21 August 2002
The Chairman
Standing Committee on Private Members Legislation

Dear Mr Hendrickse, MP

In reply to the letter concerning my proposal to amend the Medical Schemes Act from Mr Harrison Head:

Research and Monitoring dated 18 June 2002 I make the following submission.

1. The amendment would only apply to Medical Schemes that have a clause in their constitution that states that on retirement the member will receive a discounted rate subject to whatever restrictions are applied. Therefore the company and the member are aware of the situation and during the members working like he and the company are providing for this discounted rate. Clause 7a would not apply as the Medical Scheme only has to apply their rule and is not responsible for the funding.

2. Clause 7b would apply to a Medical Scheme that sole reason is to provide short-term medical cover to all who are prepared to join their scheme. There are a number of Medical Schemes that go beyond that and these schemes are generally company owned and their employees are required to join the scheme as a condition of employment. These schemes have a long-term responsibility as an extension of the employer and need to have a different set of norms.

3. A statement could cover clause 7c that discrimination is not acceptable and the word "must" be inserted.

4. Clause 7d discusses the financial implications of the proposal and I agree if this clause was insisted upon for all Medical Schemes the financial implications would have to be investigated. But this clause would only apply to the M6dical Scheme that has such a clause in their constitution and perhaps to a new scheme should the company or employer so desire. Medical Schemes that serve a particular company or group of companies usually make membership of their medical scheme a condition of employment.

5. The suggestion that a joint process between Health and Labour to identify potential solutions is acceptable in the long term. Any solution that is found to reduce the cost of medical cover to a pensioner is very important.

6. I would implore that this amendment be accepted to cover the Medical Schemes that at present have this arrangement in their rules and any long-term solution is negotiated in the future.

Kind regards
Brian Bell MP