The Turnbull government has attempted to quash concerns about its commitment to Medicare, lifting the freeze on the indexation of bulk-billing incentives for general practitioners from 1 July.
It will also “phase in” the reintroduction of indexation for other items on the Medicare benefits schedule over the next two years, scrapping its plan from last year’s budget to keep the freeze on indexation in place until 2020.
The treasurer, Scott Morrison, says it should “put to rest any doubts” about Medicare and the PBS, a direct response to Labor’s powerful attack in last year’s election campaign.
He says the government will also establish a new Medicare guarantee fund to pay for expenses on the MBS and Pharmaceutical Benefits Scheme, with money raised from an increased Medicare levy paid into the fund.
“We are lifting the freeze on the indexation of the Medicare Benefits Schedule,” he said on Tuesday night. “We are also reversing the removal of the bulk-billing incentive for diagnostic imaging and pathology services and the increase in the PBS co-payment and related changes.”
The government will also introduce a new Medicare guarantee bill, establishing the Medicare guarantee fund that by law can only be used by the government to pay for expenses on the MBS and PBS.
Morrison says an additional proportion of the government’s income tax revenue will be paid into the fund to cover the government’s MBS and PBS costs.
“This additional transfer is needed because the Medicare levy has not paid for all the costs of running the MBS and PBS for decades,” Morrison said. “In fact, it meets less than half these costs.”
Each year before the budget, the government will adjust annual contributions to the fund to ensure that it meets the forecast expenditure for the MBS and PBS.
“The Medicare guarantee bill will provide transparency about what it really costs to run Medicare and the PBS and a clear guarantee of how we pay for it,” Morrison said.
The government says it will also increase hospitals funding by an additional $2.8bn over four years, with an additional $115m in mental health, including funding for rural telehealth psychological services, mental health research and to prevent suicide.
The “phase in” of the reintroduction of indexation for certain items will include:
- Bulk-billing incentives for GPs will be index from 1 July 2017
- Standard consultations by GPs ad specialist attendances will be indexed from 1 July 2018
- Specialist procedures and allied health services will be indexed from 1 July 2019
The former Labor government first froze Medicare indexation for nine months in 2013.
The Coalition government then decided not to index the MBS for four years from 1 July 2014 until 1 July 2018 and it extended the freeze by two more years to 2020 in the 2016-17 budget.
