Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The Health Insurance Amendment (Safety Net) Bill 2015 represents cuts of some $270 million to the Medicare safety net. So much for the promise of no cuts to health that this lot opposite promised before the last election. I am here today to tell those opposite that the Australian people are not the bottom line on an accounting spreadsheet.

The caps in the bill are not supported by independent reports or input from health professionals. These are blanket caps across a multitude of MBS items or services. The Minister for Health will tell you that the new safety net simplifies the arrangements—but that comes at a cost. It abolishes the existing, original Medicare safety net and the extended Medicare safety net. If you were walking a tightrope and relying on a safety net in case you fell, you would not use a safety net offered by the Abbott-Turnbull government, because you could guarantee it would not be there when you needed it.

The Liberals' record on universal health care speaks for itself. In 1974 the Liberals, under Snedden, voted against Medibank—Australia's first universal healthcare scheme, introduced by one of our most progressive prime ministers, Mr Gough Whitlam. Between 1975 and 1981, the Liberals proceeded to rip Medibank apart until a Labor government, led by Prime Minister Bob Hawke, came back in and reintroduced the Medicare framework in 1985. In 1987 the then Liberal opposition leader, John Howard, told Australians that bulk-billing would be scrapped, and in 1993 John Hewson took that policy to an election.

In 2004, before the election, now ex-prime minister Tony Abbott made a 'rock-solid, ironclad' guarantee he would not raise the Medicare safety net threshold. But what did he do straight after the election, in his usual fashion? With a quick backflip, he did exactly the opposite, because the costings that he had put in place blew out. So much for the theory of great Liberal financial management and control. We know that that, like everything else they told Australians before the last election, has turned out to be nothing but a pure lie.

The Howard government oversaw $1 billion of cuts to the public healthcare system across the board. Under the Abbott-Turnbull government now, we see further cuts being proposed to the healthcare system. These cuts make way for a much greater role for private health insurers and the realisation of that great Liberal dream, the thing that they have embroidered on their pillows—that is, to privatise the health system and take us down the American route. While the Americans are looking at going into universal health care through President Obama's 'ObamaCare', this lot over here in Australia want to go back to the Dark Ages. They do not think that Australians deserve universal health care. They do not think that people should be entitled to go to a doctor or to hospital and get the treatment they need for their illness, knowing that wherever they go they will get the best quality health care.

You have to wonder what those opposite think at night-time, when they lie on their 'Let's get rid of universal health care' pillows, dreaming and fantasising about bringing back a GP tax, which they tried once, twice, three times, four times—and they are now sitting there waiting, ready to go for the fifth time. It is in their DNA. It is there every day. They desperately want to make sure that Australians do not get the support of universal health care because their long-term vision is to privatise it. They love privatising things. We saw that with John Howard. The government come in here and say, 'Look at the great work that Howard and Costello did.' It is pretty easy to build your bank account when you sell off every single profit-producing government entity that we have. Then they sit there and say, 'Look, we've got lots of money!' Of course, that is only in the short term. In the long term, because of the work that they did in government during those Howard years that they liked to keep really quiet about until recently, we have structural deficit problems caused by a government that could not manage itself or the Australian economy. If we look at the recent history of health policy, it becomes absolutely clear. The coalition hate universal health care. As I said, if you were walking a tightrope, you would not want to rely on this government to supply one. The safety net is there, and it exists to ensure that patients facing significant out-of-pocket costs in one year are protected. This is consistent with the principle of Medicare: every Australian should have access to the highest quality of care, regardless of their capacity to pay. One of the important things is to make sure that people on fixed and low incomes are protected and given the support that they need and deserve in our healthcare system.

Labor is standing up for the thousands of patients who will be impacted by this poorly developed policy. I am standing up for my communities in McEwen who will be impacted by this poorly developed policy. As we have seen with every independent report, and every piece of information and input from healthcare professionals, we should oppose this bill. It is not right, it is not fair and it is typical of this government, which has no idea what it is doing but likes to talk at people and tell them how it feels. But when it comes to action, it is missing! It is gone. Nothing happens. You have the Turnbull mouthpiece but the Abbott policies. It is time that this government stops talking at people and starts actually listening to them.

On that note, I oppose this bill.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

It is always a pleasure to stand in this place, having listened to a terrific contribution from the member for McEwen. But I have a little bit of history for the member for McEwen. The first major privatisation in this country, which was the first tranche of the Commonwealth Bank of Australia, was actually done under a Labor government in 1991. I say to those opposite: your party was the one that started the privatisations in this country. As usual, we see that those opposite are supremely adept at rewriting history for their own benefit but never for the benefit of the Australian people. That is why this bill is so important.

I rise today to support the Health Insurance Amendment (Safety Net) Bill 2015 because it is an important structural reform to the Medicare arrangements and will address a number of known issues that, surprisingly—and this might assist the member for McEwen—were identified in independent reviews of the Medicare safety net in 2009 and 2011. I wonder who was in government in 2009 and 2011? It was those opposite. But, as usual, they failed to deal with the issues that were identified six and four years ago respectively, and now it is left up to this government to fix up another of the issues that they failed to deal with.

The 2009 review identified the extended Medicare safety net to be structurally flawed with rapid fee inflation in some areas of the Medicare Benefits Schedule. It also highlighted that around 55 per cent of these benefits were going to the top 20 per cent of Australia's most socioeconomically advantaged, with the least advantaged 20 per cent receiving less than 3.5 per cent of the benefits. We hear those opposite talk ad nauseam about the fact that they are supposedly there for the battler. Well, they are standing in this place speaking against this proposed legislation, which is designed to actually help those at the bottom end get a better range of cover and benefits through these amendments and to put people at the top end, who can afford to pay, in a position where they are possibly going to pay more. So, yes, the top end of town will pay more, and the bottom end will be better covered. We hear them parrot on about equity all the time. I think this proposed legislation is well designed to actually deliver the equity they so frequently talk about. I find it amazing that we frequently sit in this place and see that the rhetoric of those opposite very rarely measures up to what they profess to believe in.

The 2011 review showed that the capping led to a reduction in safety net expenditure, and that this was relatively greater in wealthier areas and major cities. The Extended Medicare Safety Net is extensively flawed and many residents in my electorate of Forde have suffered as a result. It has perverse incentives for medical fee inflation, rigid rules which disadvantage families, as well as poor access for non-concessional single people on low incomes. The current safety nets, with the three overlapping arrangements and inconsistent benefit caps, are complex and confusing for patients and practitioners, and leave many people out of pocket, stressed and frustrated. Existing Medicare safety net arrangements include the flawed Extended Medicare Safety Net, the Original Medicare Safety Net and the Greatest Permissible Gap. No wonder it is almost impossible for patients to calculate rebates. The existing arrangements are complex, regressive and inflationary.

The Health Insurance Amendment (Safety Net) Bill 2015 seeks to replace all of the existing Medicare safety net arrangements with a new Medicare safety net. In the past, a number of changes to the Extended Medicare Safety Net have been made to address some of these concerns, but they have made it complex for both the medical profession and patients to understand. Unfortunately, these changes have failed to completely address problems with the program—some people reach the threshold almost immediately each year due to the unlimited amount of out-of-pocket expenses that accumulates to the threshold. This provides no further signals to the provider with respect to fee restraint.

The new Medicare safety net has been carefully designed to respond to the issues raised by the two independent reviews that I referred to earlier. In stark contrast to those opposite, we have taken the time to consult with stakeholders and the public and to consider its impact on provider charging behaviour and out-of-pocket costs faced by singles and families. While the new Medicare safety net will continue to provide an additional benefit to families and singles for out-of-hospital Medicare services, once the annual threshold has been reached it will also be more progressive. Thresholds for people without concession cards are reducing from $2,000 to $700 for singles and $1,000 for families, and for concession card holders from $638 to $400. It is expected that more than 53,000 additional people will receive a safety net benefit under the new arrangements, and for concession card holders, in particular, an additional 80,500 people will receive benefits.

As I mentioned earlier, we talk often in this place about equity, and I think this is a clear example of equity being extended to a far broader range of people in our community through their ability to access these benefits. Unlike the Extended Medicare Safety Net, the amount of out-of-pocket costs per service that counts towards the threshold will have a limit, and the amount of safety net benefits paid per service, after the singles or families threshold has been reached, will also have a universal limit. This will restrict medical inflation and limit the Commonwealth's exposure, while ensuring more Australians can access safety net benefits. Most importantly, the thresholds to access the new Medicare safety net will be lower than the thresholds for the Extended Medicare Safety Net for most people, and more people will receive a safety net benefit as a result. While the average benefit paid will be less, more people will be able to access benefits than under the current arrangements.

For many residents in my electorate of Forde who rely heavily on bulk-billing with their GP, the changes will not reduce access to GP primary care. Safety net benefits currently only account for about one per cent of total benefits paid for GP services, as a high proportion of people are bulk-billed. The bulk-billing rate for concession card holders is some 91 per cent, which means that these people do not have out-of-pocket expenses for these services at the moment and will therefore be unlikely to be affected by any of these changes. Most people do not receive safety net benefits for GP services and those that do are generally from areas where higher fees are charged, such as in the higher socioeconomic areas. As we saw before, it is those higher socioeconomic areas that are getting the greatest benefit under the old system. The lower thresholds under the new arrangements may mean that more people receive safety net benefits for these services.

This bill will also allow the government to continue to support singles and families who have high out-of-pocket costs, while streamlining the Medicare safety net arrangements. Importantly, for all in our health system, it will improve Medicare for the long-term future and benefit of this country. I commend the bill as it is presented to the House.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Health Insurance Amendment (Safety Net) Bill 2015. A fortnight ago we had the 40th anniversary of the dismissal of the Whitlam Labor government. It was hardly surprising, given the tumultuous nature of that event, which I personally remember vividly, that at that time we saw discussion about the idea of the republic and the propriety of the actions of the Liberal and National parties in blocking supply. To put it in modern context, it would be like the Labor opposition and other non-government senators taking advantage of the highly unpopular 2014 budget and the unpopularity of former Prime Minister Abbott to block supply and to seek to regain office, notwithstanding the 2013 election outcome. It was a deeply unprincipled and opportunistic act.

It is, in my view, even more important now that we recall the Whitlam legacy, which includes free tertiary education, which I publicly supported on a number of occasions, and free and universal health care. It is well known that the Whitlam initiative of Medibank was attacked by the Fraser government but reinstated as Medicare by the Hawke government. Medicare, the Whitlam legacy of free and universal health care, has been an outstanding success. It has given Australia a health system which is the envy of the world. And if you doubt this, just think about overseas travel. Every Australian who is fortunate enough to travel overseas is acutely aware that they do not want to fall ill or have an accident in another country because, in other countries, healthcare costs are higher and healthcare standards are lower than they are in Australia. Universal health insurance has been an outstanding success. But the Liberal party hates the Whitlam legacy and they hate public health. And so they give us bills like this one. I said early last year that I intended to become more familiar with health policy. It has been sobering to see just how far we have moved from the Whitlam legacy. The fact is that we have seen cuts across every part of the health system, including: more than $60 billion cut from Australia's public hospitals; attempts to increase the costs of medicines for every Australian, including unfair changes to the Pharmaceutical Benefits Scheme safety net; $370 million cut from preventative health programs; the abolition of the Australian National Preventive Health Agency and Health Workforce Australia; the government's ongoing GP tax through its MBS freeze, which represents a cut of some $2 billion from Medicare; cuts of hundreds of millions of dollars from public dental programs; cuts to general practice training programs; and cuts to mental health and Indigenous health programs. These cuts truly are at every level of the system.

We have also seen rising health insurance premiums. A fortnight ago, the health minister admitted that premiums are rising at twice the rate of inflation. In fact, some 500,000 Australians have dumped or downgraded their private health insurance; the minister admitted that many people are disappointed with their private health insurance. The reason these cuts are happening is because this government is not serious about investing in Medicare. The government does not see Medicare as being the heart of Australia's health system; it sees a much greater role for private health insurers, with a long-term intention of privatising Australia's healthcare system. Unfortunately, the government plans to do this because it does not believe in Medicare. It sees health only through the prism of cost, not as something that every Australian has a right to. And if the government gets its way, make no mistake: Medicare will be rendered a mere safety net, not the universal health system that it is today. You do not need to look very far, Deputy Speaker, to see what happens in this sort of instance. In the United States, not only do many millions of people miss out on the care they need, but the costs spent on health care are significantly higher than in Australia; indeed, Australia spends below the OECD average on health care. But for this investment we get some of the best health outcomes in the world.

We need to also consider these cuts in the context of what this government plans on doing to private health insurance. In its latest foray into private health, we have seen the government attack community rating, suggesting that some people ought to pay more for their private health insurance. Community rating is important because it means that people pay into health funds when they are young and fit, but then they are able to draw down as they age or start a family, or if they suffer from a major health issue. Under the government's agenda, health insurance would only be available to the young and the healthy, and only wealthy people would be able to afford private insurance as they age or seek to start a family, or if they develop a long-term health condition. We also know that this is likely to be inflationary; again significantly adding to the cost of health care for every Australian. So Labor will be standing up for the thousands of patients who will be impacted on by this poorly developed policy. We will not be supporting this bill.

I want to turn now to an examination of the bill in some detail. The Health Insurance Amendment (Safety Net) Bill 2015 gives effect to the 2014-15 budget measure, Simplifying Medicare safety net arrangements. Under the proposed new arrangements, there is only one safety net, with a lower threshold for all patients. However, the amount of out-of-pocket expenses that count towards the accumulation to reach the safety net is lower, and the amount covered once patients reach the safety net will also be lower. It is through these changes that the government is cutting $270 million over five years. At present, all out-of-pocket costs for out-of-hospital Medicare services contribute to the safety net threshold. Under the new arrangements, this will be capped at 150 per cent of the MBS schedule fee. Whilst acknowledging that the new Medicare safety net has lower thresholds for all patients, the bill restricts out-of-pocket costs that can accumulate towards the threshold, and it restricts the benefits payable once patients reach the safety net. The limit on out-of-pocket costs that can count towards the threshold is equal to the difference between the Medicare benefit and 150 per cent of the MBS fee—which in this case is $55.60—or the difference between the Medicare benefit and the doctor's fee, whichever is the lesser amount. If a patient is charged $120 for a consultation and the Medicare benefit is $72.75, this leaves an out-of-pocket cost of $47.25. As this out-of-pocket amount is below the maximum amount allowed to be counted towards the threshold, $47.25 is counted towards the patient's threshold. If a patient is charged $150 for the consultation and the Medicare benefit is $72.75, they will have an out-of-pocket cost of $77.25. As this out-of-pocket cost is more than the maximum amount allowed to be counted towards the threshold, only $55.60 is counted towards the threshold. The new, so-called simplified safety net involves abolishing the existing original Medicare safety net and the extended Medicare safety net.

The Consumers Health Forum of Australia has expressed concern that safety nets and other compensatory mechanisms to protect against higher out-of-pocket costs are being eroded at a time when increased rates of chronic disease are expected to require significant health expenditure in the years to come. Australians already make a relatively high direct contribution to healthcare costs. Individual consumer co-payments comprise 17 per cent of total health care expenditure in Australia, and are the largest non-government source of funding for health goods and services. In recent years, the health costs that consumers have had to pay from their own pockets have climbed steadily. Australians now spend an average of more than $1,000 a year in out-of-pocket costs. This finding is consistent with the results of a national survey of consumers conducted by the Consumers Health Forum where over 50 per cent of respondents indicated that they had paid between $1,000 and $5,000 for health care in the last year.

The Consumers Health Forum survey of almost 600 respondents across the country provides a worrying picture of vulnerable Australians already struggling to cope with high out-of-pocket costs. The key findings include that many consumers are already experiencing difficulty affording healthcare costs. Many consumers are failing to access needed health care due to costs. Any increase in out-of-pocket costs will further add to the financial difficulties being experienced by many consumers and create additional barriers to accessing appropriate care.

The report shows that the impact of high out-of-pocket costs is most profound for people who are most in need and most vulnerable—those with chronic and long-term illnesses, especially those afflicted with multiple chronic conditions. While the report acknowledges that direct costs of most healthcare services are either fully or partially subsidised in Australia, consumers can still face substantial unbudgeted out-of-pocket costs and co-payments.

The report also highlights the inadequacy of current safety nets to target consumers adversely affected by out-of-pocket costs to ensure that they do not experience barriers to accessing care. One of the problems with the current system of safety nets is that they are based on annual expenditure, which advantages consumers whose healthcare expenses occur in a short time frame over those who have ongoing conditions requiring lower levels of care for longer periods.

Another problem identified by the report is that mechanisms to address inequity, such as healthcare cards, identify people on the basis of income level or carer status but do not accurately target those who have difficulty affording health care. For example, there are many consumers who do not qualify for healthcare cards or pensions who have experienced difficulty in meeting their healthcare costs. Against this background, Labor have serious concerns about the impact that these changes will have on thousands of patients.

We are concerned about radiation oncology patients, people with cancer who have been previously bulk-billed but who will see significant new out-of-pocket expenses. According to one example, a patient with malignant melanoma receiving the SRS or stereotactic radiation treatment would face new out-of-pocket costs of some $7,400 and a patient with prostate cancer having the treatment could face new out-of-pocket costs of some $8,000. Similarly, patients with breast cancer being treated by private providers might see a 200 per cent increase in their out-of-pocket costs for their radiation oncology.

The Australian Medical Association have said they are opposed to these changes. The President of the AMA, Professor Brian Owler, has said:

The new Medicare safety net arrangements, together with the ongoing freeze of Medicare patient rebates, mean that growing out-of-pocket costs will become a reality for all Australian families, including the most vulnerable patients in our community.

Of course, growing out-of-pocket costs represent the opposite of the Whitlam legacy and the antithesis of Medicare. It will hit older Australians in particular.

The Royal Australian College of General Practitioners has also warned about the impact of the changes, especially in the context of the government's GP tax and its ongoing freeze of Medicare indexation. The college's president, Professor Frank Jones, has said that:

… 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.

Furthermore, we have had concerns raised by the Royal Australian and New Zealand College of Psychiatrists, cancer groups and others about the thousands of patients who will be adversely affected by these changes. Psychiatrists, especially those providing psychotherapy services to very vulnerable patients, have warned of the serious impact on the patients they care for. Dr Shirley Prager, the President of the National Association of Practising Psychiatrists said:

I and my colleagues are very concerned about the impact the new Safety Net proposals will have on patients who need long-term ongoing mental health treatment as many of these patients will find their health care with a psychiatrist unaffordable.

I acknowledge that the changes mean that many patients will reach the safety net sooner but only in the context of a $270 million cut. The government is able to make these savings by restricting the out-of-pocket costs that can accumulate to reach the safety net and then putting further caps on what will be covered. By contrast, under existing arrangements, all out-of-pocket costs for out-of-hospital Medicare services count towards the threshold. The safety net exists to ensure that patients who have significant out-of-pocket costs in one year are protected, consistent with the principle of Medicare that every Australian should have access to the highest quality of care regardless of their capacity to pay. We do not claim that the current safety net arrangements are perfect, but the way changes have been presented in this bill means they will have a serious, adverse impact on thousands of patients. Therefore, we do not support this bill.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I disagree with the previous speaker's assessment of this bill. The Health Insurance Amendment (Safety Net) Bill 2015 replaces all of the existing Medicare safety net arrangements with a new Medicare safety net. Existing Medicare safety net arrangements include the extended Medicare safety net, the original Medicare safety net and the greatest permissible gap. This is confusing for patients and makes it almost impossible for them to calculate their rebate. However, our whole health system forms a part of the egalitarian nature of this country. These are important reforms so that we can have a sustainable health system for the generations ahead. These changes are important for the sustainability of Medicare. Eighty thousand more people will gain a benefit from the changes in this legislation. The new Medicare safety net is an important structural reform to the Medicare arrangements, addressing known issues, including perverse incentives for medical fee inflation, rigid rules which disadvantage families and poor access for non-concessional single people on low incomes. The current safety net, with three overlapping arrangements and inconsistent benefit caps, are complex and confusing for patients and practitioners.

Two independent reviews showed the extended Medicare safety net, the EMSN, to be structurally flawed. The 2009 review identified that this had led to rapid fee inflation in some Medicare benefit schedules, with considerable leakage of government benefits towards providers' incomes rather than reduced costs for patients. It also highlighted that around 55 per cent of these benefits were going to the top 20 per cent of Australia's most socioeconomically advantaged, with the 20 per cent least advantaged receiving less than 3.5 per cent. The 2011 review showed that capping led to a reduction in safety net expenditure and that this was relatively greater in wealthier areas and major cities.

The current EMSN is regressive, with benefits flowing to patients in higher socioeconomic areas where doctors are choosing to charge higher fees. The EMSN was originally designed to assist patients with high out-of-pocket costs, with safety net benefits intended for the patient. However, the current system threshold and benefit arrangements have facilitated higher charges in specific areas by providing incentives for fee inflation and the shifting of out-of-pocket costs to services that are not EMSN capped—for example, some providers for some services charge a single, high fee for the initial service, and, once the patient has qualified for the EMSN, the patient then receives uncapped reimbursement on the basis of what the provider charges. The introduction of caps across all MBS items is expected to have a moderating effect on these charges.

The member for Wills spoke about oncology, and I will now address that. Based on the current charging behaviour, it is estimated that an additional 1,000 people will receive safety net benefits under the arrangements due to lower thresholds, 800 of whom will be concession card holders. Around 70 per cent of radiation oncology services are bulk-billed, and more than 80 per cent of all services are charged at the scheduled fee or less. This means that a large proportion of patients experience no, or low, out-of-pocket costs for their treatment. The new Medicare safety net is not expected to lead to any reduction in patient care, and a significant proportion of families and individuals who incur out-of-pocket costs for radiation oncology will qualify for the safety net sooner because of the reduced thresholds.

The costs that patients incur for private radiation oncology will depend on the fees charged by the private providers, which include private equity investors that have recently entered the market. About 40 per cent of all radiation oncology services are from private providers. Data shows that between 2004 and 2013 average fees for private radiation oncology patients grew steadily at around 5.2 per cent per annum. From the fourth quarter of 2013 to the fourth quarter of 2014, the average fee for non-bulk-billed services increased by 22.9 per cent. In 2014 the EMSN expenditure for radiation oncology increased by more than 48 per cent—driven by fees, not service volumes. Similar fee inflation was seen in obstetrics and IVF prior to capping of those services in 2010. If charging practices do not change for a standard course of 20 radiotherapy treatments, a patient would see almost no change in their out-of-pocket expenses under the new Medicare safety net arrangements. There have been claims that out-of-pocket costs may triple, but in order for this to happen private providers would have to charge around 2½ times the scheduled fee for a course of treatment.

Most of my constituents would be concerned about how these changes will affect their GP visits, so I will address that as well. The changes will not reduce access to GP primary care. Safety net benefits currently only account for around one per cent of total benefits paid for GP services, as a high proportion of people are bulk-billed. The bulk-billing rate for concession card holders is 91.3 per cent. This means that these people do not have out-of-pocket costs for these services at the moment and will, therefore, be unlikely to be affected by these changes. Most people do not receive safety net benefits for GP services, and those that do are generally from areas where higher fees are charged, such as in higher socioeconomic areas. The lower thresholds under the new arrangements may mean that more people will receive safety net benefits for these services.

The bottom line, from my point of view, is this: these changes will make a difference to how we manage our Medicare program into the future. The current arrangements, which are complex and difficult for both medical professionals and patients to understand, have failed to completely address problems with the program. Some people reach the threshold almost immediately each year due to the unlimited amount of out-of-pocket costs that can be accumulated up to a threshold, and this has provided no further signals to providers about fee restraint. The new Medicare safety net has been carefully designed to respond to issues raised by two independent reviews, which I mentioned before, stakeholders and the public about the impact of provider charging behaviour and out-of-pocket costs faced by singles and families.

The new Medicare safety net will continue to provide an additional benefit to families and singles for out-of-hospital Medicare services once an annual threshold has been reached. The structure of the new Medicare safety net will be more progressive. The thresholds for people without concessions cards will be reduced from $2,000 to $700 for singles and $1,000 for families and from $638.40 to $400 for concession card holders. It is expected that more than 53,000 additional people will receive a safety net benefit under the new arrangements. In particular, 80,500 more concession card holders will receive benefits than under the current arrangements, while the number of non-concessional people receiving benefits will decrease by 27,500.

Unlike the extended Medicare safety net, the amount of out-of-pocket costs per service that counts towards a threshold will have a limit, and the amount of safety net benefits paid per service after the singles or families threshold has been reached will also have a universal limit. This will restrict medical inflation and limit the Commonwealth's exposure while ensuring that more Australians can access safety net benefits. Most importantly, the thresholds to access the new Medicare safety net will be lower than the thresholds for the extended Medicare safety net for most people and more people will receive a safety net benefit. While the average benefit paid will be less, more people will be able to access the benefits than under the current arrangements. This bill will allow the government to continue to support singles and families who have high out-of-pocket costs, while streamlining the Medicare safety net arrangements and contributing to the sustainability of Medicare.

Having said that, Medicare is an important part of the structure of how we look after our society. It has been supported by every government that I have been a part of and by every government that I have been in opposition while they were in government. Medicare is a hot button issue in all our electorates because health care affects every family right across Australia at some time in their lives. These are good changes. They should be supported. I do not understand the Labor Party's opposition to this. They probably would have liked to have introduced it while they were in government. This will be good for Medicare, and what is good for Medicare is good for the people in McMillan. I commend the bill to the House.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

Rubbish.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

When the member for Lingiari rose to his feet, he stated that Medicare was under attack. It is not under attack, Member for Lingiari. The coalition is a great supporter of Medicare. It is under great stress. Medicare will collapse under its own weight unless governments do something to alter the market signals to try to rein in the exponential growth in the Medicare benefits scheme.

In relation to the Health Insurance Amendment (Safety Net) Bill, it is no secret that the incoming coalition government faced incredible difficulties that were largely left to us by the previous government. There were a lot of unfunded government policies needing urgent attention. We faced unprecedented debt and unfunded promises far into the future, courtesy of the Rudd-Gillard years. Tough times call for tough decisions—tough decisions but fair decisions. Fairness is what must be offered up by governments caring for Australia—not that you would know that, of course, from the Labor Party's position.

I am amazed that, along with the many other sensible reforms they oppose, they oppose these reforms. In fact, the Labor Party are all care and responsibility. Labor have blocked the accumulated savings measures that they had suggested in government and not legislated; they block the savings that this government would support. Then there are the new expenditure items which Labor back. In total, the three lines of Labor Party decisions come to $59 billion between 2015-16 and 2018-19. It is not as if they have not had a go at savings. They have been brave enough to put forward a whole $5 billion worth. That leaves a gap of $54 billion. You would think that the Labor Party would support this legislation. You would think that one day they might hope to return to government and not want to have a sea of debt and deficits as far as the eye can see. You would think that, if they were not prepared to support these measures, they would support different efficiencies, but in fact it is a policy-free zone on that side of the chamber at this stage. Many oppositions in the past, and perhaps more in recent years, have elected to become a small target coming into an election. At the moment, I think you could say the Labor Party is trying to disappear up its own target.

I note a recent press release from the Minister for Health, who is in the chamber. Recently Medicare claims topped one million a day—not $1 million, but one million claims. There are only 23 million people in Australia, but there are one million claims a day. That has increased by 56 per cent over the last 10 years. Medicare is costing the taxpayer $20 billion per annum. Even more scarily, it is estimated that in 10 years time, in 2025, Medicare will cost the nation $39 billion per annum. Basically, that is a 100 per cent increase over the next 10 years. The population of Australia is growing, but it is not growing that fast. Incomes are rising—though not very much the moment—but they are certainly not going to rise by 100 per cent over the next 10 years. We also know, because the Intergenerational report tells us so, that today, when we have about five taxpayers funding each person who is a recipient of welfare, by 2050 that figure will be down to just over two. These are long-term issues that governments have to grapple with. In fact, there are more than 5,700 items on the Medicare list now, which is an increase of 50 per cent over the last 10 years.

Australia should be alarmed, because this type of growth is unsustainable. It is not the only line of government expenditure in this area of generalised welfare that is projected to rise substantially. The National Disability Insurance Scheme, which is not really costing the nation a lot at the moment because it is in the start-up phase, is estimated cost $32 billion per annum by 2025-26. Child care is expected to cost $20 billion per annum and aged care $32 billion per annum. One wonders where governments—whoever they might be, whichever side of politics they might come from—will find the necessary resources to keep those very fine and admirable arms of government funded. What we really need is a steady, methodical approach to addressing the long-term funding and technical challenges of health.

Health costs are going to keep rising; we will live longer and require more care; and new technologies will keep us alive longer to require medical assistance on another day. Health will continue to make greater and greater demands on the budget, and that is why we need careful adaption and reform. This reform is not just about savings, even though, it must be said, it does deliver some to the government. More importantly, it is about resetting the incentives in the medical system and, to be very blunt about it, to stop medical practitioners deliberately pushing customers beyond thresholds. I know we all have very high opinions of our local doctors, but probably on average they are not much better than any other breed of person and to think that people are not manipulating the system to best suit them is pushing the bounds of credibility. We need an incentive system that affects not only the consumers but the providers as well.

At the end of the day, there is no such thing as free cover. It may seem free to the individual, but somebody is certainly paying for it. Currently there is a complex web of safety nets—the extended Medicare safety net, the original Medicare safety net and the greatest permissible gap. How is anyone supposed to understand all that? No wonder my constituents and sometimes my family and other friends throw their hands in the air and say, 'How on earth is anyone supposed to understand all this?' Unfortunately, some people understand it only too well and they know how to make the system do the very best for them in a personal sense.

Currently there are no incentives at all. Some reach the current threshold in the first month—in virtually no time at all, once the new year begins. Once they have met the threshold under the current arrangements, they pay nothing towards their Medicare health requirements at all. So there is no signal; it is in their interests and in the interests of their health providers to reach the threshold as soon as possible. Really, that is about as dumb a case of economics as anyone could design. It is a system of all care and no responsibility.

The government has developed a new safety net, one which will advantage more people but one which requires some contribution, so there is a price signal so that people understand the service does not simply fall out of the sky—that people actually have to pay for it. Increasingly we will have to ration services and to find ways to bring the exponential growth of services under control. The government has had two independent reviews; it has met widely with stakeholders and the public; and it has the broad support of industry. But still the Labor Party avoids any responsibility. This legislation will of course pass the House of Representatives, but I am very hopeful that others in the Senate will see the value in this legislation—whether it be the crossbenchers or the Greens—and step up to the plate and recognise that Australia has long-term responsibilities in this area. In other words, we must design a Medicare system that is here for the long term and we must manage the exponential growth. If you applied any of the figures of growth onto a graph, eventually they would reach the point where it goes pop—there is nothing left—and the whole program stops. If there is no more money to provide for the program or there is no more money left for growth, what do we do? Do we stop anybody else going on to Medicare? Do we start rationing services? What do we do? We cannot allow the system to get to that point. It is not possible to continue to raise the extra amounts of money in the economy when these services are growing so much faster than the population or the economy.

The new threshold for people without concession cards will reduce from $2000 to $700 for singles and to $1000 for families. That means that families will be able to receive support for extra out-of-pocket expenses at a lower threshold. That is a good thing for families, and it is a good thing for everybody. If you start to incur higher expenses, the Commonwealth will be by your side faster. Concession card holders thresholds will go down from $638 to $400, and so more will qualify for safety net protection—in fact 53,000 more Australians will qualify, especially concession card holders. These are well-rounded reforms—a considered response. It is about trying to ensure the stability and the longevity of Medicare and to ensure government has the ability to meet all its other commitments—in the NDIS, in aged care, in child care. It is just so important that we get these fundamentals right.

This single little reform of Medicare is no silver bullet; it is just part of a raft of ongoing reforms that need to be done. I know the minister currently has people studying the Medicare listings to identify the ones being overused. I had a doctor come to me the other day quite indignant about the overuse of arthroscopies and a whole range of medical tests. She said to me, 'This is just simply not required medicine. It is not best practice.' While we hesitate to hurl stones or point fingers, it means that the people who are with responsibility are not doing the right thing and it is the government's responsibility to make sure that they do. The safety nets are only one little part of the Medicare system, but they are a sign that we need to provide some kind of market signal to those in the system. Certainly the proposal for co-payments that came in the first Abbott government budget was shouted down by the population at large. That has gone; it is off the agenda. If that plan is finished, we have to find other gentle and fair ways to care for Australians to ensure they have the medical services they need—not just today, but in 10 or 20 years' time. We have to ensure too that the Medicare system is still strong and performing well for Australia at that time.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I am pleased to sum up on the Health Insurance Amendment (Safety Net) Bill 2015. I thank members for their contributions to the debate. I present a slightly amended explanatory memorandum which simplifies some of the example calculations and also takes into consideration the indexing of the amount for the greatest permissible gap which occurred on 1 November. This bill amends the Health Insurance Act 1973 to remove the two existing Medicare safety nets and the greatest permissible gap and replace them with a new Medicare safety net. These amendments address issues with the current arrangements and introduce a more efficient Medicare safety net that will strengthen the system for patients and medical practices into the future. Most importantly, the new Medicare safety net addresses issues of fairness. More Australians will be able to access safety net benefits, many of them for the first time. The reduced threshold for access will see an additional 80,000 concession card holders able to access safety net benefits.

Unfortunately, constant chopping and changing of the safety net has seen it become overly complex and failing to support those who need it most. In fact, Labor's shadow health spokesperson admitted on Sky News recently that it has become too complex and it does need to be simplified. I do also ask Labor to justify how in opposition they can continue to support a system that pays patients in some of Australia's wealthiest suburbs an average of $60 of safety net benefits per capita versus just $2 per capita in more disadvantaged areas. The member for Lingiari, whose commitment to Indigenous Australians will certainly never be questioned by me, raised in detail in his remarks the circumstances of Indigenous Australians. We all agree in this place that closing the gap in Indigenous life expectancy should be one of the highest priorities of any health minister, but I do note from the table of distribution of Medicare safety net benefits that I have provided the opposition spokesperson with, divided into SA4 regions, that the North Sydney and Hornsby region has $23 million of safety net benefits in the last financial year and the member for Lingiari's electorate, specifically the Northern Territory outback, has $120,000 of Medicare safety net benefits—$23 million versus $120,000. I hope that gives an indication of the determination of this government to address the issue of fairness in the context of the Medicare safety net.

In government Labor criticised the current safety net arrangements and unsuccessfully tried to fix the very problem that we are here trying to address today. Labor claims to be the party of the fairness test but when it comes to scoring a cheap political point they have no problem with disadvantaging our most disadvantaged. Let me be quite clear about this. Contrary to Labor's claims, and as the evidence of their own reviews show, the people accessing the safety net are by and large from Australia's more well off areas. Those from the most disadvantaged areas rarely access the safety net, because they never pay sufficient out-of-pocket costs to meet the very high thresholds. That is principally because Australia enjoys a very high and growing bulk-billing rate. This bill will address this very issue of inequality, lowering the threshold and ensuring more Australians will access safety net benefits, many for the first time.

Labor has also made some quite outlandish claims about out-of-pocket expenses. Rather than blithely mouthing the inflated numbers provided to them by vested interests, let us look at the facts. In radiation oncology, more than 80 per cent of all radiation oncology services are charged at MBS fees or less. If current billing practices continue, these patients will not experience any appreciable changes under the new arrangements. A standard course of treatment is defined by industry as 20 treatments of three-field radiotherapy. If this treatment were charged at the 2014 average fee, a patient would have a charge of $11,433. Under the extended Medicare safety net, the patient would receive $8,807 in Medicare benefits including safety net benefits, leaving out-of-pocket costs of $2,626. Under the new arrangements, for this course of treatment a patient would receive $8,784 in Medicare benefits including safety net benefits, leaving an out-of-pocket cost of $2,649—a difference of $23 for a standard course of treatment, a far cry from the hysterical $10,000 or $12,000 which has been mentioned by those opposite in the course of this debate. A similar pattern emerges in IVF. Labor overinflates the costs. The member for Ballarat said the average out-of-pocket costs for IVF were $4,000 rising to $10,000 or $15,000 under the government's proposal. Once again let me present the facts. The average out-of-pocket costs are $2,720 for the initial IVF cycle and $5,085 for a second cycle. Under the new safety net proposal these would rise to an average $2,730 and $5,938 respectively. Yes there is a small difference, but not $11,000 as Labor would like to have us believe. This is true in every example Labor gives—an inflation of the out-of-pocket costs or the number of people impacted.

Let me try one more time to appeal to the common sense of my political opponents on the other side of the chamber. The new Medicare safety net will continue to provide additional financial support to those with high out-of-pocket costs for their out-of-hospital medical services. It will continue to be a benefit that is paid automatically once an annual threshold is met. The new Medicare safety net will be much simpler for patients and health professionals to understand. For the first time patients will have some prospect of being able to calculate their out-of-pocket costs in this streamlined safety net approach. The introduction of accumulation caps and universal benefit caps reduces the incentive for some doctors and other health providers to charge excessive fees. Labor's ad hoc approach to capping has proved not to work in reviews undertaken by their government. Their approach allows creative billing in order to game the safety net system. That is why it is essential that we do not vary the caps from one MBS item or condition to another.

As I have said, the eligibility thresholds for the new Medicare safety net are significantly lower for most people, meaning that more patients will benefit. For families and single people who are concession card holders, the threshold will be reduced from $638 in 2015 to $400. For families without concession cards, the threshold will be reduced from $2,000 in 2015 to $1,000. For the first time, single people without concession cards will be placed on a lower threshold than families. Their threshold will be reduced from $2,000 in 2013 to just $700. This is to acknowledge the fact that they are required to meet their health costs on their own.

The new safety net will also address some of the operational and administrative issues relating to the program. The Department of Human Services will be writing to a large number of people to advise them of their safety net entitlements. A number of different ways to facilitate this communication about the safety net will be introduced, including web-based applications to allow people to register their families. This will be more convenient for patients and will build consumer awareness about the program.

There will also be other administrative changes that aim to assist families undergoing difficult times, such as divorce and separation. The definition of a dependent child will be broadened to include children between 16 and 25 who are temporarily unable to study due to ill health. The definition of a spouse will also be broadened to include couples that are separated by illness or infirmity. For example, where one member of a couple is in a nursing home, the new safety net allows the couple to be recognised as a safety net family. This directly addresses some of the inequity that has been raised by consumer groups and patients in the past. These initiatives all serve to make the new safety net fairer for all Australians.

In summary, this bill will introduce a new Medicare safety net that more closely aligns with the original purpose of the safety net arrangements. It will continue to direct assistance to people who have ongoing costs for out-of-hospital care, such as those with chronic conditions. This comprehensive change to the safety net is an essential component of ensuring that we have an accessible Medicare system that is affordable for the individual and the community—a Medicare safety net that is fairer for all Australians. If Labor is as serious about the concept of fairness as they claim, they should support this measure unamended.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Ballarat has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

The question now is that this bill be now read a second time.