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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 2007-08Performance - Outcomes and OutputsOutcomesPHIAC reports under its own outcome in the portfolio budget statements: ‘The prudential safety of registered private health insurance funds, the best interest of members of those funds, and a competitive level of private health insurance premiums, are efficiently regulated to support a viable industry.’ PHIAC’s core functions are to monitor and regulate the private health insurance industry, and to provide information to Government and other stakeholders on private health insurance membership and utilisation, risk equalisation and gap cover. The performance of its functions requires the collection of financial and statistical returns from each PHI on both a quarterly and an annual basis. Output Group 1 – Information to Government and other stakeholders relevant to private health insurancePHIAC receives quarterly statistical reports from the private health insurers. From these reports PHIAC produces the following publications: Quarterly PublicationsPHIAC produces the following reports on a quarterly basis:
With the exception of the PHIAC B report, these publications can be found on PHIAC’s website. The hospital and general treatment statistics report the number and proportion of persons with hospital insurance and with general treatment insurance. The PHIAC A report aggregates, on a state basis, detailed information on:
The PHIAC B report is distributed to private health insurers only. It provides the information contained in the PHIAC A report by individual fund. PHIs are also provided with statistical reports comparing their fund against the industry. PHIAC collects gap data from PHIs and produces this data in a quarterly report called Quarterly Gap Payment and Medical Benefit Statistics. The document is available on the PHIAC website. PHIs are allowed to pay a benefit in excess of the Medicare Benefits Schedule (MBS) fee for medical services where conditions are met through contracts or other agreements. This allows funds to provide no gap or known gap in-hospital medical services to insured patients. The statistical trends publications contain data on private health insurance membership and benefits paid for hospital and general treatment in Australia since September 1997. PHIAC’s quarterly reports are produced and disseminated within four weeks of the industry reporting deadline. In the December quarter 2005, PHIAC began a new prostheses data collection. PHIs provide quarterly data on benefits and charges for no gap prostheses and gap permitted prostheses by major prostheses categories. The intention of the prostheses data collection is to assist in monitoring the effect of the introduction of the prostheses arrangements. Medical Gap DataPHIAC began this medical gap data collection in the September quarter 2005. The data is by major specialty group and comprises benefits, charges and out of pocket (gap) expenses. The data is required to be provided quarterly to PHIAC. PHIAC is collecting this quarterly medical gap information to facilitate consistent reporting and analysis of medical gap data. Annual PublicationsPHIAC produces the following reports on an annual basis:
The PHIAC annual report is prepared in accordance with section 9 of the CAC Act and sets out PHIAC’s functions, responsibilities and activities under that legislation. It must be provided to the Minister for Health and Ageing by 15 October each year. The Minister must table the report as soon as practicable. The PHIAC annual report for 2006–07 was tabled out of session on 19 October 2007. Under section 264–15 of the PHI Act, the Council must, as soon as practicable after 30 September each year, give the Minister for Health and Ageing a report, for presentation to the Parliament, on the operations of PHIs during the financial year ending on 30 June in that year. This report includes financial results for each organisation, membership and benefits paid and usage of health insurance in Australia. This report for 2006–07 was tabled out of session on 14 December 2007. Section 34C of the Acts Interpretation Act 1901 contains extra rules about annual reports. The annual membership survey reports by place of residence the number of privately insured persons covered for hospital benefits by state and territory at the end of the calendar year. PublicationsInsure? Not Sure?This information brochure has been prepared by PHIAC to explain the Australian health system to consumers in simple terms and to assist them to make informed choices about how best to meet their health insurance needs. The publication:
Also included are suggested questions consumers should ask about their cover, and a glossary of common terms. The publication was previously updated to provide information pertaining to the increased rebate available for senior Australians, new provisions relating to Lifetime Health Cover and new information provided by the Department of Health and Ageing on prostheses. During 2006, the updated publication was re-printed in bulk and made available to stakeholders for purchase and distribution. The publication was further reviewed and reprinted in 2008 to incorporate the changes to the Lifetime Health Cover provisions and other new or different arrangements that PHIs can offer, as a result of the new legislation introduced in April 2007. Responding to a request from a stakeholder, PHIAC arranged to have the brochure translated and provided in Mandarin. The Private Patients’ Hospital CharterThe Private Patients’ Hospital Charter is produced by the Department of Health and Ageing as a guide to what it means to be a private patient and what patients can expect from their doctors, the hospital and their health insurer. By highlighting the types of information that may assist patients to manage their health care, the charter aims to help individuals achieve optimal results as private patients. PHIAC makes copies of the charter available to members of the public at its office and by mail. Requests for large quantities are referred to the Department of Health and Ageing. PHIAC CircularsPHIAC circulars are released periodically, as required, on issues of importance to the private health insurance industry. Circulars are available from the PHIAC website and the PHIAC office. Solvency and Capital Adequacy StandardsThe Solvency and Capital Adequacy Standards form part of the broader Private Health Insurance (Health Benefits Funds Administration) Rules 2007 and are published on the PHIAC website. Customer Service CharterPHIAC’s Customer Service Charter sets out PHIAC’s role, functions and objectives, and explains how PHIAC can be of assistance to its stakeholders:
The charter also sets out what can be expected of PHIAC, what information PHIAC can provide, customer service standards, and the rights and responsibilities of PHIAC’s stakeholders. In addition, it provides steps that can be taken if PHIAC does not meet the standard of service set out in the charter. The charter was last revised in 2007, in consultation with stakeholders and other interested parties. The next review is scheduled for 2010. As outlined in the charter, PHIAC maintains a complaints file. The charter is available on the PHIAC website and from the PHIAC office. PHIAC was not the subject of any complaint during the 2007–08 financial year. Internet PublicationsPHIAC maintains a website to make available to consumers and other industry stakeholders the information it collects and disseminates as part of its monitoring and regulatory activities. All publications, with the exception of the PHIAC B report, are available on the PHIAC website. Statistics are available in excel format, with other publications available in pdf and html format. All statistics are updated on the PHIAC website upon their public release. In addition to its published statistical data, PHIAC provides the following information on its website:
To assist with navigation within its website, PHIAC’s site incorporates a search facility. Private Health Insurer Contact InformationUp-to-date information on all PHIs is available on the PHIAC website. PHIAC provides links to those funds with websites of their own. The information available on funds includes trading names, registered names, open and restricted access classification, and profit status. Private Health Insurance Ombudsman (PHIO) WebsiteThe Private Health Insurance Ombudsman has made additional improvements in functionality to the private health insurance website that it manages. The information from consumers and stakeholders that is collected via the website, is provided to PHIAC on a regular basis and assists PHIAC in monitoring any significant movements in fund memberships. The website is privatehealth.gov.au. Output Group 2 – Regulatory Activity
Financial MonitoringFunds are required to provide quarterly and annual financial returns to PHIAC. Through these reports PHIAC monitors the financial results, solvency and capital adequacy of each fund. On a quarterly basis PHIAC provides each fund with a report that compares its operating performance with that of the industry as a whole, and the size segment in which it operates. This information is provided only to the PHIs. PHIAC also provides a comparative report on membership and benefits statistics for the industry as a whole. Program for the Review of Private Health InsurersA program for the review of PHIs was developed as part of PHIAC’s ‘no surprises’ approach to regulation. The objective of the reviews is to enable PHIAC to gain a more detailed understanding of PHIs than is available from the financial reports provided by the funds throughout the year. The reviews assist PHIAC in determining the most appropriate manner in which the regulation of a fund ought to be conducted, and to enable corrective action to be taken where necessary and appropriate, in the interests of policy holders. APRA has continued to provide support to PHIAC by way of its supervision methodology for general insurance as well as assisting in providing specialist insurance supervisors to assist in the fund reviews. PHIAC is further developing its review program for the coming years, with subsequent rounds of reviews being more issues-focussed. PHIAC is constantly reviewing its staffing levels and skills base to ensure that it has the optimum number of appropriately skilled staff to manage its functions effectively. More detailed information on the fund review program can be found on page 15. Industry ModelPHIAC has further developed and added to its industry model that predicts the forward prudential position of PHIs. The initial model established a greater efficiency and improved accuracy in monitoring the industry financials. The model currently uses a combination of historical and prospective data obtained primarily from the insurers’ quarterly reports. Recent developments to the model have also introduced sub components (satellite models) to the modelling framework that has expanded the modelling capability to aid analyses in determining the extent to which each fund’s capital position is prudentially sound. The expanded modelling framework provides a structural foundation and test bed to investigate the alternative directions as they are proposed during the Solvency and Capital Adequacy Standards review process. Solvency and Capital Adequacy StandardsThe Solvency and Capital Adequacy Standards (capital standards) were introduced in legislation in 2000 and had effect from 1 January 2001. To simplify application and allow for changes to the accounting and legislative regimes applicable to PHIs, the capital standards have been modified slightly since 2001. Under sections 140–5 and 143–5 of the PHI Act, PHIAC has the authority to establish the capital standards to provide for the financial security of the health benefits fund/s conducted by a PHI. Legislation states that the aim of the solvency standard is to ensure, as far as practicable, that at any time, the financial position of the health benefits fund conducted by a PHI is such that the insurer is able, out of the fund’s assets, to meet all liabilities that are referable to a fund as those liabilities become due. Legislation states that the aim of the capital adequacy standard is to ensure, as far as practicable, that there are sufficient assets in a health benefits fund conducted by a PHI to provide adequate capital for the conduct of the fund in accordance with the PHI Act and the interests of policy holders of the fund. In January 2007, PHIAC announced a major review of the Solvency and Capital Adequacy Standards, inviting written comment from all stakeholders and interested parties. It was subsequently decided to conduct this review in a staged approach, as the timeframes of the Department of Health and Ageing’s legislation reform agenda, and the proposed standards review overlapped. The review of the Solvency and Capital Adequacy Standards—invitation for comment (Stage 1) of the project addressed the changes necessary in light of the introduction of the PHI Act, and also minor changes that were previously identified and which could be made without delay. The preliminary views paper (Stage 2), to express PHIAC’s views on the capital standards and to initiate further consultation, follows on from the ‘invitation for comment’ paper (Stage 1) and will form the next step in the review of the capital standards, due out later this year. The focus of this paper will be to examine whether the capital standards could apply greater specificity in determining the risk exposure of a fund, and follows on from the proposals contained in PHIAC’s paper, review of the Solvency and Capital Adequacy Standards—invitation for comment, and from the resultant industry responses. Following the close of comments, a Standards Reference Group (SRG) will be formed comprising key industry stakeholders. The SRG will act as a consultative body during the review to provide comments to PHIAC and to facilitate discussion. An additional paper will be prepared by PHIAC documenting the proposed changes, the rationale underlying the changes and any expected impacts for the industry. This will form the basis of the revised draft capital standards. The industry will continue to be consulted throughout the process. Further information on the Solvency and Capital Adequacy Standards is available from PHIAC. The Standards themselves are available on PHIAC’s website. Registration of Private Health InsurersSection 18 of the Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007 stipulated that PHIAC register all existing PHIs before 1 July 2008 and that funds would continue to be registered until 1 July 2008 or they were registered under Part 4–3 of the PHI Act. Any fund that was not registered with PHIAC by 1 July 2008 could no longer offer private health insurance. All funds were re-registered. As part of the Private Health Insurance Legislations Amendment Act 2008 assented to on 25 June 2008, a body applying for registration must be a company within the meaning of the Corporations Act 2001. Previously section 126–10 of the PHI Act provided that an applicant could be a company or a registered body under the Corporations Act. Division 126 of the PHI Act details the powers of the Council with regard to registration matters. A body seeking registration under the PHI Act may be registered under one of two categories:
At 30 June 2008 there were 38 operational funds; 25 were available to the public generally and 13 were operated as restricted access organisations. At 30 June 2008 there were seven organisations operating on a for-profit basis.
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Private Health Insurance Administration CouncilSuite 16, Level 1, 71 Leichhardt Street, KINGSTON ACT
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Last modified: 16 October, 2008 |