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 Medicare Safety Net (EMSN) caps on GP services. GP co-payments would count towards the EMSN
  • allowing GPs to waive the co-payment and
  • allowing co-payments and expenses below the EMSN threshold to be covered by private health insurance.

The freezing of the MBS fees until 2018 is to encourage doctors to impose the co-payment, or suffer a financial loss.

To support these measures, Barnes also proposes reducing or removing regulatory and policy requirements to visit a GP to:

  • obtain a doctor’s certificate for minor ailments
  • obtain a specialist referral from a GP or
  • obtain a repeat prescription.

Savings from the Barnes proposal are estimated to be $749 million over the forward estimates.

1991 GP co-payment measure

In the 1991–92 Budget, the Hawke Government announced several measures to restrain growth of the MBS. From November 1991, the Medicare benefit to non-concessional patients for GP visits would be reduced by $3.50. From November 1992, there would be a further reduction in benefits for GP services to non-concessional patients of $1.50, taking the total reduction to $5.00, which would then be indexed annually. GPs would be allowed to charge non-concessional patients a co-payment of up to $3.50 on bulk billed services.

The Government also proposed expanding the Medicare safety net to include family expenditure, and allow gap payments for GP services to count towards the safety net, as well as a range of general practice reforms.

Savings of $1.6 billion over the forward estimates were forecast.

Following the announcement a fierce debate erupted within the Labor party over the co-payment proposals. A special Caucus Review Committee was established to recommend a way forward. A revised measure was subsequently agreed.

The revised measure retained the $3.50 reduction in the Medicare benefit for GP services for non-concessional patients, and the subsequent increase and indexation arrangements. But the amount of the GP co-payment for non-concessional patients was reduced to a maximum $2.50 (rather than the original $3.50). An additional $1 transaction fee would be paid to GPs to encourage them to continue to bulk bill.

Legislation to enact the proposal was passed, but the measure was short lived. New Prime Minister Keating abolished the GP co-payment and reduction in MBS benefits in March 1992. The safety net arrangements and GP reforms were retained.

The impact of the temporary co-payment on MBS growth is hard to gauge, partly because it involves such a short time period which is not easily captured by annual Medicare statistics. Unpublished Medicare data provided to the Parliamentary Library in 1992, indicates that over the period, some 6.2 million services were bulk billed, including 3.2 million services for concessional patients (who were exempt from the co-payment). Doctors declined to impose a co-payment on some 865,000 services, and just 1.8 million services attracted a co-payment.

Although the Barnes proposal is described as a revival of the Hawke Government measure, they are quite different proposals. For example, the Barnes proposal applies a co-payment to all GP services, not just those that are bulk billed, and it applies to both concessional and non-concessional patients. Some of the additional features also go well beyond the Hawke Government measures.

Interestingly, the Howard Government’s 2003–04 Budget included a proposal to allow GP’s to charge a patient ‘gap’ fee up-front to non-concessional patients, provided they agreed to bulk bill all concessional patients. The GP would claim the balance of the Medicare fee direct from Medicare. It was promoted as improving patient affordability and was not forecast to generate any savings. However, the legislation to enact the measure failed to pass.

Unlike the Hawke Government measure which exempted concession card holders from the co-payment, recent media speculation suggests that the proposal under current consideration would see all patients charged the $6 co-payment for a bulk billed visit.

Whether the Government proceeds with a co-payment proposal will not be known until budget night. The fate of similar measures in the past suggests a co-payment will be controversial and difficult to implement.


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

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