Let Scrubs Explain The Medicare Rebate Because It's Important

Will you have to pay more to go to the doctor?

If you're a nerd, you may have heard a lot of people talking about the Medicare rebate during the election campaign.

You may not know what it all means, but it is quite important, so we're going to have a crack at explaining it for you. Ok, here goes.

What is Medicare?

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Medicare is Australia's public health insurance system. All Aussie taxpayers pay a 2% Medicare Levy, which goes into a big pool of money which is used to pay for most of our health stuff.

It doesn't make going to the doctor, getting tests or x-rays free, but it does subsidise the costs of visits to these services (i.e. pays for most of it).

The list of services you can access is called the Medicare Benefits Schedule, and the amount of money you can claim back after going to the doctor is called the Medicare Rebate.

How does the Medicare Rebate work?

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If a doctor bulk bills, you don't pay anything upfront. Instead the GP charges the Medicare service fee (a set amount) and gets directly reimbursed by the government.

If a doctor doesn't bulk bill you have to pay upfront, and what you pay will change doctor to doctor as they set their own prices. You then apply to Medicare to get a rebate, which won't reimburse the full cost of your visit. That gap is called an "out-of-pocket" expense.

For a GP visit, the Medicare Rebate is $36.30, but it might cost you more on the day.

The Australian Medical Association (AMA) estimates the rebate only covers half of the recommended consulting fee for doctors.

So if you pay $70 upfront for the doctor and get a $36.30 rebate you'll be out-of-pocket $33.70.

Why did the Government "freeze" the Medicare rebate?

The Medicare rebate was frozen at $36.30 in 2013 by the Labor Party to stop the increases in health spending because they said the budget was blowing out. At the time the Coalition criticised them for it.

When the Abbott/Turnbull government came to power, they had an idea about how to reform the health industry to make it rely less on government money, such as:

- a $7 co-payment for going to the doctor

- a ten-minute minimum consultation time

- a $5 reduction in the medicare rebate for "common GP consultations"

All of these ideas were extremely unpopular with voters and were dumped by then PM Tony Abbott.

Instead, in the 2016 Budget (earlier this month), treasurer Scott Morrison announced the government wanted to keep the Medicare rebate frozen until 2020.

Health minister Sussan Ley says she argued to get the freeze lifted but was stopped by the Finance and Treasury departments.

Ley told the ABC, "I've said to doctors I want that freeze lifted as soon as possible but I appreciate that Finance and Treasury aren't allowing me to do it just yet".

Does this mean I'll have to pay more to go to the doctor?

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Most probably.

Because of the rebate freeze, doctors will be paid the same amount as they were in 2013, even though the cost of running a doctor's surgery is going up.

The Australian Medical Association and the Royal Australian College of General Practitioners have started a campaign against the freeze.

AMA president Brian Owler says the freeze means doctors might have to pass the increasing costs on - either by stopping bulk billing or making patients pay $15 to $20 more for each GP visit.

Some people say this is a $20 co-payment by the "back door".

OK but what if I can't afford it?

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The policy is regressive.

That means, just like the GST, you will pay the same amount no matter what you earn, not as a percentage of your income.

So no matter whether you earn $30k or $100k you'll still pay $20 more to go to the doctor.

If fewer doctors bulk bill, it means more people might put off going to the doctor if they can't afford to pay upfront and be left out of pocket.

This could create a two-tiered health care system in Australia, where people who can afford it get the best care, while those who can't afford it don't go to the doctor.

When systems like this have been put in place overseas, rather than saving money, they have ended up costing more because people end up in hospital emergency rooms (and hospitals cost more to run than GP offices).

What is Labor going to do about it?

Last Wednesday, Labor announced it would spend $12.2 billion over a decade to stop the freeze on rebates and make sure doctors got more $$ for each visit.

This would kick in from the 1 January 2017, if Labor is elected.

Bill Shorten says within 100 days of being sworn in, his Labor government would legislate a "Medicare guarantee", protecting it from being privatised and stopping any co-payment.

The Coalition doesn't think Labor's plan will work, because they say the policy is unaffordable given the state of the budget.

Spending on health has grown 74% over the past decade and the Liberal party says that level of expenditure isn't sustainable.

So to sum up, Labor froze the rebate in 2013, the Liberals want to keep it frozen, and now Labor says it wants to unfreeze it.