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Issue #1712      November 25, 2015

Medicare attack

Eliminating the safety net

Minister Malcolm Turnbull and Health Minister Sussan Ley may present a softer, more consultative image but when it comes to the agenda for destroying Medicare they are just as ruthless as their predecessors. The Health Insurance Amendment (Safety Net) Bill sets out to introduce caps on rebates under the Extended Medicare Safety Net. These “efficiencies”, as the Minister calls them, are in the form of caps on payments under the safety net. They will deny many needy patients access to the life-saving treatment and tests they require.

Photo: Anna Pha

The Minister says the changes will save $266.7 million over five years. The “savings” are cuts to Medicare refunds under the safety net. They are savings for the government, not patients. Patients could be thousands of dollars more out of pocket than at present. They apply where services covered by the Medicare Benefits Schedule are not bulk-billed.

At present there is a Medicare Safety Net system which provides for higher rates of refunds when accumulated out-of-pocket expenses (gap between fees charged and Medicare rebate) reach specified thresholds. These include GP and specialist consultations, x-rays, blood tests and treatment of patients with chronic conditions and cancer.

The present threshold for Commonwealth Concession Cardholders such as pensioners, seniors and people eligible for Family Tax Benefit Part A (FTB(A)) is $638.40 per calendar year. For all other singles and families it is $2,000.

Once the threshold is reached, Medicare pays up to 80 percent of out-of-pocket expenses – that is, up to 80 percent of the gap between the medical practitioner’s fee and the Medicare rebate.

The bill sets new, lower thresholds:

  • $400 for concession card holders
  • $700 for people eligible for FTB(A) or confirmed as singles
  • $1,000 for all other families and singles

This sounds great but as with anything the Coalition government does, the most disadvantaged end up paying more.

Sting in the tail

The government wants to impose two caps that will hit hardest those with chronic, complex conditions, mental illness or requiring expensive services.

The first cap limits the amount of out-of-pocket costs for individual items that can be counted towards the threshold. The aim is to make it much harder and to take longer to reach the threshold.

There is a mathematical formula. The cap is equal to 150% (one and a half times) of the standard MBS fee minus the Medicare refund. See box opposite for example. At present all out-of-pocket costs for out-of-hospital medical services count towards the threshold.

As many non-bulk-billing doctors and specialists charge well over the Medicare schedule fee, the value of the reduction in the threshold will soon pale into insignificance for higher demand patients.

Safety net cap

But there is a second cap, a limit on the amount patients are refunded when they reach the safety net. The present 80 percent of out-of-pocket costs is capped. The same mathematical formula is applied. The cap limits the refund to a maximum of 150% of the Schedule Fee less the standard MBS rebate. This would apply to all Medicare items once the safety net is reached.

The consequences would be catastrophic. For cancer treatments out-of-pocket costs could amount to $10,000 or more. It is punitive, hitting hardest those requiring frequent services or consultations, such as a patient suffering deep depression or diabetes, or a heart condition and with mental health conditions who may require frequent consultations.

The government has to squeeze every dollar it can out of those who can least avoid it. The thresholds will be increased annually while the rebates are frozen in the coming years. The MBS is under review with the likelihood that the government will remove many items and reduce scheduled fees in other cases.

The government is arguing that the present system is unfair because it is mostly people from the wealthier suburbs who are using the safety net and not those from poorer socio-economic groups.

There is a reason for these statistics. The medical practitioners in those wealthier suburbs are less likely to bulk bill their patients.

But the changes to the safety net are part of a bigger picture which includes means testing access to Medicare and requiring those who do not qualify to take out private health insurance to cover Medicare items. (See Guardian, “Medicare privatisation at full tilt”, 11-11-2015, #1710)

The legislation is not just about hitting the wealthy. Further down the track of Medicare privatisation and deregulation, it will have a serious impact on many workers and families who are presently bulk-billed.

The government had planned to bring in the caps from January 1, 2016, but has not succeeded in getting the legislation through the Senate. There is still time to protest against the Bill. Labor opposed it and it has been referred to a Senate Committee for review.

The government is attacking Medicare from all directions. It must be thrown out of office in the next elections. It is vital that the essential principles of Medicare which have been eroded be restored in full.

These are centred around universal access, bulk billing, properly funded and resourced public hospitals with quality services. The $6 billion per annum that is presently subsidising the private hospital system should be phased out and the funds redirected to the public sector.

Health care is a basic human right and in a country such as Australia it is affordable. It is a question of political will.

Example

Specialist fee $300
Medicare scheduled fee $183.65
Medicare refund $156.15

At present:

Out-of-pocket cost
$300 – $156.15 = $145.85
$145.85 counts towards threshold

With proposed cap:

Out-of-pocket cost remains the same
Cap: 150% scheduled fee minus rebate
(150% of $183.65) – $156.15 = $275.48 – $156.15 = $119.33
$119.33 counts towards threshold

Next article – History inspires –marking 100 years since Joe Hill’s execution in 1915

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