Proposed Medicare threshold drop will leave patients worse off

28 October 2015

The Royal Australian College of General Practitioners (RACGP) warns patients will be left out of pocket under the Federal Government’s proposed Medicare Safety Net threshold drop.

RACGP President Dr Frank R Jones said while he agreed with the Government’s position that additional support to access healthcare should be directed to those who need it most, this recent announcement will be perceived as a cost-saving measure.

“Limiting the maximum safety net amount to 150% of the benefit is a large cut when caps of up to 300% of the benefit are in place under the current safety net,” Dr Jones said.

“That the proposed changes to the safety net introduce a broadened definition of families is a positive step towards recognising complex family arrangements.

“However, coupled with the indexation freeze, the legislation will actually increase the cost of care to vulnerable groups. Safety net thresholds will increase by CPI annually while rebates are frozen.

“The cost of providing healthcare continues to increase and is not adequately reflected in the Medicare Benefits Schedule (MBS), especially with rebates frozen across a range of items for a long period of time.”

The RACGP has provided the following example using the MBS item number 23 (standard GP consultation) to demonstrate how the proposed Medicare Safety Net changes would affect patient costs:

A patient who has reached the Medicare Safety Net threshold and faces a $75 fee for an item 23 will pay $19.45 in out-of-pocket expenses, compared to $7.60 under the current safety net arrangement.

By 2018, when the MBS indexation freeze has been in place for three years, patients will face $24.03 in out-of-pocket costs, compared to $8.51 under the current safety net for the same standard GP consultation with a $75 fee.

The Federal Government’s explanatory memorandum provides further explanation and breakdown of costs under the proposed Health Insurance Amendment (Safety Net) Bill 2015.