Australia’s medical insurance system can be called anything, but not simple, or easy to navigate through. And with the recently announced National Disability Insurance Scheme bound to increase taxation, it looks like the Gillard government is actively making it more complex. As if that weren’t enough, the public Medicare system is also in for some changes, as the cost of health care for Australian patients is about to be increased. At the moment, Medicare-insured patients have out-of-pocket costs that exceed $1,221.90 paid for via Medicare, within the bounds of the cheaper 80 per cent of supplementary costs. Alternatively, patients can benefit from Medicare coverage of their out-of-hospital costs for the rest of the year, within the bounds of the coverage cap.
Soon enough, however, the system will change: starting with January 2015, patients will be covered costs that exceed $2,000, a move likely to affect 150,000 families around Australia and 30,000 single individuals. The concessional contributions cap for the safety net will stay put at $610.70. The initiative, which indexes Medicare costs paid out to doctors, is expected to save $664 billion from the state budget by 2019. It was initially meant to come into force in November of this year, but it will take effect from July 2014 onward. At the moment, doctors say they are already billing patients in bulk, to a larger extent than ever before. From the point the fees start being indexed, doctors will no longer be allowed to bill Medicare for standard consultations and standard disease management items on the same day – a further savings attempt, meant to bring $120 million to the Australian state budget over the course of the following four years. Further savings efforts are being construed against fraud and erroneous billing to Medicare: the estimated amount to be saved this way is $22 million.
The effects of these measures are difficult to assess at the moment, in terms of efficiency. On the one hand, the means-testing measure against private health insurance was meant to bring about major savings. On the other hand, though, it caused 120,000 Australians to sign on for private health insurance right before the means testing scheme came into effect, in the final semester of 2012. This, in turn, will only augment rebate spending, by an estimated $2.2 billion until 2017. At the same time, Australians seem to be focusing on their health now more than ever. Since they’re going to the doctor more often and taking out more prescriptions for medication, this, too, will likely boost Medicare costs by $2.2 billion.
As for patient and doctor satisfaction – suffice to say these health care reforms will likely generate a debate. Patients are bound to be dissatisfied with the increased costs, but the more paradoxical reality is that costs are also expected to increase for doctors, who say they are already attempting to cut Medicare fees at all costs. Add to this some upcoming spending, such as a Medicare communication campaign, whose costs have been estimated at $10 million, and the proposed savings are already beginning to look paltry.
In the meantime, more Australians than ever are choosing to take out private health insurance, according to the latest data. This trend goes against the prediction according to which means-testing the rebate system would dissuade private health policies. It may tie in with the fact that the data was harvested during a period when a lot of people were pre-paying their premiums, right before the implementation of the means-testing. While the long-term effects of this health-related reform are yet to be seen, it’s equally likely that the upcoming cost increases to the public health coverage system are determining Aussies to see the benefits of going it private.
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