Medicare Update

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2014 was a turbulent year for the future of Medicare with the Government pursuing an agenda of fiscal policy rather than health policy.

The Federal Budget saw the Government announce a flawed co-payment model that would have increased out-of-pocket expenses for GPs while threatening the viability of general practice. [click here to read more about the original Government proposals and AMA advocacy].

After months of AMA advocacy, supported by AMA Queensland, the Government has scrapped a number of the measures previously proposed including the introduction of the flawed co-payment model and rebate cuts for short consultations.

While the Government’s decision to reverse these policies is a significant step, they have not yet backed down on the Medicare rebate freeze until 2018.

Medicare rebate freeze

The Government has extended its freeze on indexation of Medicare rebates until July 2018. 

As with all small businesses, the costs of providing medical care go up each year.  Costs to run medical practice include wages for receptionists and nurses, rent, medical equipment, cleaning, electricity, computers and insurance.  All these costs must be met by the single fee the doctor charges the patient for their care.

Medicare rebates have been frozen since 1 November 2012 for GP* and specialist consultations and operations and will not be increased until 1 July 2018.

Medicare rebates for pathology and diagnostic imaging services have not increased for more than 15 years.

*GP consultations were indexed by 2% on 1 July 2014. 

Increasing cost of general practice

The AMA has long campaigned for better indexation of Medicare schedule fees. Since 1999, we have included a fee gaps chart in the AMA Fees List to show the ever-widening gap between the indexation of Medicare schedule fees and the indices for CPI, average weekly earnings and AMA fees.

The AMA Gaps poster illustrates how successive Governments have failed to index the Medicare schedule fees in line with the CPI and average weekly earnings.

With year upon year of indexation that has been well below par, today there is now quite a disconnect between Medicare schedule fees and the realistic cost of providing the services.

The AMA encourages members to explain this to their patients. The poster is an easy way to show patients why they may have to pay a gap.

Original government proposals and AMA advocacy

In May 2014 the Government announced significant changes to Medicare:

  • Mandatory $7 co‑payments for general practice, pathology and diagnostic imaging
  • $5 cut to rebates for general practice, pathology and diagnostic imaging 
  • A two year freeze on indexation of Medicare schedule fees 

AMA advocacy focussed on the unfair impact on vulnerable patients who would have trouble paying mandatory co‑payments, usually accumulating over a very short period of time.

In December in its Budget update, the Government changed tack on how it will strip more than $3.5 billion out of Medicare.

It has dumped the very unpopular mandatory $7 co-payment for general practice, pathology and diagnostic imaging. 

It has dumped the rebate cuts for pathology and diagnostic imaging.

It has maintained Medicare rebates and bulk billing incentives for GP consultations for concessional patients - concession card holders, children under 16 years of age, veterans and services provided in residential aged care facilities.

AMA and AMA Queensland continue to oppose the Medicare rebate freeze and will advocate for its reversal, but we need the help of members. We encourage you to talk to your local MP and let them know how you feel about the funding cuts.

More information

AMA guide for patients on how the healthcare system funds medical care


(Originally posted on www.ama.com.au)