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Broken promises - the MedicarePlus safety net

By Brian Harradine - posted Thursday, 28 April 2005

The lives of around 300,000 families and individuals just got a lot harder. They are the people who will now miss out on the benefits of the MedicarePlus safety net because the Federal Government has decided to gut last year’s reforms.

While the cost of visiting a doctor is growing, Medicare is covering less of that cost. That’s why, in March 2004, I supported an improved version of the MedicarePlus safety net. It was the only way to guarantee that lower and average income earners wouldn’t be crippled by out-of-pocket, non-hospital medical costs.

The independent senators, Shayne Murphy, Meg Lees, Len Harris and I, voted to pass a much-improved MedicarePlus package through the Senate. By negotiating with the Government, we were able to achieve a package containing an extra $427 million in benefits for Australians through 2006-2007. Apparently the safety net has proved to be so popular, that sum has increased to over $1 billion.


The package, which independent senators agreed to, included additional funding for bulk-billing, a new safety net, and coverage of some allied health services previously excluded by Medicare, such as physiotherapy.

My primary concern was that Australians’ access to GPs or specialists be based on the condition of their health, not on their ability to pay.

Because visits to GPs and specialists impact on the cash flow of families, it is important to alleviate patient’s cash flow burden. It would have been more in keeping with the principles of the Medicare system to inject extra money into the system so that the cash flow problem is minimised at the doctor’s surgery. But the Government was not willing to do that.

We managed to make the safety net much more generous and accessible. Our package reduced the $500 threshold for concession cardholder and Family Tax Benefit (A) recipients to $300. For all others, we reduced the $1,000 threshold to $700. What this means is that for every dollar spent over the threshold, patients will receive 80 per cent of all their non-hospital, out-of-pocket expenses back. Hence, instead of 200,000 families and individuals having access to the safety net under the original MedicarePlus, we increased the number of beneficiaries to approximately 490,000.

In my own state of Tasmania, an extra 6,600 families and individuals had access to the safety net as a result of the negotiations, or nearly 12,000 extra beneficiaries, in total.

The Government has decided to renege on those negotiations.


We wanted to ensure the lower threshold was as low as possible to provide lower income, poor and chronically ill people with long term protection from rising health costs and out-of-pocket fees. Due to the inadequate indexation of Medicare, bulk-billing incentives will, over time, erode. Australians therefore must have some security.

In our negotiations with the Government, it was clear they were unwilling to put in the money required to provide some guarantee of reviving Medicare bulk-billing rates. So the only way to offer some protection for people against high, out-of-pocket, non-hospital medical costs was to have a safety net.

A safety net is necessary because while medical costs are increasing, the insurance coverage offered to patients through Medicare is not keeping up. The increasing gap between the Medical Benefits Schedule and what doctors charge patients is hurting Australians.

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Article edited by Leah Wedmore.
If you'd like to be a volunteer editor too, click here.

An edited version was first published in The Australian on April 20, 2005.

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About the Author

Senator Brian Harradine was an independent Senator for Tasmania.

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