A $6 co-payment to see the GP is less than the cost of the proverbial lunchtime sandwich and milkshake. Yet the debate about the Medicare co-payment under consideration by the Abbott government has featured much hyperbole. A modest, compulsory patient charge needs to be seen in context and does not represent a mortal threat to Medicare.
A co-payment, along with an offsetting $6 cut to Medicare rebates for GP, pathology, diagnostic imagining and optometry services would save at least $1.7 billion a year, based on the number of services consumed in 2012-13. This is before taking into account the impact of a co-payment on demand and over-servicing.
The estimated saving would fund at least half of the growth in federal health expenditure over the four-year forward estimates, which is forecast to rise by 20 per cent (from $62 billion in 2012-13 to $75 billion in 2016-17) mainly due to increases in funding to the states and territories for public hospitals.
Despite the potential to ease funding gaps elsewhere in the system, critics claim a co-payment would undermine the ''free and universal'' principles of Medicare. In reality, a co-payment for GP and other medical services would reduce the anomalies whereby different patients are charged differently for different services.
A $6 co-payment would bring the Medical Benefits Schedule (MBS) component of Medicare more into line with the co-payments that apply for the Pharmaceutical Benefits Scheme (PBS). For PBS-listed medications, non-concession card holders pay $36.90 per script and concession-card holders pay $6 per script.
Given that people on the dole and the pension need to contribute $6 for their medications, it is more than reasonable to expect other recipients of Medicare services, especially those with higher incomes, to contribute at least the same amount to see a GP or get a blood test or X-ray. This is particularly the case given that more than 80 per cent of GP visits and about three-quarters of all MBS-funded services are currently bulk-billed.
Nevertheless, consumer health groups claim Australians already pay too much for healthcare. About $25 billion, or 17 per cent of the nation's $140 billion annual spend on health, is paid for by individuals out of their own pockets.
These figures need to be treated carefully. More than a third of out-of-pocket health expenditure is spent on over-the-counter medications that people choose to buy. Another 20 per cent is accounted for by dental care.
Only 11 per cent is spent on the kind of medical services funded through the MBS and the out-of-pocket charges incurred for GP and other medical services are only paid by that fraction of consumers who are not bulk-billed.
The Medicare Safety Net is already in place to protect the individuals and families who pay high out-of-pocket charges. Additional Medicare benefits (80 per cent of out-of-pocket costs) are paid once limits are exceeded in a calendar year, with an extended, means-tested safety net available for concession-card holders and recipients of Family Tax Benefit A.
Former Howard government health adviser Terry Barnes has proposed exempting concession-card holders and families with children under 16 from the co-payment once 12 GP visits are exceeded each year. This idea has merit, given that the average number of GP visits per year is six. But a focus on protecting the poor is not an argument for the status quo, because this objective has to be balanced against the need to ensure the sustainability of the health system.
A $6 co-payment would simply ask all Australians to treat comparatively minor and lower-cost health services like GP visits as an everyday living expense and require them to make provision in their household budgets to cover part of the cost of accessing what will remain heavily taxpayer-subsidised healthcare.
Given the size and importance of the health funding challenges ahead, introducing an expanded element of cost-sharing into the health system is an appropriate policy response.
Government spending on health has increased by over 80 per cent in real terms in the last decade and is consuming an additional 1 per cent of the nation's gross domestic product compared with 10 years ago. This is the tip of the health expenditure iceberg, which will loom larger in the decades ahead as the proportion of Australians aged 65 and over increases from 13 per cent to over 20 per cent of the population by 2050.
Dr Jeremy Sammut is a research fellow at The Centre for Independent Studies.
Home > Commentary > Opinion > Co-payment plan is no mortal blow against Medicare
Co-payment plan is no mortal blow against Medicare
A $6 co-payment to see the GP is less than the cost of the proverbial lunchtime sandwich and milkshake. Yet the debate about the Medicare co-payment under consideration by the Abbott government has featured much hyperbole. A modest, compulsory patient charge needs to be seen in context and does not represent a mortal threat to Medicare.
A co-payment, along with an offsetting $6 cut to Medicare rebates for GP, pathology, diagnostic imagining and optometry services would save at least $1.7 billion a year, based on the number of services consumed in 2012-13. This is before taking into account the impact of a co-payment on demand and over-servicing.
The estimated saving would fund at least half of the growth in federal health expenditure over the four-year forward estimates, which is forecast to rise by 20 per cent (from $62 billion in 2012-13 to $75 billion in 2016-17) mainly due to increases in funding to the states and territories for public hospitals.
Despite the potential to ease funding gaps elsewhere in the system, critics claim a co-payment would undermine the ''free and universal'' principles of Medicare. In reality, a co-payment for GP and other medical services would reduce the anomalies whereby different patients are charged differently for different services.
A $6 co-payment would bring the Medical Benefits Schedule (MBS) component of Medicare more into line with the co-payments that apply for the Pharmaceutical Benefits Scheme (PBS). For PBS-listed medications, non-concession card holders pay $36.90 per script and concession-card holders pay $6 per script.
Given that people on the dole and the pension need to contribute $6 for their medications, it is more than reasonable to expect other recipients of Medicare services, especially those with higher incomes, to contribute at least the same amount to see a GP or get a blood test or X-ray. This is particularly the case given that more than 80 per cent of GP visits and about three-quarters of all MBS-funded services are currently bulk-billed.
Nevertheless, consumer health groups claim Australians already pay too much for healthcare. About $25 billion, or 17 per cent of the nation's $140 billion annual spend on health, is paid for by individuals out of their own pockets.
These figures need to be treated carefully. More than a third of out-of-pocket health expenditure is spent on over-the-counter medications that people choose to buy. Another 20 per cent is accounted for by dental care.
Only 11 per cent is spent on the kind of medical services funded through the MBS and the out-of-pocket charges incurred for GP and other medical services are only paid by that fraction of consumers who are not bulk-billed.
The Medicare Safety Net is already in place to protect the individuals and families who pay high out-of-pocket charges. Additional Medicare benefits (80 per cent of out-of-pocket costs) are paid once limits are exceeded in a calendar year, with an extended, means-tested safety net available for concession-card holders and recipients of Family Tax Benefit A.
Former Howard government health adviser Terry Barnes has proposed exempting concession-card holders and families with children under 16 from the co-payment once 12 GP visits are exceeded each year. This idea has merit, given that the average number of GP visits per year is six. But a focus on protecting the poor is not an argument for the status quo, because this objective has to be balanced against the need to ensure the sustainability of the health system.
A $6 co-payment would simply ask all Australians to treat comparatively minor and lower-cost health services like GP visits as an everyday living expense and require them to make provision in their household budgets to cover part of the cost of accessing what will remain heavily taxpayer-subsidised healthcare.
Given the size and importance of the health funding challenges ahead, introducing an expanded element of cost-sharing into the health system is an appropriate policy response.
Government spending on health has increased by over 80 per cent in real terms in the last decade and is consuming an additional 1 per cent of the nation's gross domestic product compared with 10 years ago. This is the tip of the health expenditure iceberg, which will loom larger in the decades ahead as the proportion of Australians aged 65 and over increases from 13 per cent to over 20 per cent of the population by 2050.
Dr Jeremy Sammut is a research fellow at The Centre for Independent Studies.
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