Mitch Fifield voted very strongly against decreasing the private health insurance rebate

The majority voted in favour of a motion to read the bill for a third time. This means that the majority agree with the bill and want it to be passed in the Senate. Since the bill has already passed in the House of Representative, it can now become law.(Read more about the stages that a bill must pass through to become law here. )

Background to the bill

The bill was introduced to make two changes to the private health insurance rebate.

The first change is to remove the rebate from the Lifetime Health Cover ('LHC') loading component of affected private health insurance premiums. The LHC is a financial penalty on those who delay taking out private health insurance in the form of a two per cent loading on their premium for each year after their 31st birthday they delay purchasing cover. Currently, people with an LHC loading receive the private health insurance rebate on the total cost of their premium (i.e. the premium plus any LHC loading). Schedule 1 seeks to change this so that people with an LHC loading only receive the rebate to the cost of their premium, not including the LHC loading.(More information about the LHC loading and the effect of this bill is available in its bills digest. )

The second change is to end the Incentive Payments Scheme which allows people to claim the rebate as a direct payment. Currently there are three ways that people can claim the private health insurance rebate: (1) through the Premiums Reduction Scheme, which is an upfront discount on the premium offered by the health insurer; (2) as a tax offset claimed through the Australian Taxation Office; (3) through the Incentive Payment Scheme, which is a direct payment from a Medicare office. This bill would remove the latter option.(Read more about the Incentive Payments Scheme and the bill generally in its bills digest.)

The majority voted in favour of a motion that schedule 1 stand as printed, which means that the schedule will remain unchanged. The motion was put in response to a motion introduced by Liberal Senator Concetta Fierravanti-Wells that the schedule be opposed.

Schedule 1 is the part of the bill that is intended to remove the private health insurance rebate from the Lifetime Health Cover ('LHC') loading component of affected private health insurance premiums.

The LHC is a financial penalty on those who delay taking out private health insurance in the form of a two per cent loading on their premium for each year after their 31st birthday they delay purchasing cover. Currently, people with an LHC loading receive the private health insurance rebate on the total cost of their premium (i.e. the premium plus any LHC loading). Schedule 1 seeks to change this so that people with an LHC loading only receive the rebate to the cost of their premium, not including the LHC loading.(More information about the LHC loading and the effect of this bill is available in its bills digest. )

Background of the bill

As well as removing the private health insurance rebate from the Lifetime Health Cover loading component of affected private health insurance premiums, the bill was also introduced to end the Incentive Payments Scheme which allows people to claim the rebate as a direct payment.

Currently there are three ways that people can claim the private health insurance rebate: (1) through the Premiums Reduction Scheme, which is an upfront discount on the premium offered by the health insurer; (2) as a tax offset claimed through the Australian Taxation Office; (3) through the Incentive Payment Scheme, which is a direct payment from a Medicare office. This bill would remove the latter option.(Read more about the Incentive Payments Scheme and the bill generally in its bills digest.)

The majority voted against a motion introduced by Liberal Senator Concetta Fierravanti-Wells, which means that it was unsuccessful.

The motion was: "That the Fairer Private Health Insurance Incentives Bill 2012 and two related bills be referred to the Economics Legislation Committee." Senator Fierravanti-Wells explained that she introduced this motion because "this government has absolutely no mandate whatsoever to pass these bills".(Read Senator Fierravanti-Wells' full explanation of the motion and the related debate here. )

Background to the bills

The Fairer Private Health Insurance Incentives Bill 2012 was introduced along with the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012. These bills were introduced as a package to reduce the private health insurance rebate and increase the Medicare levy surcharge for certain taxpayers. To this end, the bills:

• create three private health insurance tiers with different levels of private health insurance rebate to reduce the amount of rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives Bill 2012 in its bills digest.

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• increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 in its bills digest.

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• increase the rate of Medicare levy surcharge for taxpayers who do not have complying health insurance and whose income (including reportable fringe benefits) for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012 in its bills digest.)

The majority voted against a motion that the bills be read for a second time.(Read more about the stages that a bill needs to pass through before becoming law here. ) This means that the majority disagreed with the main idea of the bills and that they will not be proceeding.

Background to the bills

The three bills are:

• the Fairer Private Health Insurance Incentives Bill 2009;
• the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009; and
• the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2009.

They were introduced as a package to create three private health insurance tiers in order to:

• reduce the amount of private health insurance rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the proposed reduction of the rebate in the bills digest (419 KB) for the Fairer Private Health Insurance Incentives Bill 2009.

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• increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the proposed increase in the rate of Medicare levy surcharge the bills digest (339 KB) for Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and the bills digest (346 KB) for the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2009.)

The majority voted against amendments introduced by Greens Senator Kerry Nettle.

Senator Nettle explained that these amendments "abolish the private health insurance rebate". She argued that this money used to pay this rebate "should be redirected and instead spent on our public healthcare system".(Read Senator Nettle's full explanation of these amendments here. )

Because the majority voted against these amendments, they were unsuccessful.

Background to the bill

The bill was introduced to allow the federal government to sell its interest in Medibank Private Limited and allow Medibank to operate on a “for profit” basis. The Coalition Government plans to do this after the 2007 election, should it be re-elected.(Read more about this privatisation proposal on Wikipedia here and on the ABC's World Today program here.)

The majority voted against amendments introduced by Greens Senator Kerry Nettle.

Senator Nettle explained that these amendments "abolish the private health insurance rebate". She argued that this money used to pay this rebate should be "spent on ensuring that we have a quality public health system that all Australians can use".(Read Senator Nettle's full explanation of these amendments here. )

Because the majority voted against these amendments, they were unsuccessful.

Background to the bill

The bill expands the powers of the Private Health Insurance Ombudsman when dealing with complaints and conducting investigations on their own initiative or at the Minister’s request, particularly in relation to health care providers or brokers. It also allows additional time for Medicare Australia to provide the Australian Taxation Office with information regarding private health insurance rebates.(Read more about the bill in its bills digest (84.4 KB).)