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OVERVIEW OF ABBOTT GOVERNMENT’S HEALTH CHARGE CHANGES

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Richard Di Natale 15 Jan 2015

OVERVIEW OF ABBOTT GOVERNMENT’S HEALTH CHARGE CHANGES

1.       $20 cut for consultations under 10 minutes

(Note: On15 January 2015 the Abbott Government announced that they would scrap the rebate cut for short GP consults).

The $20 cut for consultations under 10 minutes will take effect from next Monday 19 January, but the measure can be retrospectively rejected by Parliament. The Greens will move to disallow this when Parliament resumes

The Medicare rebate for most consultations lasting up to 10 minutes is dropping from $37.05 to $16.95 starting January 19. If your doctor bulk bills (does not charge you a fee), they will receive $20.05 less for such a consultation. If your doctor charges a private fee up-front, you will receive $20.05 less back from Medicare, meaning your "out of pocket" expense will increase by $20.05.

These changes will apply to everyone including pensioners and low income earners.

Impact

One quarter of GP consults are less than 10 minutes so this will result in a significant reduction to the incomes of GPs who will shift this cost onto patients.

GPs will extend some short consults to 10 minutes to take advantage of the higher rebate, which means that fewer patients will be seen each day making it harder for people to get an appointment to see their GP.

Some GPs will cease bulk billing and begin charging an up-front private fee for patients causing bulk billing rates to decline. 

2.       The $5 co-payment

This has not yet been introduced and won’t come into effect until July. From July 1, Medicare rebates for all GP consultations will be cut by a further $5 for non-concessional patients. Children under 16, pensioners, veterans, people with a Health Care Card and residents of aged care and nursing home will be exempt from the change.

This means that for non-concessional patients Medicare would pay $11.95 towards a visit up to 10 minutes (If changes to short consultations are supported); $32.05 for 10 to 19 minutes, $66.70 for 20 to 39 minutes; and $100.55 for 40 minutes or more.

It is unclear what mechanism will be used to change the regulations and whether legislative change will also be necessary.  The Greens will move to disallow this measure in the Senate.

Impact

The $5 cut means that if a doctor bulk bills all patients, they will receive $5 less for non -concessional patients. If doctors charge a private fee, then non concessional patients will receive $5 less back from Medicare for the visit.

This change will also result in a significant reduction to the incomes of bulk billing GPs  who will be forced to shift this cost onto patients.

Some bulk billing clinics  will change their business model and begin charging an up-front private fees for patients. 

3.       Freeze on indexation

The government has also extended a freeze on indexation of ALL Medicare rebates until July 2018. 

This will apply to all doctors’ services  -  GPs, specialists, radiology, pathology etc.

This change is not disallowable so there is little that The Greens can do in the Parliament to stop it.

Labor has form here – this is an extension the indexation freeze imposed by Labor in their final term.

Impact

This amounts to a cut in all doctors’ incomes over time so they will be forced to pass on the rising costs of doing business, such as rent, electricity and wages onto patients

4.       The package overall

The combination of proposed changes outlined above are worse than the original proposal of a $7 co-payment.

These changes are likely to prompt many bulk billing doctors to start charging private fees, making it more difficult to find free GP care.

Patients who attend a private billing doctor may not face an immediate increase in the fee charged by the doctor but the rebate they get back from Medicare will drop significantly.

The freeze on indexation means that the gap between the rebate and the doctor’s fee will only continue to grow.

You don’t make the health system more sustainable by shifting costs onto patients. That’s cost shifting, not cost saving.

Out of pocket costs in Australia are already a big problem and getting worse.

Health systems with high out of pocket fees cost the tax payer more over the long term.

These changes put us on track towards a US style two tiered health system where your credit card is more important than your Medicare card.

We are keen to discuss our alternative reforms with the government that will make the health system more sustainable and don’t simply shift costs onto patients

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