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Publications |
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Topics in this section Private Patients' Hospital Charter Insure? Not Sure? (pdf format) Operations Of The Private Health Insurers Annual Report Financial and Statistical tables of past Operations Annual Reports |
PublicationsPrivate Health Insurance Administration CouncilReport of Operations 2007-08Council CertificationCouncil certifies that it is responsible under section 9 of the Commonwealth Authorities and Companies Act 1997 (CAC Act) for the preparation and content of the report of operations in accordance with the Finance Minister’s Orders. This certification is given under Clause 4, Schedule 1 of the CAC Act. As Commissioner of the Private Health Insurance Administration Council and a Director under Clause 4 of the CAC Act, I hereby declare this report has been made in accordance with a resolution of the Council on 2 September 2008.
James Dominguez CBE AM 2 September 2008
During the year PHIAC saw a marked increase in the level of transactional activity in the sector as a number of funds reassessed their business opportunities and commercial structures. This resulted in one fund becoming an ASX listed company, a first for the industry. Another fund, after carefully considering a similar option, decided to merge with a large overseas-owned fund. PHIAC as the industry regulator played an important role at the centre of these transactions ensuring that the interests of contributors to funds were properly protected. These deals—together with others then unsignalled but now announced to the market— put considerable pressure on Members of the Council and staff as we worked through the complex range of statutory and general issues they created. The activity seems set to continue. As well, the Council and Secretariat of PHIAC spent much of the year substantially completing the round of fund reviews which was initiated in 2002. These reviews have provided the Council with an opportunity to examine the details of operations of the 38 operating registered insurers. This has meant that as financial conditions have become more volatile, the Council would seem to be well placed—based on evidence—to be assured of the general prudential health of the regulated funds. In the next twelve months, PHIAC will be undertaking a range of second round reviews with all funds to ensure inter alia that issues raised for their consideration in the first round have been addressed. Prudential positionThe private health insurance industry remains in generally sound financial condition. As this report, and the Council’s report on operations for the 2007–08 financial year will reveal, the regulated funds have completed the year in generally acceptable (or better) financial condition with no formal intervention required by PHIAC. The industry remains diverse with funds spread around Australia and varying in size from the very large to the very small. Despite this, the traditional measures of financial soundness —capital adequacy and solvency—continue to show that private health cover for more than 9.5 million Australians can be effectively delivered in a variety of ways by a variety of funds. In the 2008 Budget the Government announced that it proposed to introduce legislation to lift the threshold points for the Medicare Levy Surcharge. The MLS operates to impose an additional Medicare Levy of 1% for taxpayers who earn over a certain income threshold and do not hold private health insurance. Treasury forecasts issued with the budget anticipated a substantial reduction in fund memberships as a result of the changes. At the time of writing the future of the Government’s proposals is still uncertain however. PHIAC will continue to take a close interest in the MLS issue as it proceeds through Parliament and any subsequent implementation. MembershipPHIAC continued to monitor and publish information about fund membership. At the end of the financial year, the number of persons having hospital coverage increased in the June 2008 quarter by 57,058, the twelfth consecutive quarter of growth. As a result, at that date 9,533,979 persons were covered by hospital insurance, representing 44.7% of the population. This is the highest number expressed as a proportion of the population, since 2001. Over the year, the growth in fund memberships was strongest in the states of Western Australia (2.1 percentage points) and Queensland (1.5 percentage points). Council MembershipDuring the year, my colleagues John McGee and Rebecca Davies were reappointed by the Minister of Health and Ageing to their positions as Board Members of the PHIAC Council. I congratulate them both for their reappointment. SummaryThe year has been another busy and active one for PHIAC and its staff. We can reflect on another year of growth for the industry coupled with generally good outcomes for contributors. Service standards were kept high and product innovation, particularly following the Broader Health Cover changes of the new Act, has improved. Finally, I should take this opportunity to welcome the new CEO Shaun Gath. Shaun joined PHIAC from a major national law firm where he had been a partner. He has had extensive experience in the Australian healthcare business. I also wish to formally acknowledge the very important contribution of Mrs Gayle Ginnane who retired from the role of CEO of PHIAC in April. As the inaugural CEO Gayle served with distinction in that role for twelve years during which time she won the respect and confidence of all who came into contact with her. James Dominguez CBE AM
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Last modified: 8 October, 2008 |
