Federal budget 2017: End of Medicare freeze a bulk-bill boost

Patients are more likely to be bulk billed after the Turnbull government announced the end of the Medicare freeze.

Patients are more likely to be bulk-billed after the Turnbull government last night announced the end of the Medicare rebate freeze — at a cost of $1 billion over three years — and scrapped plans to dump incentive payments for pathology and diagnostic imaging.

In a major departure from its Abbott-era approach to the portfolio, the Coalition has also forged agreements with disaffected lobby groups and offered Australians the reassurance of a Medicare Guarantee Fund to cover future budgets.

The freeze on indexation was introduced by the former Labor government — it was extended by the incoming Coalition government after the failure of its GP co-payment policy — and has prompted warnings that doctors would have to start charging ­patients or charge them more.

From July 1, the government will resume indexation of its bulk-billing incentive payment, and extend the thaw to consultation fees for GPs and specialists (July 1, 2018) and specialist procedures and allied health (July 1, 2019).

The government has also decided to retain bulk-billing incentives for pathology and diagnostic imaging, at a cost of $936.7 million over five years, and also provide indexation for selected imaging — CT scans, mammography, fluoroscopy and interventional radiology — from 2020.

During the election campaign, Prime Minister Malcolm Turnbull and then Health Minister Sussan Ley negotiated for the pathology sector to stop fighting the loss of incentives in exchange for regulated rent relief. However, the budget only commits to enhanced auditing of the existing rental regulations at a cost of $18m over four years.

The Department of Health will ramp up its Medicare compliance efforts, and take extra steps to recoup rebates from rogue doctors, to generate an extra $103.8m over four years. A review of Medicare items will also continue.

The rollout of Health Care Homes will be delayed and staggered, with 20 selected sites to start service from October 1 this year and the remaining 180 sites from December 1. Community pharmacy will also be included in the initiative at a cost of $30m.

The Medical Research Future Fund will start making distributions, while there are also targeted mental health initiatives, changes to after-hours care and the benefits available to foreign nationals in Australia.

The government is also banking on efficiencies generated by My Health Records helping to offset the cost of rolling out the opt-out electronic record scheme by $305.5m over four years. It will also persevere with a new digital payments system, allocating another $67.3m to work with the private sector, and pump more money into the transition to a National Cancer Screening Register.

Having drawn a line through the most contentious Coalition health policies, the government has also sought to reassure voters of its commitment to healthcare with the creation of an extraordinary Medicare Guarantee Fund.

Delivering his budget speech last night, Scott Morrison said, “tonight, we put to rest any doubts over Medicare and the Pharmaceutical Benefits Scheme”.

The Treasurer last night announced the Coalition’s promise to support Medicare would be legislated. The new Medicare Guarantee Fund will be used to pay for Medicare and the PBS.