Medicare rebates

There’s no doubt the biggest health question in the lead up to the 2017-18 federal budget was how will the Government deal with Medicare?

Still haunted by former prime minister Tony Abbott’s plan to introduce a $7 GP co-payment and the vicious ‘Mediscare’ campaign Labor waged during last year’s federal election, many
commentators were poised to see how Prime Minister Malcolm Turnbull and Treasurer Scott Morrison would address the Medicare system.

In the end, the Government made their intentions very clear, with a press release from Health Minister Greg Hunt stating “Medicare is not only here to stay, but will be strengthened into the future”.

The Government’s Medicare budget measures

Firstly, the Government has lifted the freeze on Medicare rebates.

In case you need a refresher, the Medicare freeze was introduced by the then-Labor Government as a temporary measure in 2013. The freeze stopped any increases to the Government’s contribution towards the cost of medical services.

When the change comes into effect, the Government contribution will again be subject to indexation. This will see it rise in line with the Department of Finance’s Wage Cost Index.
This Index is a combination of wage growth figures and the consumer price index (CPI). Put simply, that just means its contribution will reflect more on our cost of living.

The 2017-18 budget outlines a $2.4 billion additional investment to Medicare.

The other big change will be the establishment of a Medicare Guarantee Fund. This will begin from July 1 this year.

The aim is to secure the ongoing funding of the Medicare Benefits Schedule (the Government contribution which was affected by the freeze) as well as the Pharmaceutical Benefits Scheme (which provides subsidised medication).

The fund will be paid for with proceeds from the Medicare Levy. It will be topped up with a portion of the Government’s revenue from income tax.

Speaking of the Medicare Levy, it’s set to increase from 2 per cent to 2.5 per cent of your taxable income.

The Government says that increase will be used to help fund the National Disability Insurance Scheme (more on that below).

So the key points are:

  • Patients’ out-of-pocket expenses for seeing a doctor should, on average, be lower
  • The Medicare rebate freeze will be lifted in stages over the next three years, starting with GP bulk billing
  • Specialist visits, diagnostic imaging and pathology services will come later.

Wondering about Labor’s take on all this?

Opposition health spokeswoman Catherine King posted on her official Facebook page on budget night, labeling the plans “a disgrace” because some parts of the freeze would stay in place until 2019.

National Disability Insurance Scheme

The 2017-18 federal budget also secured the future of the National Disability Insurance Scheme with the project now fully funded.

The Government has promised to top up the NDIS fund with money it collects from taxpayers via the Medicare Levy.

They’re expecting $9.1 billion will be paid into the NDIS fund over the next four years.

It’s great news for Australians living with a disability, as well as their families and carers. While the scheme has had many hiccups during its rollout, it is widely believed the NDIS will benefit the majority of Australians with a disability.

Part 2 of the Federal Budget can be found here.