Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Hansard source

I rise to speak on the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014. I note that the government is intending to proceed with the savings this bill will realise. In fact, before introducing changes to the Medicare safety net that the government announced in the budget, substantial changes were made to the Medicare safety net that will realise even further savings than the savings realised in this bill.

I acknowledge that the measures in this particular bill—this is not one of the budget bills—were initially announced in the budget Labor handed down in 2013. Obviously, that has been at the front of my mind when we were considering what the Labor opposition will do with these bills. It reflects that Labor was capable of finding—and did find—substantial savings within the health portfolio to ensure the sustainability of Medicare, without ripping the system apart, as this government intends to do. We were able to find savings through means testing of private health insurance—something that I understand the now Abbott government intends to reverse—and through a range of other measure in health. This bill represents one of them.

I note that the measures contained in this bill were not taken in the context of ripping apart Medicare. They were not taken in the context of the introduction of a GP tax, making it harder for people to visit a doctor. That part of the system is, we know, the most efficient part of the system. The measures in this bill were not taken in the context of increasing the cost of medicines to many Australians. They were not taken in the context of ripping over $50 billion from the states for our public hospital system—$50 billion worth of cuts which will start on 1 July and will see bed closures, longer waiting times in emergency departments and longer waiting times for elective surgery. None of these was mooted by Labor, and none of these was under consideration when the measures in this bill were introduced.

Labor will, of course, support sensible measures that ensure the sustainability of Medicare, but that is certainly not what the Abbott government's budget handed down on 13 May will do. In fact, the changes announced in the budget are the most significant attack on Medicare in 30 years. They are changes that the former vice president of the Australian Medical Association Professor Geoff Dobb described as setting health care in Australia back 50 years.

This bill increases the general threshold of the Extended Medicare Safety Net to $2,000 from 1 January 2015. The Extended Medicare Safety Net has been in place since 2004 and provides additional Medicare benefits to Australians who often, due to serious illness, have high out-of-pocket costs for out-of-hospital Medicare services. The Extended Medicare Safety Net was put in place by the former Howard government due to the inequality that was emerging in the health system, where particular groups of people had very high medical costs and were finding those out-of-pocket costs beyond their means.

At present there are two Extended Medicare Safety Net thresholds: a concessional threshold of $624.10 for Commonwealth concession-card holders and recipients of Family Tax Benefit A as well as the general threshold, which is presently at $1,248.70. Both these thresholds are indexed to the consumer price index. The Extended Medicare Safety Net benefits are paid in addition to the Medicare rebate and in addition to any benefits received as part of the original Medicare safety net. As part of these changes, a family or individual will need to incur an additional $751.30 in out-of-pocket expenses for out-of-hospital services, in one year, to qualify for the Extended Medicare Safety Net.

From 1 January 2015, this bill proposes to temporarily suspend the automatic indexation arrangements of the general threshold. This bill also proposes to remove the requirement for the chief executive officer of Medicare to require in writing that a family registered for the Extended Medicare Safety Net confirm their family composition when they approach the Extended Medicare Safety Net threshold. This is needed because Medicare keeps track of individuals' Medicare expenses, for the purposes of calculating eligibility for the Extended Medicare Safety Net, but is unable to do so for families. The changes proposed in this bill instead allow the CEO to determine the most appropriate method of contact.

I note from the Department of Human Services' evidence before the Senate community affairs committee on this bill that there is no intent to reduce the information people get about where they are up to, in terms of the safety net entitlement or in ensuring they are aware that they are approaching the threshold. That is something Labor welcomes. Labor is, however, concerned about what is happening overall in this government's budget and what this government intends to do to Australia's health-care system.

Increasing the cost of health care is consistent with this government's approach to the health portfolio. To date, the government's approach to health has been to restrict access to services, increase costs and introduce changes that will result in a more inequitable health system. I note that the additional changes to the Medicare safety net announced in the budget will result in savings of over $267 million over four years. These are savings that will be realised by providing far less compensation to people when they reach the safety net. In the budget measures, the government has meant that people will hit the threshold a lot of earlier—but unfortunately they will not get as much money back once they do hit the threshold.

These are substantial changes proposed in the budget to the Medicare safety net. In ensuring that people do not become confused about what is happening with the safety nets—because they are inordinately complex and I acknowledge that has been the case for some time—it was my expectation that the government would not seek to progress this bill, that it would wait until it introduced its budget measures. However, the government has taken the decision to proceed with this bill, so we will have a period where the Extended Medicare Safety Net thresholds will have one measure in place and then, following the government's budget measures—if they pass through both houses of parliament—in 2016 there will be an entirely new system for the safety net. That is something the government has decided to do, and there will be substantial confusion for many people as those safety nets change. Obviously that is a matter for the government, given it has decided to proceed with this bill.

The intention of this bill when it was mooted under Labor's last budget was to better target the extended Medicare safety net. It would have realised savings of around $105.6 million over four years, all of which were designed to be reinvested into Australia's health-care system. I note from the budget handed down on 13 May that the proposed government changes to the Medicare safety net will come into place from 1 January 2016. The budget changes will see the original Medicare safety net, the Extended Medicare Safety Net and the greatest permissible gap replaced with a new Medicare safety net from 2016. They will realise savings of $267 million—not savings, according to the government, that will be reinvested for accessing health-care services. They are to be reinvested, I understand, in the Medical Research Future Fund. Those $267 million will be realised by reducing the amount the government covers once a family or individual reaches the safety net.

The budget change proposes to pay 80 per cent of any out-of-pocket costs capped at 150 per cent of the Medicare benefit schedule fee. The out-of-pocket costs that accumulate to reaching the safety nets is also proposed to be capped at 150 per cent of the MBS fee. One of Labor's principle concerns about the changes being proposed overall to health care, by this government, is the effect upon out-of-pocket costs. We have a Senate inquiry looking at out-of-pocket costs in health care and what is happening to people. Many are experiencing significant pressures on their family budgets because of out-of-pocket costs in health care. We know they have been increasing.

In 2011 and 2012, out-of-pocket spending on health and medical services by Australians was a $24.8 billion. This percentage is high by international standards, and the changes the government is proposing in its budget will significantly worsen that situation. In fact, the government's measures are quite deliberately designed to transfer costs from the Commonwealth onto individuals through higher out-of-pocket expenses. The government makes no apology for that; they are quite deliberately increasing out-of-pocket costs. They call it transferring the responsibility and making people share the responsibility for health care, but I am not sure that people understood that this is what they were getting when and if they voted for the Abbott government.

The Senate Community Affairs Legislation Committee certainly considered this bill, and it should be noted that the submissions were received before the government handed down its first budget. Submissions received argued that increasing the Extended Medicare Safety Net threshold to $2,000 will affect healthcare affordability for consumers, with adverse implications for individuals' health and wellbeing. National Seniors Australia observed that it may be difficult for consumers to find this extra money each year if they are on a tight budget.

The Consumers Health Forum noted that Australians, on average, spend more than $1,000 a year in out-of-pocket costs. They warned that costs are already forcing consumers to make difficult decisions, including whether or not to seek medical attention, fill prescriptions and prioritise their own healthcare needs. National Seniors Australia provided similar evidence to the community affairs committee, noting that, for older Australians, out-of-pocket costs can escalate quickly for a variety of reasons. These included the gap between the Medicare rebate and fees charged by service providers, the lack of safety net coverage, the cap on specific items in the Medicare Benefits Schedule, the lack of private health insurance cover and gap payments and/or annual limits on services covered by private health insurance.

We know—for example, from the lack of modelling done on the impact of the proposed GP tax on Australians with chronic illness—that this government has not properly considered what effect its hurtful policies will have on the health care of Australians and on the financial viability of many families' budgets. The changes proposed in the budget will be particularly harmful for Australians with a chronic illness, and it concerns me that, in considering this bill, none of the people who were able to put in submissions to the Senate Community Affairs Legislation Committee had any knowledge of all of the measures that the government intended to introduce that would be increasing out-of-pocket costs.

With respect to this bill, it was noted in submissions to the Senate Community Affairs Legislation Committee—with the Consumers Health Forum particularly noting—that:

There are a significant number of consumers experiencing chronic illness. Some of that is debilitating; some of it is manageable. They will obviously be the highest end users who are likely to reach the threshold quicker.

These concerns were, of course, shared by Diabetes Australia, who noted that:

For many, the safety net and its increased reimbursements is an important contribution to the significant expenses associated with managing their condition.. Raising the safety net threshold and having people pay more may worsen access to the recommended cycle of care and the recommended [six] monthly monitoring.

The report from the Senate Community Affairs Legislation Committee noted submissions from the Consumers Health Forum and Diabetes Australia, where they said:

… there are consumers with chronic health conditions and high-level healthcare needs to whom the concessional EMSN threshold does not apply. Diabetes Australia expressed concern about these consumers' capacity to access affordable healthcare, to manage their illness and prevent the development of further complications. … A representative from CHF stated: 'there are high users of the system who are not necessarily concessional users of the system'.

What is important to keep in context is that this is one change that the government proposes to make as part of a suite of changes that will make health care much more expensive, less accessible and much less equitable in this country.

The key question about the decisions made in the recent budget, particularly when it comes to health care, is absolutely one of fairness. The Prime Minister claimed before the election—which we now know not to be true—that there would be no cuts to health. The budget handed down on 13 May well and truly blew that out of the water. There is no question that the budget attacks low- and middle-income earners; it attacks parents, it attacks workers, it attacks families and it attacks some of the most vulnerable in our communities.

The change proposed in this bill is from a government that is intent on ripping $80 billion dollars out of health and education and $50 billion out of Australia's public hospital systems—again, cuts which start on 1 July. It will mean fewer beds, it will mean pressure on emergency departments and it will mean longer waiting times for elective surgery. In their budget, the health minister and Prime Minister have quite deliberately shifted the cost of health care onto the states and onto patients. It is important to see this bill now in that new context.

The government is proposing, through its budget measures, the lowest share of Commonwealth funding for hospitals since the Commonwealth started funding hospitals after World War II. After decades of Commonwealth-state squabbling over cost shifting, the health and hospitals reform that Labor was able to negotiate in government led to a new accord between the Commonwealth and states—one that saw the Commonwealth agree to fund 50 per cent of efficient growth in hospital funding. That was a commitment that was shared in their pre-election policy by the Prime Minister before the last election.

Instead, what we saw in this first budget is that the Prime Minister has washed his hands of responsibility for Australia's healthcare system and the wellbeing of Australians. Why is the government doing it? The government is doing it because it is determined to dismantle Medicare piece by piece and create a two-tiered health system here in this country—one in which the private sector plays a much stronger role and one in which we see a two-tiered system emerge where, if you have money, you have one set of access and one set of services available to you, and if you do not have money, you have a residual system. The Commission of Audit belled the cat on that one. As part of their recommendations, they very clearly said that one of the options the government should explore is having Medicare as a residual system—their words, not mine.

Not content with just ripping up the national partnership agreements on public hospitals, prevention, public dental and improving public hospitals—as well as abolishing Australia's first National Preventive Health Agency and taking $3 million out of the National Tobacco Campaign—this government also wants Australians to pay more to visit their doctor and pay more for their medicines.

The changes in this bill, therefore, will be much harder to be absorbed because of the government's decision and its intention to introduce a $7 tax every time Australians visit their doctor. As we are to understand it, the $7 GP tax will not go towards any safety net, so you will not be able to count that as an out-of-pocket cost that goes towards your safety net. The Prime Minister and the Minister for Health are shifting the cost of health care onto patients who in this country already pay very high out-of-pocket costs. The government wants to slug every Australian an extra $7 when they visit their doctor, and that is not just when you go for a routine check-up with your doctor or when you get a cold; the $7 applies to pathology. It applies to radiology, so when you go and get an X-ray you are also slugged the $7 GP tax. Right across the board Australians will be hit with this $7 tax. The health minister and the Prime Minister claim that this $7 GP tax is to ensure the sustainability of their healthcare system. In fact, I saw the Minister for Health out doing a press conference again, trying to argue that case. But, as the President of the AMA, Associate Professor Brian Owler, said on Jon Faine just last Friday:

At the end of the day the GPs are not the problem with the sustainability of the health care system, they are the solution.

He is absolutely right.

The government's argument for the changes that it wants to bring in with the budget is based on a problem that does not exist and figures that are just plain wrong. We have a Treasurer who does not know the average number of times Australians see their doctor each year. He persistently gets that figure incorrect. The health policies of this government are ill-conceived and they will certainly hurt patients. General practice is the most efficient and cheapest part of the system; it is where people go to stay well, to get well when they are suffering for illnesses and for preventative health or to manage their chronic conditions. It is where we want them to go to manage those conditions.

So why would you want to put a barrier in place to prevent people from accessing the health care they need? The reason those opposite want to impose a tax on families, on pensioners and on patients every time they visit a GP is because they want to see the end of universal health care as we know it. They want to see an American-style two-tier health system in this country, where those who can afford health care get the service and those who cannot only get part of the service.

The coalition claims that the money from the tax will be used to fund the Medical Research Future Fund. While investment in medical research is critical, you do not do it off the back of sick people. You do not fund it by taxing families, pensioners and patients every time they visit their doctor. Last week at consideration in detail the Minister for Health could give no guarantee that the level of National Health and Medical Research Council grant or fellowship funding would continue at the same level and be guaranteed over time. So we know what the government's real intention is for the Medical Research Future Fund. It is about over time replacing NHMRC funding.

This GP tax is a very poor health policy. It is a bad health policy. It is policy that hits middle- and low-income earners the most. It hits the most vulnerable Australians—those with chronic disease—absolutely the most. We know that the health minister and the government have done absolutely no modelling on the impact that this $7 GP tax will have on the chronically ill, on GPs themselves and on emergency departments—no modelling whatsoever on a tax that hits everyone. And around the country not one health care expert believes that this is a good idea. It is a pretty big feat, frankly, to do something that no health minister has ever done before: unite the entire health community against you and against your policy. It is a pretty big call for a health minister actually to have been able to do that. Around the country, as I said, there is not one healthcare expert who believes this is a good idea.

All the Prime Minister can say when questioned on his cuts to health and, in particular, cuts to hospital is: 'Where's the problem? I don't see a problem. What's the big deal here?' It just shows the contempt that this Prime Minister has for our health system and for patients and families across the country. This Prime Minister does not think it is a big deal that he is ripping $50 billion out of public hospitals. This Prime Minister does not see a problem with slugging Australians with a $7 GP tax every time they get sick and need to visit their doctor or access pathology or radiology. This Prime Minister does not see a problem with fewer hospital beds, increasing elective surgery waiting times or more pressure on emergency departments. He does not see a problem at all. And this Prime Minister does not see a problem with ending universal healthcare and Medicare as we know it.

On this side of the House we do see a problem. We see a very big problem, a problem that sees the ripping apart of Medicare at its seams. Its fundamental principle is universal access. It is a system that has served this country well for 30 years and should continue to serve this country well but for this government, which is absolutely determined to dismantle it.

The measures that are contained in this bill, of course, were thought of long before we had any of the government's proposed changes. They were, as I said at the outset, contained in Labor's last budget. They are measures that, in fact, Labor thought long and hard about but were measures we felt were necessary savings to improve the capacity of the health system to continue to provide health care. They were savings that we found without ripping apart Medicare, without imposing a GP tax every time you go to visit the doctor and without ripping $50 billion out of the states' agreements for public hospitals. All of those measures are things the Abbott government has decided are priorities in health care. I remain concerned that all of the policy decisions in health being made by this government are all about increasing costs to patients, removing responsibility from the Commonwealth for the provision of health care and that we are seeing increasing out-of-pocket costs in health beyond what was envisaged when Labor first announced details in this bill.

I remain concerned that the government has taken the decision to proceed with this bill despite the fact that it intends to introduce further changes to the safety net that will realise over $200 million in savings and that there will be a very confused system of safety nets in this country until those measures are debated and, if they are, passed. That being said, the opposition will not oppose this bill. I recognise that this was a bill originally introduced by Labor. But the government should not take that to mean that that will be the same for any other changes to the Medicare safety net, changes to the Medicare safety net which in fact rip over $200 million out of out-of-pocket costs for consumers. I now move a second reading amendment:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading the House notes that the bill is one of many changes the government is proposing that will increase the cost of healthcare”

The government has taken the decision to proceed with this bill in the context of substantial changes to the health care system which will see massive increases in out-of-pocket costs for Australian consumers. It has taken the decision to proceed with this bill in the context of the GP tax, slugging every Australian $7 every time they go to visit the doctor—$7 for every child in every family when they go to visit a doctor; in the context of charging $7 every time someone needs to access radiology and pathology; cutting $50 billion out of public hospitals, those cuts to start on one July this year; and taking the decision that will see a substantial increase in the cost of medicines when people actually need to access those as well.

So I note that the government is proceeding with this bill in that context as well as taking the decision to proceed with this bill in the context of its own proposals to substantially change the Medicare safety net. I do happen to believe that there is a debate to be had around the better targeting of the Medicare safety net. I think there was a debate—and that is exactly what Labor was trying to do with these bills. There are many Australians, particularly Indigenous Australians, for example, who never reach the extended Medicare safety net but who do have substantial problems with their health. I think there is a case to argue around the better targeting of these safety nets and sometimes some of the perverse outcomes that occur when you are actually talking about pricing within the system. I am not convinced that what the government is deciding to do in fact addresses any of that. Its budget measures are, in fact, really about substantial savings measures. It is claimed that they provide a better safety net, that people will hit the safety net earlier—but in fact they will get less money back, so I am not sure how that better targets the system.

As I said, the measures contained in these bills were originally proposed by Labor. We will not stand in the way of those. But I do remain very concerned about what is happening in out-of-pocket health care costs and I certainly remain concerned that the government has very, very little care for what in fact is happening for the health of Australians and has very, very little care about what it is actually doing in health policy. In fact, it is trying quite deliberately attempting to transfer costs on to patients, to dismantle Medicare and to introduce a two-tiered health system—one that Labor will not let the government do and one that certainly the Australian Labor Party will be standing against.

Debate adjourned.

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