 and Tasmania increased the NHTP contribution rates in their public hospitals from 20 March 2017. The ACT elected to update their rates on 1 July 2017.
The Amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003.
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLYING PRODUCT) AMENDMENT RULES 2017 (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 2017 (No. 2) (the Amendment Rules).
Section 2 Commencement
Section 2 provides that the Amendment Rules are to commence on 1 July 2017.
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)(a)(i)
Paragraph 8A(3)(a)(i) 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)(i) of the Principal Rules by increasing the NHTP contribution at public hospitals in the Australian Capital Territory (ACT).
Overview
The Private Health Insurance (Complying Product) Amendment Rules 2017 (No. 2) were enacted to amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2015, which were themselves introduced under the authority of the Private Health Insurance Act 2007. The 2017 amendment was enacted to address the need for updating the patient contribution rates for nursing-home type patients (NHTP) at public hospitals in the Australian Capital Territory (ACT), in alignment with the increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates). This change was made necessary due to the legislative requirement to ensure the patient contribution amounts reflected current economic conditions and social support rates. The policy objective behind these amendments is to maintain the financial sustainability of private health insurance arrangements by ensuring the patient contributions are consistent with broader social security rates.
Scope and Application
The Private Health Insurance (Complying Product) Amendment Rules 2017 (No. 2) pertains to entities involved in private health insurance within Australia, specifically those offering products that comply with the requirements under the Private Health Insurance Act 2007. These Amendment Rules, which amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2015, are directed towards private health insurers and their compliance with the patient contribution rates for nursing-home type patients (NHTP) receiving treatment in public hospitals. The rules apply to the Australian Capital Territory (ACT), adjusting the patient contribution rates to align with increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates). These amendments are designed to ensure that the patient contribution rates are updated to reflect changes in relevant social security rates, thus maintaining consistency with broader social policy adjustments. The Amendment Rules came into effect on 1 July 2017 and are intended to operate in conjunction with the overarching provisions of the Private Health Insurance Act 2007.
Key Provisions
The Private Health Insurance (Complying Product) Amendment Rules 2017 (No. 2) primarily amend Rule 8A of the Private Health Insurance (Complying Product) Rules 2015 (Principal Rules) (Section 3). The purpose of these amendments is to adjust the patient contribution payable per night for nursing-home type patients (NHTP) at public hospitals in the Australian Capital Territory (ACT) (Explanatory Statement). Specifically, Rule 8A sets the patient contribution for NHTPs, which is the amount that private health insurers are required to pay for each day of NHTP hospital treatment at a hospital (Principal Rules, Rule 8A). This amount is restricted to the hospital’s charge less the patient contribution amount (Principal Rules, Rule 8A(3)(a)(i)).
The Amendment Rules impose specific obligations on private health insurers regarding the patient contributions for NHTPs at public hospitals in the ACT. Private health insurers must now comply with the amended rates set out in the Schedule of the Amendment Rules, which reflect the 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 2017 (Schedule, Item 1). These rules ensure that the patient contribution for NHTPs is aligned with the updated rates, thereby affecting the amount that private health insurers pay for hospital treatment of NHTPs in the ACT.
Failure to comply with the amended patient contribution rates set out in the Amendment Rules may lead to civil or administrative consequences. Although the Explanatory Statement does not detail specific penalties, breaches of the rules may generally result in fines or other penalties as prescribed under the Private Health Insurance Act 2007. The exact penalties would depend on the nature and severity of the breach, and could include financial penalties, compliance orders, or other corrective measures imposed by the relevant authorities.