Commonwealth of Australia Explanatory Memoranda

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HEALTH LEGISLATION AMENDMENT (MEDICARE AND PRIVATE HEALTH INSURANCE) BILL 2003

2002-2003

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA



THE SENATE

HEALTH LEGISLATION AMENDMENT (MEDICARE AND PRIVATE HEALTH INSURANCE) BILL 2003

SUPPLEMENTARY EXPLANATORY MEMORANDUM



Amendments and Requests for Amendments and New Clauses to be Moved on Behalf of the Government

(Circulated by authority of the Minister for Health and Ageing,
the Hon Tony Abbott, MP)

HEALTH LEGISLATION AMENDMENT (MEDICARE AND PRIVATE HEALTH INSURANCE) BILL 2003

OUTLINE

The amendments and new clauses to the Health Legislation Amendment (Medicare and Private Health Insurance) Bill 2003 (the Bill) to be moved on behalf of the Government will:

• amend the title of the Bill to the Health Legislation Amendment (Medicare) Bill 2003;
• amend the clauses in the Bill relating to the safety-net for cumulative costs for out of hospital medical services to provide for:

- a FTB(A) safety-net for families in receipt of Family Tax Benefit (A) covering 80% of the out of hospital out-of-pocket costs above $500 per family incurred for Medicare services in a calendar year; and
- an extended general safety-net for all other people that covers 80% of the out of hospital out-of-pocket costs above $1000 per family or individual incurred for Medicare services in a calendar year.

It is not proposed to proceed with the clauses in the Bill relating to:
• private health insurance coverage of out-of-pocket costs for out of hospital Medicare services; and
• the assignment of benefits for general practitioners participating in the General Practitioner Access Scheme.

FINANCIAL IMPACT STATEMENT

The measures in the Bill, as proposed by these amendments, will have a total cost over 2003-04 and the following three years of $266.3 million.

Note: This includes payments to patients and administrative costs.

NOTES ON AMENDMENTS

Amendments 1 and 2 amend the title of the Bill to the Health Legislation Amendment (Medicare) Bill 2003 in both the long title and the short title of the Bill, respectively.

Amendment 3 omits Clause 2 in its entirety and substitutes a new Clause 2. The effect of this amendment is that the Bill commences on the date of Royal Assent.

Amendment 4 acknowledges that it is not proposed to proceed with Schedule 1, which previously proposed a private health insurance safety-net scheme for out of hospital medical services.

Amendment 5 amends the title of Schedule 2 of the Bill to “Schedule 2 – Extended safety-net” to reflect the safety-net now proposed.

Amendment 6 inserts three new definitions. New subclause 2A defines the extended general safety-net amount as $1000. New subclause 2B defines a Family Tax Benefit (A) [FTB(A)] family for the purpose of the Medicare safety-net as a family in receipt of family tax benefit under sections 23 or 24 of the A New Tax System (Family Assistance)(Administration) Act 1999. New subclause 2C defines the FTB(A) safety-net amount as $500.

Amendment 7 includes a reference, in paragraph 10AC(6)(a) of the Health Insurance Act 1973 which provides for the application of the existing MBS safety-net, to take account of the new subsection 20(2A) to be inserted by Amendment 21.

Amendment 8 changes the heading of clause 10ACA from “Concessional safety-net - families with concessional members” to “Extended safety-net - families”.

Amendment 9 deletes existing paragraphs 10ACA(4)(e) and (f) of the Bill and replaces them with a new paragraph 10ACA(4)(e) that expands the application of the safety-net to claims made by concessional persons, FTB(A) families and other persons.

Amendment 10 deletes the reference to “the concessional safety-net” in proposed subsection 10ACA(5) and refers to the other safety-nets now included, by cross reference to new paragraph 10ACA(4)(e) inserted by Amendment 9.

Amendments 11 and 12 amend proposed subsection 10ACA(5) to expand the application of the subsection to the safety-nets now proposed.

Amendments 13 and 14 expand the application of proposed subsection 10ACA(6) to include the concessional safety-net, the FTB(A) safety-net and the extended general safety-net.

Amendments 15, 16 and 17 delete references to “concessional” in proposed subsections 10ACA(7) and (8).

Amendment 18 includes a reference, in proposed paragraph 10ACA(9), to new subsection 20(2A) to be inserted by Amendment 29.

Amendment 19 proposes to include a reference, in paragraph 10AD(4)(a) of the Health Insurance Act 1973, which provides for the application of the existing safety-net to individuals, to take account of the new subsection 20(2A) to be inserted by Amendment 29.

Amendment 20 changes the heading of clause 10ADA from “Concessional safety-net - individuals” to “Extended safety-net - individuals”.

Amendment 21 omits proposed paragraphs 10ADA(5)(e) and (f) and substitutes a new proposed paragraph 10ADA(5)(e) to provide for the time at which proposed section 10ADA applies to a claim for a benefit.

Amendment 22 deletes the reference to “concessional” in proposed subsection 10ADA(6) to expand the application of the subsection to the safety-nets now proposed.

Amendments 23, 24 and 25 delete references to “concessional” in proposed subsections 10ADA(6) and (8), which are no longer applicable.

Amendment 26 includes a reference, in proposed paragraph 10ADA(9), to new subsection 20(2A) to be inserted by Amendment 29.

Amendment 27 provides for the indexation of the FTB(A) safety-net amount and the extended general safety-net amount by including references to both safety-nets in proposed subsection 10A(1)(d) of the Health Insurance Act 1973 and sets the first indexation to occur in January 2005.

Amendment 28 provides for the indexation day and the reference quarter for the FTB(A) safety-net amount and the extended general safety-net amount by their inclusion in the CPI Indexation table in subsection 10A(2) of the Health Insurance Act 1973.

Amendment 29 proposes to add five new clauses to the Bill.

New clause 19A proposes to amend subsection 20(1A) of the Health Insurance Act 1973 to include a reference to new subsection 20(2A).

New clause 19B proposes to inserts a new subsection 20(2A) to the Health Insurance Act 1973. New subsection 20(2A) will provide that where a claim for a safety-net benefit is only partly paid, the benefit for the unpaid part of the account can only be paid by means of a cheque drawn in favour of the doctor, and that the claimant may also be paid part of the benefit if the full benefit is not paid to the doctor.

New clauses 19C, 19D and 19E propose to amend paragraphs 20(3)(a), 20(4)(a) and 20(4)(b) of the Health Insurance Act 1973 to include references to new subsection 20(2A), inserted by new clause 19B.

Amendment 30 omits the existing Application clause of the Bill and substitutes a new Application clause.

The new Application clause provides that the Minister must, within six months of Royal Assent publish a notice specifying the date of commencement of the new extended safety-net, which must itself be within six months of Royal Assent. This will enable the Minister to set the commencement date for an earlier time if the systems required to administer the extended safety-net are in place earlier than expected.

If the Minister does not publish a notice, the new extended safety-net commencement day is taken to commence on the day after the end of the six months of the date of Royal Assent.

Proposed subclause 20(3) provides that expenses incurred before the commencement date may be taken into account in determining whether a safety-net applies. That is, in calculating whether the applicable safety-net out-of-pocket amount ($500 or $1000) has been reached.

Amendment 31 acknowledges that it is proposed not to proceed with Schedule 3, which provided for the General Practice Access Scheme and the assignment of benefit with gap payment by practices participating in the General Practice Access Scheme.

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