PRIME MINISTER 14/ 92
JOINT STATEM: ENT BY THE PRIME MINISTER, THE HON P J KEATING
MP, AND THE MINISTER FOR HEALTH, HOUSING AND COMMUNITY
SERVICES, THE HON B HOWE MP
CABINET REMOVES MEDICARE CO-PAYMENT
Federal Cabinet today agreed to remove the Medicare
co-payment of $ 2.50 and restore the $ 3.50 rebate reductions
announced in the August 1991 Budget.
These changes will take effect from 1 March 1992.
This decision was made to remove uncertainty about the
health system and to address concerns about a decline in
bulk billing.
Today's decision will restore the Medicare benefits
provisions for GP services to exactly how they were before
the change was introduced.
The improved safety net provisions, introduced on 1 January
1992, will remain. These give families higher Medicare
benefits once they exceed $ 246 per annum in gap payments.
GPs are expected to pass the full benefit of the change on
to patients.
In this way the decision will ensure that Medicare will
remain a truly universal health insurance system for all
Australians. A viable, efficient universal health system is essential if
people are to get proper care and support regardless of
income. This is particularly important now when so many people are
already experiencing difficulty because of the recession.
The core of the 1991 Budget health changes involved measures
designed to deal with growing health costs and the overuse
of medical service, directly by making reforms to how
general practitioners operate. These reforms will be
retained.
In this way the Government will be dealing with the
structural problem of overservicing at source.
These changes are aimed at reducing the numbers of GPs,
reducing the extent to which GPs are dependent on the
current open-ended fee-for-service system, and encouraging
GPs to become more cost-effective in their use of services
such as pathology tests and pharmaceuticals.
The Cabinet agreed that in current circumstances the
co-payments and the previously announced reduction in
rebates were not needed and were a burden on the health
system.
Given the crucial importance of keeping inflation low, the
substantial inflationary impact of the co-payment and the
cut in the rebate was also a concern.
The inflationary impact would also have increased indexed
Commonwealth outlays on social security and payments to the
States by more than $ 200 million in a full year.
Removing these health charges will remove around 0.4
percentage points from the CPI.
These changes to the health system will directly add around
$ 51 million to the Budget in 1991-92 and $ 239 million in
1992-93.
11 February 1992