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

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Private health insurance in primary care: overview of issues

While the Government’s proposed patient co-payment for GP services has focused debate on whether some kind of ‘price signal’ for GP services is needed, private health insurers have been exploring options to provide their members with free or expedited access to GPs. Under current legislation, health insurers cannot provide insurance for which a Medicare benefit is payable. Despite these legislative restrictions, Medibank Private and other health insurers have been trialling different approaches to improve access to GP services for their members. In Queensland, Medibank Private has been running the GP Access Program in selected clinics which is aimed at improving members&rs... Read more...

Can the Government bypass the Parliament over the GP co-payment?

Recently, ABC news online reported that based on advice provided to the Greens from the Parliamentary Library, the Government could bypass the Senate to introduce elements of its GP co-payment proposal. The news story goes on to suggest that the Government could use its regulatory powers to implement at least one element of the proposal—a $5 reduction in the Medicare rebate paid to doctors—without the need for legislation. This Flagpost explains how this might occur. The Medicare rebate is calculated as a proportion of the Medicare Schedule Fee, which is listed in the Medicare Benefits Schedule. For most out of hospital services, the rebate is calculated at 85% of the Schedule F... Read more...

Are concessional patients over-using Medicare?

The recent budget proposed measures which are intended to reduce demand on health services, particularly GP services, because of concern free or low-cost services are being over-used and a price signal is needed to keep Medicare sustainable (see Box). Reducing unnecessary GP visits could reduce costs to government and free up resources to treat higher need patients. Evidence suggests that concessional patients use GP services at a higher rate compared to non-concessional patients. A key question is whether the higher use of medical services among concessional patients reflects a genuine need for a health service or that health services provided to this group tend to be free or low-cost, and ... Read more...

GP co-payment proposal: lessons from the past

Recent comments by Health Minister Dutton and ongoing media speculation suggest the Government is considering a $6 patient co-payment on GP visits. Speculation is mainly focused on a proposal by former Coalition adviser, Terry Barnes, who describes his GP co-payment proposal as a revival of a 1991 Hawke Government measure. The key features of the Barnes proposal are: an indexation freeze on Medicare Benefit Schedule (MBS) fees for GP consultations until 2018 a co-payment of $6 for all GP attendances a safety net for concessional patients and families with children after 12 visits a year: subsequent GP attendances in that year would be free the removal of Extended M... Read more...

How much does Medicare cost?

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 ... Read more...

Evidence around GP co-payments and over servicing

One argument forwarded in support of the recent proposal to impose a co-payment for GP visits is that it has the potential to reduce ‘over servicing’, and therefore overall health costs. Over servicing occurs where an unnecessary medical intervention is provided. Imposing a consumer co-payment on the cost of visiting a doctor will encourage patients to avoid unnecessary visits, thus reducing over servicing and saving the health system money, argue advocates of co-payments. But what is the evidence that over servicing is a problem or that it is being driven by unnecessary consumer demand? Before proceeding, a distinction should be made between the extent of over servicing and th... Read more...

Medicare at 30

Medicare, Australia's universal health insurance scheme marks its 30th anniversary on 1 February 2014. For 30 years Australians have had free public hospital treatment and subsidised medical services; free if the doctor bulk bills. Medicare is part-funded by a 1.5% levy on income tax (which meets around half its cost) and general taxation. In 2012–13, spending on Medicare totalled $18.5 billion. This makes Medicare the third most expensive government program after the Age Pension and family payments. Read more...

A short history of increases to the Medicare levy

The Government is proposing to introduce legislation during budget week to raise the Medicare levy by 0.5% in order to help fund DisabilityCare, the name of the new National Disability Insurance Scheme. This recent Flagpost outlined some of the reasons for securing funding for the scheme. The Medicare levy has been increased a number of times, and there have also been occasions where an increase has been proposed in order to fund other proposals. The Medicare levy is used to help fund Australia's national health insurance scheme, Medicare and is currently set at 1.5% of taxable income (with exemptions for those on low incomes and aged pensioners). Funds raised by the levy go into general gov... Read more...

Health spending: patients bearing higher costs

Recent reports have highlighted the growing cost of health services and the increasing financial burden on individuals. According to data from the Australian Institute of Health and Welfare (AIHW) Australia spent more than $130 billion on health in 2010–11, or around 9.3% of Gross Domestic Product (GDP). Around 70% of this was spending by Government—the Commonwealth and the states and territories combined, through programs such as Medicare, public hospital services and the Pharmaceutical Benefits Scheme (PBS). But a significant and growing component of health expenditure comes from individuals. Australians paid $24.3 billion out-of-pocket on purchasing health goods and services in 2010–11. ... Read more...

Health Insurance in Australia: time for a new debate?

  In July 2011 the Government re-introduced its Fairer Private Health Insurance Incentives legislation into the House of Representatives; for an overview of the history of this legislation, see here. The Bills have not yet been debated. The key changes proposed by this legislation are: a means-test on tax-funded rebates for private health insurance (PHI) for those on incomes above a specified threshold, and; a higher Medicare Levy Surcharge for people on high incomes who choose not to purchase PHI. If passed, the legislation will mean that higher income earners will receive a lower or no tax-funded subsidy when they purchase PHI, and, if they choose not to purchase PHI, they will face high... Read more...