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NATIONAL HEALTH AMENDMENT (LIFETIME HEALTH COVER) ACT 1999 NO. 130, 1999 - SCHEDULE 2

- Lifetime Health Cover
Note: See section 73BAAA

Part 1—General rules

1 People who are late in taking out hospital cover
(1)
The amount of the contributions payable for hospital cover in respect of an adult beneficiary is increased if:

(a)
he or she did not have hospital cover on his or her Schedule 2 application day; or

(b)
he or she:

(i)
turned 31 years of age on or before 1 July 2000; and
(ii)
did not have hospital cover on 30 June 1999; and
(iii)
ceased to have hospital cover after 1 July 2000 but before 2 July 2001.
(2)
The amount of the increase is worked out as follows:

where:

age is the adult beneficiary's age on the first day, after his or her Schedule 2 application day, on which the adult beneficiary has hospital cover.

base rate is the amount of contributions that would be payable for that hospital cover in respect of an adult beneficiary in respect of whom:

(a)
contributions are not increased under this Schedule; and

(b)
contributions are not decreased through providing financial benefits under a loyalty bonus scheme implemented in accordance with paragraph (ma) of Schedule 1; and

(c)
a discounted rate of contribution is not payable in accordance with paragraph (s) of Schedule 1.

Example: Bill turned 35 years of age on 1 September 2000. He takes out hospital cover, for the first time, on 15 September 2000. If that hospital cover has a base rate of $1,000 per year, the amount of the increase in the base rate under this clause is as follows:

2 People who cease to have hospital cover after 1 July 2000
(1)
The amount of the contributions payable for hospital cover in respect of an adult beneficiary is increased if:

(a)
after his or her Schedule 2 application day, the adult beneficiary ceased to have hospital cover; and

(b)
on more than 364 days (other than permitted days without hospital cover) after the first day on which paragraph (a) applied to the adult beneficiary, he or she did not have hospital cover.

(2)
The amount of the increase is worked out as follows:

where:

base rate is the base rate for the hospital cover in question.

years without hospital cover is the number obtained by:

(a)
dividing by 365 the number of days (other than permitted days without hospital cover), after the first day on which paragraph (1)(a) applied to the adult beneficiary, on which he or she did not have hospital cover; and

(b)
rounding down the result to the nearest whole number.

(3)
Any increase under this clause in the amount of the contributions payable for hospital cover is in addition to any increase under clause 1 in the amount of the contributions payable for that hospital cover.

Example: Further to the example in clause 1, Bill, at age 37, ceases his hospital cover. He subsequently takes out hospital cover again (at a base rate of $1,000 per year) after a period that included 800 days that were not permitted days without hospital cover (see clause 3).

The number of years without hospital cover is 2 (rounded down to the nearest whole number). The amount of the increase in the base rate under this clause is therefore as follows:

This increase is added to the increase under clause 1, giving a total increase of $140. Bill's hospital cover (in the absence of any loyalty bonus or discount) will therefore cost $1,140 per year.

3 Meaning of permitted days without hospital cover

(1)
Any of the following days that occur after an adult beneficiary ceases, for the first time after his or her Schedule 2 application day, to have hospital cover are permitted days without hospital cover in respect of that adult beneficiary:

(a)
the first 730 days during which the adult beneficiary did not have hospital cover;

(b)
days on which the cover was suspended by the registered organization in accordance with the rules for suspensions provided in regulations made for the purpose of this paragraph.

(2)
However:

(a)
the 730 days referred to in paragraph (1)(a) do not include:

(i)
days to which paragraph (1)(b) applies; or
(ii)
if the adult beneficiary turned 31 years of age on or before 1 July 2000 and did not have hospital cover on 30 June 1999—days on which, on or after 1 July 2000 but before 2 July 2001, he or she did not have hospital cover; and
(b)
if he or she turned 31 years of age on or before 1 July 2000 and did not have hospital cover on 30 June 1999—the days referred to in paragraph (1)(b) do not include days on which:

(i)
on or after 1 July 2000 but before 2 July 2001, he or she did not have hospital cover; and
(ii)
he or she has not met the requirements specified in regulations made for the purposes of this paragraph (either generally or in respect of the kind of circumstances to which paragraph (1)(b) applies in this case).
4 Meaning of hospital cover
(1)
A person has hospital cover if the person is covered by an applicable benefits arrangement of any registered organization, unless the person is:

(a)
under 31 years of age; and

(b)
a dependant of a contributor for benefits in accordance with the arrangement.

Note: For applicable benefits arrangements, see section 5A.

(2)
A person is taken to have hospital cover if the person is included in a class of persons specified in the regulations.

5 Meaning of Schedule 2 application day
(1)
An adult beneficiary's Schedule 2 application day is:

(a)
if the adult beneficiary turned 31 years of age on or before 1 July 2000 and there is no provision under this clause for a later day to be the Schedule 2 application day—1 July 2000; or

(b)
if the adult beneficiary turned 31 years of age after 1 July 2000 and there is no provision under this clause for a later day to be the Schedule 2 application day—the day he or she turned 31 years of age; or

(c)
if the adult beneficiary either:

(i)
entered or enters Australia on a protection visa within the meaning of section 36 of the Migration Act 1958 that was issued on or after 1 January 2000; or
(ii)
was or is granted such a visa after entering Australia on or after that date;
the day on which he or she turned 31 years of age or the first anniversary of the day he or she became eligible for Medicare benefits, whichever is the later; or

(d)
if the adult beneficiary is an Australian citizen or the holder of a permanent visa within the meaning of the Migration Act 1958 who is absent from Australia for the whole of the period starting on 1 January 2000 and ending on 1 July 2000—the day he or she turned 31 years of age or the first anniversary of the day he or she returned to Australia, whichever is the later.

(2)
A person is eligible for Medicare benefits if he or she is an eligible person within the meaning of section 3 of the Health Insurance Act 1973 or a person who is treated as an eligible person because of section 6 or 7 of that Act.

6 Loyalty bonus schemes and discounted rates of contribution are unaffected
The fact that the amount of contributions payable for hospital cover in respect of an adult beneficiary is increased under this Schedule does not prevent:

(a)
contributions in respect of the adult beneficiary being decreased through providing financial benefits under a loyalty bonus scheme implemented in accordance with paragraph (ma) of Schedule 1; and

(b)
any discounted rate of contribution being payable by or in respect of the adult beneficiary in accordance with paragraph (s) of Schedule 1.

Part 2—Exceptions to the general rules

7 People born on or before 1 July 1934
(1)
The amount of the contributions payable for hospital cover in respect of an adult beneficiary does not increase under this Schedule if he or she was born on or before 1 July 1934.

(2)
However, this clause does not prevent clause 9 applying to joint hospital cover in respect of any adult beneficiaries who were born after 1 July 1934.

8 Increases cannot exceed 70% of base rates
The maximum amount of any increase under this Schedule in the amount of the contributions payable for hospital cover in respect of an adult beneficiary is an amount equal to 70% of the base rate for the hospital cover.

9 Joint hospital cover
(1)
If:

(a)
an adult beneficiary has joint hospital cover with a registered organization; and

(b)
the amount of the contributions payable for the hospital cover in respect of the adult beneficiary is increased under this Schedule (other than this clause);

the amount of the contributions payable for the hospital cover in respect of all of the adult beneficiaries jointly is increased.

(2)
The amount of the increase is worked out by:

(a)
for each adult beneficiary, working out what would be the amount of the increase under this Schedule in the amount of contributions payable in respect of the adult beneficiary if:

(i)
he or she had hospital cover in respect of which he or she was the only adult beneficiary; and
(ii)
the base rate for the hospital cover was an amount equal to the base rate for the joint hospital cover divided by the total number of the adult beneficiaries; and
(b)
adding together the amounts worked out under paragraph (a).

Example: Further to the example in clauses 1 and 2, Bill, at age 42, changes his hospital cover to a joint hospital cover with Maria, who had hospital cover on 1 July 2000 and has maintained it ever since. The base rate for the joint hospital cover is $1,500 per year.

The increase under this Schedule for Bill, on a base rate of $750, is $105 (because he did not have hospital cover, after 1 July 2000, until he turned 35, and because of the subsequent 800 days without hospital cover).

There is no increase under this Schedule for Maria.

The amount of the increase in the base rate, for Bill and Maria jointly, is therefore $105.

10 Hardship cases

(1)
The Minister must determine that a person is to be treated, for the purposes of this Schedule, as having had hospital cover on 1 July 2000 if:

(a)
the person applies to the Minister, in accordance with subclause (3), for the determination; and

(b)
the Minister is satisfied that one or more of the circumstances specified in the regulations apply to the person.

(2)
The Minister must determine that a person is to be treated, for the purposes of this Schedule, as having had hospital cover on 30 June 1999 if:

(a)
the person applies to the Minister, in accordance with subclause (3), for the determination; and

(b)
the Minister is satisfied that one or more of the circumstances specified in the regulations apply to the person.

(3)
The application must:

(a)
be made before 1 July 2002; and

(b)
be in the form approved by the Minister; and

(c)
be lodged in the manner approved by the Minister.

(4)
The determination takes effect on the day it is made. It does not affect amounts of contributions, for hospital cover in respect of the person, paid before that day.

(5)
The Minister must notify the person in writing of the determination, or of the Minister's refusal to make a determination.

Note: A refusal to make a determination is reviewable—see section 105AB.

11 This Part overrides the general rules

The provisions of this Part override Part 1 of this Schedule to the extent of any inconsistency.

Part 3—Administrative matters

12 Notification to contributors etc.
(1)
A registered organization must comply with any requirements specified in the regulations relating to providing information to:

(a)
adult beneficiaries in respect of hospital cover provided by the registered organization; and

(b)
other people who apply to become, or inquire about becoming, adult beneficiaries in respect of that hospital cover;

about increases under this Schedule in the amounts of the contributions payable for hospital cover in respect of those adult beneficiaries or other people.

(2)
A registered organization must comply with any requirements specified in the regulations relating to providing information to other registered organizations about increases under this Schedule in the amounts of the contributions payable for hospital cover provided by the registered organization.

(3)
The regulations may require or permit a registered organization to provide information of a kind referred to in this section in the form of an age notionally attributed, to an adult beneficiary or other person, as the age from which the adult beneficiary or other person will be treated as having had continuous hospital cover.

(4)
A registered organization must keep separate records in relation to each adult beneficiary covered by a joint membership.

(5)
When an adult beneficiary ceases contribution for a joint membership, the registered organization must notify each adult beneficiary covered by the joint membership that the contribution for the joint membership has ceased.

13 Evidence of having had hospital cover, or of a person's age
A registered organization must comply with any requirements specified in the regulations relating to whether, and in what circumstances, particular kinds of evidence are to be accepted, for the purposes of this Schedule, as conclusive evidence of:

(a)
whether a person had hospital cover at a particular time, or during a particular period; or

(b)
a person's age.

[ Minister's second reading speech made in—
House of Representatives on 2 June 1999
Senate on 21 June 1999 ]

(99/99)


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