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Howard Government’s Proposed Changes To Medicare

Last updated on March 21, 2024

This is the text of the official statement from the Prime Minister, John Howard, announcing proposed changes to Medicare.

Statement from Prime Minister John Howard.


I announce today a $917 million package, A Fairer Medicare, to strengthen Australia’s universal health care system by making general practitioner (GP) services more available and more affordable.

The package builds on my announcement last week of a 17% real increase in Commonwealth funding for public hospitals through the Australian Health Care Agreements with the states and territories.

Together, these packages represent a major investment in two key pillars of Medicare:

  • Universal access to medical services, through the 85% rebate of the schedule fee.
  • Universal access to free treatment as a public patient in a public hospital.

A major objective of A Fairer Medicare is to address the shortage of doctors in certain areas, particularly in rural and outer-metropolitan areas. Many Australians living in these areas cannot easily find a doctor when they need one. In addition, the availability of bulkbilling depends to a large extent on where people live. This is not fair, particularly for people on low incomes and people who need to visit a doctor frequently.

A Fairer Medicare will benefit all Australians, regardless of where they live, and especially those who need Medicare most: people on low incomes and people whose illness requires them to seek frequent medical care. The features of A Fairer Medicare include:

More doctors where they are needed most. We will provide more doctors by increasing the number of places in medical schools around Australia by 234 every year and by increasing the number of GP training places by 150 every year. The additional medical school places will be bonded to areas of doctor shortage and the additional training places will be targetted to rural and outer-metropolitan areas.

These measures complement an $80 million initiative in the 2002 Budget to put more doctors into outer-metropolitan areas where shortages are particularly acute. While this initiative is already beginning to produce results, action is being taken to speed up its capacity to bring more doctors to outer-metropolitan areas this year, before the measures in today’s package start to take effect.

Incentives for GPs to bulkbill pensioners and Commonwealth concession card holders. GPs agreeing to bulkbill these patients will receive incentive payments on a sliding scale depending on the degree of remoteness of their practice. For example, GPs in small rural towns and remote areas could receive an average annual payment of $22,050. This arrangement will strengthen the availability of bulkbilling for many thousands of Australians on low incomes.

Direct payment of the Medicare rebate to doctors for all services. GPs agreeing to bulkbill pensioners and concession card holders will receive Medicare rebates for all services within two days via HIC Online. This will be a major new benefit for patients who are not bulkbilled and currently have to pay the doctor’s full fee and then complete and lodge a Medicare claim form. This is often time-consuming and inconvenient. Now, they will just pay the difference between the doctor’s fee and the Medicare rebate and there will be nothing more to do.

Practice nurses for outer-metropolitan areas. An additional 457 full-time nurses will be made available for GP practices in areas of workforce shortage that participate in the new bulkbilling arrangements. This will benefit around 800 GP practices, in outer-metropolitan areas particularly. This initiative extends the current rural practice nurse programme and allows practices the option of employing allied health professionals.

New safety nets to protect against high out-of-pocket medical costs. Two new safety nets will be provided: a Government-funded scheme to help pensioners and Commonwealth concession card holders with $500 or more in out-of-pocket costs for out-of-hospital medical services in any year and private health insurance cover for all out-of-pocket costs for out-of-hospital services exceeding $1,000 in any year for other patients. The new private health insurance cover will attract the Government’s 30% Rebate, will be available for a very modest annual premium and will not require other cover for hospital or ancillary costs to be taken out.

In addition to this package, the Government will provide an incentive for GPs to treat veterans holding Gold or White Cards at no cost through the Local Medical Officer (LMO) scheme after 1 July next. This incentive will be a payment of $3 for each service in addition to current rebate arrangements. Although a formal part of recent discussions with the medical professions, this new payment will be part of an independent agreement between the Government and LMOs. More detail on this new incentive scheme will be provided by the Acting Minister for Veterans’ Affairs, the Hon Larry Anthony MP.

The Minister for Health and Ageing, Senator The Hon Kay Patterson, has established a GP Red Tape Taskforce to reduce GP administrative and compliance costs from Commonwealth programmes. The Taskforce will consult and work closely with the medical profession to ensure that doctors can spend more time with patients and less on paperwork.

While A Fairer Medicare introduces some new features to our health system, the things we value about Medicare will not be changed. A Fairer Medicare does not introduce a copayment for GP consultations or a means test. All Australians will remain eligible to receive the Medicare rebate when they visit a doctor and all doctors will remain at liberty to choose whether they bulkbill or not, as has been the case since the introduction of Medicare. A Fairer Medicare reaffirms the Government’s commitment to Australia’s universal health care system.

The Minister for Health and Ageing, Senator The Hon Kay Patterson, has issued a separate media release and information kit with more detail on individual initiatives.

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Malcolm Farnsworth
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