How much does Medicare cost?

Parliament house flag post
Medicare logo

How much does Medicare cost?

Posted 21/02/2014 by Amanda Biggs

The Treasurer, Mr Hockey said on Channel Seven’s Sunrise program on 21 February 2014, that the cost of Medicare was going to soon rise from $65 billion a year to $75 billion a year. However, the official transcript later clarified this to include other federal health expenditure. Seeing Medicare in the context of these wider figures, it is evident the actual cost of Medicare is considerably lower.

According to Budget Paper no. 1 (2013–14) spending on Medicare for the current financial year is estimated to be $19.0 billion and is forecast to grow to $23.6 billion in 2016–17. Medicare is the fourth most expensive program after payments to the states, support for seniors (mainly the aged pension) and family tax benefits.

Expenditure on Medicare covers benefits paid for services listed in the Medicare Benefits Schedule (MBS), including GP visits, specialist consultations and operations in private hospitals.

Total Commonwealth expenditure on health services overall is estimated to be around $62 billion this financial year, growing to $75.4 billion in 2016–17.

Spending on medical services and benefits, which includes Medicare and the private health insurance rebate, as well as other medical payments made by the Commonwealth, is estimated to total $25.5 billion this year, rising to $30.5 billion in 2016–17.

Meanwhile, revenue from the Medicare levy—a 1.5% levy on taxable income—is estimated to total $10.3 billion in 2013–14, but is forecast to grow by nearly 60% to $16.2 billion in 2016–17. The levy is to be raised to 2% from July 2014, to help fund the NDIS, which accounts for some of this forecast growth. It should be noted that the Medicare levy only partially offsets the cost of Medicare; the remaining funds are drawn from taxation revenue.

Table 8.1: Trends in the major components of medical services and benefits sub‑function expenses(a)

Estimates Projections
2012‑13
$m
2013‑14
$m
2014‑15
$m
2015‑16
$m
2016‑17
$m
Medicare services 18,549 19,092 20,843 22,161 23,662
Private health insurance(a) 5,564 5,399 5,578 5,748 5,912
General medical consultations and services 928 916 912 904 908
Primary care practice incentives 281 208 223 229 234
Other -15 -63 -126 -124 -168
Total 25,307 25,552 27,430 28,918 30,548

 (a) Following changes to indexation, announced in the MYEFO, the estimated financial impact of premium growth on the forward estimates for the Private Health Insurance Rebate has been removed from the Contingency Reserve and included in the published estimates.

Source: Budget Strategy and Outlook: Budget paper no. 1: 2013-14, p. 6-27. 


Thank you for your comment. If it does not require moderation, it will appear shortly.
Facebook LinkedIn Twitter Add | Email Print

FlagPost

Flagpost is a blog on current issues of interest to members of the Australian Parliament


Parliamentary Library Logo showing Information Analysis & Advice

Archive

Syndication

Tagcloud

immigration refugees elections taxation asylum Parliament criminal law election results Australian Bureau of Statistics social security disability citizenship Indigenous Australians political parties United Kingdom UK Parliament Census statistics banking early childhood education Middle East Australian foreign policy OECD Australian Electoral Commission voting mental health Employment military history by-election election timetable China; Economic policy; Southeast Asia; Africa housing Speaker; House of Representatives; Parliament Productivity Defence income management asylum seekers High Court; Indigenous; Indigenous Australians; Native Title Senate ACT Indigenous education Norfolk Island External Territories leadership aid Papua New Guinea emissions reduction fund; climate change child care funding Electoral reform politics refugees immigration asylum Canada procurement Australian Public Service firearms Indigenous health constitution High Court e-voting internet voting nsw state elections 44th Parliament women 2015 International Women's Day public policy ABS Population Age Pension Death penalty capital punishment execution Bali nine Bali bombings Trade skilled migration Private health insurance Medicare Financial sector EU national security fuel China soft power education violence against women domestic violence Fiji India Disability Support Pension disability employment welfare reform Tasmania Antarctica China Diplomacy Australian Sports Anti-Doping Agency World Anti-Doping Agency Sport ASADA Federal Court WADA ADRV by-elections state and territories terrorism terrorist groups Bills corruption anti-corruption integrity fraud bribery transparency corporate ownership whistleblower G20 economic reform science innovation research and development transport standards Afghanistan Australian Defence Force NATO United States social media Members of Parliament Scottish referendum Middle East; national security; terrorism higher education Higher Education Loan Program HECS welfare policy pensions social services welfare ASIO Law Enforcement Australian Federal Police Australian Secret Intelligence Service intelligence community Criminal Code Amendment (Misrepresentation of Age to a Minor) Bill 2013 sexual abuse online grooming sexual assault of minors labour force workers

Show all
Show less
Back to top