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19 May 2016

Main points

  • Labor promises to resume Medicare rebate indexation
  • Policy to cost $12.2 billion over 10 years
  • Welcomed by AMA as a win for patients

Labor has pledged to resume indexation of the Medicare patient rebate from 1 January next year if it wins the Federal Election, in a $12 billion commitment hailed as a big win for patients.

Seeking to outflank the Coalition on health, Opposition leader Bill Shorten has announced that a Labor Government would lift the Medicare rebate freeze and reinstate indexation, at a cost of $2.4 billion over four years and $12.2 billion over a decade.

The announcement came just days after the AMA launched a national campaign against the freeze, warning it would force many GPs to abandon bulk billing and begin charging patients up to $20 or more per visit.

“Nobody wants to head down the same path as America when it comes to our health system,” Mr Shorten said. “We will reverse Mr Turnbull’s cuts, which will reduce bulk billing and hit Australian families every time they visit the doctor.”

AMA President Professor Brian Owler said Labor’s announcement established a “real difference” between the major parties on health policy.

“Labor’s promise to lift the Medicare rebate freeze will be welcomed by doctors – GPs and other specialists – and patients across the country,” Professor Owler said. “Patients are the big winners from this announcement, especially working families with a few kids, the elderly, the chronically ill, and the most vulnerable in the community.”

In its Budget unveiled earlier this month, the Government announced that it would save $925 million by extending the Medicare rebate freeze, already in place from 2014 to 2018, through to 2020.

Medicare rebates were first frozen by Labor in November 2013 for eight months, but they have since been extended twice by the Coalition Government after failing in its attempts to introduce a patient co-payment.

Professor Owler said the freeze amounted to a “co-payment by stealth” by forcing medical practices to dump bulk billing and begin charging patients if they were to remain financially viable.

He said that for years GPs have done their best to shelter patients from the impact of the freeze, but the decision to extend it to 2020 would push many medical practices over the edge.

“Many GPs are now at a tipping point. With the freeze stretching out for seven years, they have no choice but to pass on the increased costs of running their practices to patients,” the AMA President said. “The Medicare rebate freeze is bad policy, and it should be scrapped.”

Bulk billing climbs

Last week, Health Minister Sussan Ley trumpeted official figures showing the GP bulk billing rate climbed to 84.8 per cent between July last year and March this year to argue that the Government was investing heavily in Medicare.

But Professor Owler said that the Government’s Budget decision to hold Medicare rebates down for a further two years was causing medical practices across the country to reconsider their finances and billing arrangements.

“The extension of the freeze for another two years under the last Budget has prompted many doctors now to contact the AMA requesting our help to transition them from bulk billing practices to ones that charge a fee,” he told Sky News. “Unless the freeze is lifted, I think we are going to see more costs being passed on to patients and so that’s why Labour's announcement today is indeed very welcome by GPs but I think also by patients around the country.”

Labor’s promise has been costed by the Parliamentary Budget Office, and Opposition said it would be paid for by scrapping the $1000 bonus for single-income families with a child younger than one year, (saving $1.4 billion over 10 years), capping vocational education loans at $8000 ($6 billion over 10 years) and axing business tax cuts, saving more than $4.7 billion over four years (Labor would retain some relief for businesses with a turnover of less than $2 million).

The funding arrangement means Labor will be able to campaign on the claim that it is putting access to primary health care before tax cuts for business.

“This is about choices,” Shaodw Helath Minster Catherine King said on ABC Radio. “People get sick. We want people to go to what is in fact, the cheapest and most efficient part of our system, your GP, to stay well, to manage your chronic conditions, manage episodic illness, because if we don't do that, people end up in the more expensive part of the system, the acute system where we are again, facing increasing demand.”

Ms King said that by reducing the barriers to people seeing their GP, the policy would help contain the growth in health costs.

“What we want to be able to do is actually have as many people going to your general practitioner because it is our cheapest part of the system, frankly. It's the most efficient part of the system,” she said. “We want people to go for prevention. We want people to go and get advice about how do you manage obesity, if you find that you've got heart disease in the family, we want them to go and use the Medicare system to stay well and that is how you contain costs in the more expensive part of the system, our hospital system, by actually keeping people well.” 

But Labor has so far resisted calls to reinstate bulk billing incentives for pathology and diagnostic imaging services.

Adrian Rollins

Published: 19 May 2016