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. 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 2017 (No. 3)
(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 at private hospitals in Australia.
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) and 8A(3)(b) 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 2017.
Details
Details of the Amendment Rules are set out in the Attachment.
Consultation
On 22 August 2017, States and Territories were asked whether they would be increasing the NHTP contribution 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 2017 to $59.20. The Australian Capital Territory and the Northern Territory have advised that they are not increasing their NHTP contribution rates at this time.
The Amendment Rules commence on 20 September 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. 3)
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. 3) (the Amendment Rules).
Section 2 Commencement
Section 2 provides that the Amendment Rules are to commence on 20 September 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 General, Paragraph 8A Benefit requirement – nursing home type patients (3)(a)
Paragraph 8A(3) 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 all states except the Australian Capital Territory and the Northern Territory.
Item 2 – Part 2 General, Paragraph 8A Benefit requirement – nursing home type patients (3)(b)
Paragraph 8A(3) of the Principal Rules set out the patient contribution for privately insured NHTPs at private hospitals.
Item 2 of the Schedule of the Amendment Rules amends Part 2, Paragraph 8A(3)(b) of the Principal Rules by increasing the NHTP contribution at private hospitals in Australia.
Overview
The Private Health Insurance (Complying Product) Amendment Rules 2017 (No. 3) were enacted to address discrepancies in patient contributions for nursing-home type patients (NHTP) within the private health insurance framework. This legislation, issued under the authority of the Minister for Health, amends the Private Health Insurance (Complying Product) Rules 2015, which were established under the Private Health Insurance Act 2007. The primary objective of these amendments is to align the patient contributions for NHTPs at both public and private hospitals with the updated Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance, which came into effect on 20 September 2017. This adjustment ensures that the financial burden on patients receiving NHTP care is consistent with changes in government-set rates, thereby maintaining fairness and accessibility within the healthcare system.
Scope and Application
The Private Health Insurance (Complying Product) Amendment Rules 2017 (No. 3) amend the Private Health Insurance (Complying Product) Rules 2015, which are subordinate legislation under the Private Health Insurance Act 2007. The Amendment Rules adjust the patient contribution rates for nursing home type patients (NHTP) at both public and private hospitals across Australia, aligning these rates with increases in the Adult Pension Basic Rate and the Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates) that came into effect on 20 September 2017. The Amendment Rules apply to private health insurers and their insured customers who are classified as NHTPs and are receiving treatment in public or private hospitals. This amendment does not affect the Australian Capital Territory and the Northern Territory, where the NHTP contribution rates have not been increased. The changes were made following consultation with the relevant states and territories, and the Amendment Rules are in force from 20 September 2017.
Key Provisions
The Private Health Insurance (Complying Product) Amendment Rules 2017 (No. 3) make adjustments to the patient contribution payable per night for nursing-home type patients (NHTP) at public hospitals in most states and at private hospitals across Australia. These changes are primarily driven by the need to align with the 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 2017. The amendments directly modify Rule 8A of the Private Health Insurance (Complying Product) Rules 2015 (Principal Rules) to reflect these updated rates.
These rules impose specific obligations on private health insurers, requiring them to adjust the benefit payments for NHTPs at both public and private hospitals in accordance with the new contribution rates. The rules mandate that insurers pay the hospital’s charge for NHTPs, less the patient contribution amount as specified in the amended Rule 8A. This ensures that the financial responsibility of the patient aligns with the updated rates, thereby maintaining the integrity of the private health insurance scheme.
Failure to comply with the provisions of these Amendment Rules can lead to penalties and other legal consequences. While the specific penalties are not detailed in the explanatory statement, breaches of the Private Health Insurance Act 2007 can typically result in substantial fines and other enforcement actions. The exact penalties can vary depending on the nature and severity of the breach but are intended to ensure adherence to the legislative requirements.
The Amendment Rules come into effect on 20 September 2017, as stipulated in Section 2 of the rules. This commencement date ensures that the adjustments to the patient contribution rates are implemented in line with the changes in the Pension and Rental Assistance Rates. By amending the Principal Rules, the Amendment Rules aim to provide clarity and consistency in the application of patient contributions across different types of hospitals and jurisdictions.