Safety net is Medicare minus

Anna Pha

When the Howard Government announced details of its so-called 
"Medicare Plus safety net", it seemed obvious that the health 
bill would rise. The "safety net" would kick in once patients had 
paid a certain amount for out-of-hospital medical services. At 
that point Medicare would reimburse patients for 80 per cent of 
the gap between the Medicare rebate and the amount charged for 
the medical service.

For concession cardholders and family tax part B beneficiaries 
the out-of-pocket threshold is $300 and for others it is $700. 
Once that amount is reached, then 80 percent of the gap is 
covered by Medicare.

When the government introduced the scheme, no caps or controls 
were placed on what doctors and other providers of medical 
services, including specialists, could charge. The government was 
signing a blank cheque for the medical "industry", and not a 
single cent of it would assist the public health sector.

In fact the "safety net" would be an incentive for doctors, 
pathologists and others to raise their fees. The media have 
recently carried news items about GPs intending to increase their 
fees.

The private sector might even appear "affordable" for some 
families — especially when faced with the choice between paying 
through the nose for immediate tests or treatment and waiting 
months for an appointment in the public system.

It would also encourage those who still bulk billed to abandon 
it.

Initial reports since the introduction of Medicare Plus have 
confirmed these predictions, with medical practices and 
pathologists ceasing to bulk bill, hikes in fees and many 
individuals and families reaching the limit very quickly.

But this did not stop the Australian Financial Review (27-10-04) 
from singing its praises. "Medicare safety net proves to be good 
medicine" ran the headline of an article by Cherelle Murphy.

"Out-of-hospital medical expenses were held down by the scheme. 
"[!] A surprising comment that backed the headline.

"The federal government's Medicare Plus safety net is keeping 
downward pressure on consumer prices as the government picks up 
the medical bills for more Australians and spreads them among 
taxpayers."

Consumers are paying less. That sounds great. But the other side 
of the coin is that "the government picks up the medical bills 
for more Australians and spreads them among taxpayers".

Read on a little and this becomes clearer. "The cost of the 
scheme to the government is rising sharply — increasing to $1.2 
billion over the next four years — more than double the original 
[budgeted] cost of the policy."

The Medicare Plus safety net is the second major scheme that the 
government has introduced that imposes huge and unlimited costs 
on the health budget. The other is the 30 percent rebate on 
private health insurance which is costing billions of dollars 
annually.

As with the uncapped 30 percent rebate and other subsidies for 
private health insurance and related subsidies (costing almost $4 
billion a year), the safety net is striking another blow at the 
public health system. It also diverts billions of dollars of 
taxpayer money from public health care to the costly and less 
efficient private system and encourages and facilitates the 
further abandonment of bulk billing.

For the private/corporate health industry they are critical 
subsidies — without them the private sector would collapse. For 
the specialists in particular it is a licence to print money. For 
some patients it may seem to be saving them money — but at an 
extremely high price — the destruction of the superior public 
health system and higher taxes.

These uncapped subsidies to the private sector are designed to 
create budget blowouts — blowouts that will be used to argue 
that Medicare in its present form is unsustainable. This will be 
one of the main excuses used to restrict access to bulk billing 
to concession card holders and to shift the cost of health care 
for the majority of the population from the state onto the 
individual.

This is what was proposed in the Liberals' Fightback! policy 
document in 1993, and it is at the top of the agenda today. The 
longer term aim is to completely privatise the health care and 
turn it into a commodity bought and sold on deregulated markets 
where a handful of corporations dominate.