Budget Review 2015–16 Index

Amanda Biggs

The Budget’s most significant measure in relation to Medicare was confirmation of the Government’s position that it would not proceed with changes announced in the Mid-Year Economic and Fiscal Outlook 2014–15.[1] At MYEFO the Government proposed modifications to rebates for Level A and B general practice (GP) consultations, a $5 reduction in rebates for GP consultations for non-concessional patients and an optional patient co-payment. Reversing these measures is expected to cost the Budget $2.9 billion over the forward estimates.[2] Last year’s budget announcement of a $7 GP and pathology co-payment had been dropped and replaced by the MYEFO measures.[3] A pause on indexation of Medicare rebates introduced in last year’s Budget remains in place until 2018.

Following broad opposition to its revised MYEFO proposals, the Health Minister Sussan Ley recently announced a new approach. [4] A review of all items on the Medicare Benefits Schedule (MBS) will be conducted by a Review Taskforce to ensure these align with current clinical evidence. In addition, a Primary Health Care Advisory Group will be established to: identify ways to provide better care for people with chronic and complex conditions; identify innovative care and funding models and improved treatment options for mental health conditions; and, ways to improve integration between the primary and acute care sectors. Lastly, it is intended that clearer Medicare compliance rules will be developed in consultation with representatives from the medical profession, clinical leaders and patient representatives. It is expected that these processes will be ongoing, with priority action areas due to be reported in late 2015.[5] This approach has been broadly welcomed by the medical profession, although they remain opposed to the pause in indexation.[6]

The Budget allocates funding of $34.3 million over two years to support these review measures as well as the activities of the Medical Services Advisory Committee (which reviews applications for Medicare funding of new medical treatments).[7]

A number of new and revised MBS listings have been funded in the Budget, at a cost of $39.8 million over four years.[8] New listings include introducing Medicare rebates for: second expert opinions for certain types of pathology testing; telehealth optometric services; remote monitoring of cardiac devices; new investigations for gastro-oesophageal reflux; and intraoperative radiotherapy for breast cancer. Revised listings will apply to paediatric surgical services and computed tomography colonography.[9]

It is intended that savings of $144.6 million will be achieved by modifying health assessments provided under the MBS that duplicate child health assessments already provided by state and territory governments.[10] A Healthy Kids Check is currently funded by Medicare for children who have received, or are receiving their four-year-old immunisation.[11] A number of jurisdictions also offer child health checks. For example, the Victorian Government funds free regular health and development checks at Maternal and Child Health centres for children up to the age of three and a half.[12]

Currently, a child health check is required in order to obtain a certain family payment. Under the Healthy start to school measure, parents with a child turning four and in receipt of Family Tax Benefit (FTB) Part A, may be required to arrange a child health check in order to qualify for the FTB Part A Supplement.[13] Health checks that meet the requirements for this include A Healthy Kids Check as well as specified child health checks that are conducted by state and territory jurisdictions.[14]

Details of what the revisions to health assessments will be are not provided in the Budget, but some media suggest that the rebates paid to GPs for conducting the Healthy Kids Check might be halved.[15] If GPs want to make up for their lower rebate, they may choose to move away from bulk billing these services. Parents may have to bear any additional cost to access health assessments or may opt to forego the health check altogether. The President of the Australian Medical Association, Professor Brian Owler, has questioned whether duplication in child health assessments even exists. Owler suggests that the proposed review into primary health care is best placed to consider any changes to these assessments.[16]

In another Budget measure, the Medicare Levy low-income thresholds for singles, families, single seniors and pensioners will be increased in line with movements in the Consumer Price Index , at a cost to revenue of $231 million over the forward estimates.[17] Increasing these income thresholds is meant to ensure that those on low-incomes remain exempt from paying the Medicare Levy. Legislation will be needed to raise these income thresholds.[18]

The Budget also reveals that Medicare expenditure is expected to exceed $21.1 billion in 2015–16, an increase of 1.6 per cent from the previous year. Growth in Medicare expenditure to 2018–19 is expected to be 6.7 per cent in real terms, which is below forecast growth in expenditure on the private health insurance rebate (7.0 per cent), but higher than for the Pharmaceutical Benefits Scheme (3.8 per cent) over the same period.[19] Total Australian Government expenditure on health is expected to be $69.4 billion in 2015–16. This is an increase of $2.3 billion from 2014–15.[20]

[1].          Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 102; see also S Ley (Minister for Health), Government to consult on Medicare reform, media release 15 January 2015; Government continues Medicare consultation, media release 3 March 2015.

[2].          Australian Government, Budget strategy and outlook: budget paper no. 1: 2015–16, pp. 3–20.

[3].          Australian Government, Mid-Year Economic and Fiscal Outlook 2014–15, p. 166.

[4].          S Ley (Minister for Health), Abbott government to deliver a healthier Medicare, media release, 22 April 2015.

[5].          Ibid.

[6].          A Tillet, ‘Doctors back review of Medicare rebates’, West Australian, 23 April 2015, p. 21.

[7].          Budget measures: budget paper no. 2: 2015–16, op. cit., p. 104.

[8].          Ibid., p. 103.

[9].          Australian Government, Portfolio budget statements 2015–16: budget related paper no. 1.10: Health portfolio, p. 71.

[10].       Budget measures: budget paper no. 2: 2015–16, op. cit., p. 103.

[11].       Checks can be undertaken by medical practitioners or by nurses under supervision of a doctor. Details are in Department of Health (DoH), Medicare Benefits Schedule, ‘Category 1 Professional Attendances: Note A26’, DoH website.

[12].       Department of Education and Training (DoET), ‘Your Maternal and Child Health Service Visits’, (DoET) website. Child and development reviews are conducted by nurses.

[13].       Section 61A of the A New Tax System (Family Assistance) Act 1999 specifies health check requirements. Certain exemptions for health checks apply. Parents will be notified by letter if a health check is required. See also Department of Human Services (DoH), ‘Healthy Start for School’, DoH website.

[14].       DoH website, op. cit.

[15].       ‘$2b spending cuts a prescription for big changes’, Courier Mail, 13 May 2015, p. 6.

[16].       B Owler (Australian Medical Association), Transcript of doorstop interview with Brian Owler: Parliament House, Canberra: 13 May 2015: 2015 Health Budget, 13 May 2015.

[17].       Budget measures: budget paper no. 2: 2015–16, op. cit., p. 26.

[18].       Amendments to the Medicare Levy Act 1986 will be required.

[19].       Budget strategy and outlook: budget paper no. 1: 2015–16, op. cit., pp. 5-23–24.

[20].       Ibid., pp. 5–8.


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