Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

I rise to speak on the Health Insurance Amendment (Safety Net) Bill 2015. A fortnight ago we had the 40th anniversary of the dismissal of the Whitlam Labor government. It was hardly surprising, given the tumultuous nature of that event, which I personally remember vividly, that at that time we saw discussion about the idea of the republic and the propriety of the actions of the Liberal and National parties in blocking supply. To put it in modern context, it would be like the Labor opposition and other non-government senators taking advantage of the highly unpopular 2014 budget and the unpopularity of former Prime Minister Abbott to block supply and to seek to regain office, notwithstanding the 2013 election outcome. It was a deeply unprincipled and opportunistic act.

It is, in my view, even more important now that we recall the Whitlam legacy, which includes free tertiary education, which I publicly supported on a number of occasions, and free and universal health care. It is well known that the Whitlam initiative of Medibank was attacked by the Fraser government but reinstated as Medicare by the Hawke government. Medicare, the Whitlam legacy of free and universal health care, has been an outstanding success. It has given Australia a health system which is the envy of the world. And if you doubt this, just think about overseas travel. Every Australian who is fortunate enough to travel overseas is acutely aware that they do not want to fall ill or have an accident in another country because, in other countries, healthcare costs are higher and healthcare standards are lower than they are in Australia. Universal health insurance has been an outstanding success. But the Liberal party hates the Whitlam legacy and they hate public health. And so they give us bills like this one. I said early last year that I intended to become more familiar with health policy. It has been sobering to see just how far we have moved from the Whitlam legacy. The fact is that we have seen cuts across every part of the health system, including: more than $60 billion cut from Australia's public hospitals; attempts to increase the costs of medicines for every Australian, including unfair changes to the Pharmaceutical Benefits Scheme safety net; $370 million cut from preventative health programs; the abolition of the Australian National Preventive Health Agency and Health Workforce Australia; the government's ongoing GP tax through its MBS freeze, which represents a cut of some $2 billion from Medicare; cuts of hundreds of millions of dollars from public dental programs; cuts to general practice training programs; and cuts to mental health and Indigenous health programs. These cuts truly are at every level of the system.

We have also seen rising health insurance premiums. A fortnight ago, the health minister admitted that premiums are rising at twice the rate of inflation. In fact, some 500,000 Australians have dumped or downgraded their private health insurance; the minister admitted that many people are disappointed with their private health insurance. The reason these cuts are happening is because this government is not serious about investing in Medicare. The government does not see Medicare as being the heart of Australia's health system; it sees a much greater role for private health insurers, with a long-term intention of privatising Australia's healthcare system. Unfortunately, the government plans to do this because it does not believe in Medicare. It sees health only through the prism of cost, not as something that every Australian has a right to. And if the government gets its way, make no mistake: Medicare will be rendered a mere safety net, not the universal health system that it is today. You do not need to look very far, Deputy Speaker, to see what happens in this sort of instance. In the United States, not only do many millions of people miss out on the care they need, but the costs spent on health care are significantly higher than in Australia; indeed, Australia spends below the OECD average on health care. But for this investment we get some of the best health outcomes in the world.

We need to also consider these cuts in the context of what this government plans on doing to private health insurance. In its latest foray into private health, we have seen the government attack community rating, suggesting that some people ought to pay more for their private health insurance. Community rating is important because it means that people pay into health funds when they are young and fit, but then they are able to draw down as they age or start a family, or if they suffer from a major health issue. Under the government's agenda, health insurance would only be available to the young and the healthy, and only wealthy people would be able to afford private insurance as they age or seek to start a family, or if they develop a long-term health condition. We also know that this is likely to be inflationary; again significantly adding to the cost of health care for every Australian. So Labor will be standing up for the thousands of patients who will be impacted on by this poorly developed policy. We will not be supporting this bill.

I want to turn now to an examination of the bill in some detail. The Health Insurance Amendment (Safety Net) Bill 2015 gives effect to the 2014-15 budget measure, Simplifying Medicare safety net arrangements. Under the proposed new arrangements, there is only one safety net, with a lower threshold for all patients. However, the amount of out-of-pocket expenses that count towards the accumulation to reach the safety net is lower, and the amount covered once patients reach the safety net will also be lower. It is through these changes that the government is cutting $270 million over five years. At present, all out-of-pocket costs for out-of-hospital Medicare services contribute to the safety net threshold. Under the new arrangements, this will be capped at 150 per cent of the MBS schedule fee. Whilst acknowledging that the new Medicare safety net has lower thresholds for all patients, the bill restricts out-of-pocket costs that can accumulate towards the threshold, and it restricts the benefits payable once patients reach the safety net. The limit on out-of-pocket costs that can count towards the threshold is equal to the difference between the Medicare benefit and 150 per cent of the MBS fee—which in this case is $55.60—or the difference between the Medicare benefit and the doctor's fee, whichever is the lesser amount. If a patient is charged $120 for a consultation and the Medicare benefit is $72.75, this leaves an out-of-pocket cost of $47.25. As this out-of-pocket amount is below the maximum amount allowed to be counted towards the threshold, $47.25 is counted towards the patient's threshold. If a patient is charged $150 for the consultation and the Medicare benefit is $72.75, they will have an out-of-pocket cost of $77.25. As this out-of-pocket cost is more than the maximum amount allowed to be counted towards the threshold, only $55.60 is counted towards the threshold. The new, so-called simplified safety net involves abolishing the existing original Medicare safety net and the extended Medicare safety net.

The Consumers Health Forum of Australia has expressed concern that safety nets and other compensatory mechanisms to protect against higher out-of-pocket costs are being eroded at a time when increased rates of chronic disease are expected to require significant health expenditure in the years to come. Australians already make a relatively high direct contribution to healthcare costs. Individual consumer co-payments comprise 17 per cent of total health care expenditure in Australia, and are the largest non-government source of funding for health goods and services. In recent years, the health costs that consumers have had to pay from their own pockets have climbed steadily. Australians now spend an average of more than $1,000 a year in out-of-pocket costs. This finding is consistent with the results of a national survey of consumers conducted by the Consumers Health Forum where over 50 per cent of respondents indicated that they had paid between $1,000 and $5,000 for health care in the last year.

The Consumers Health Forum survey of almost 600 respondents across the country provides a worrying picture of vulnerable Australians already struggling to cope with high out-of-pocket costs. The key findings include that many consumers are already experiencing difficulty affording healthcare costs. Many consumers are failing to access needed health care due to costs. Any increase in out-of-pocket costs will further add to the financial difficulties being experienced by many consumers and create additional barriers to accessing appropriate care.

The report shows that the impact of high out-of-pocket costs is most profound for people who are most in need and most vulnerable—those with chronic and long-term illnesses, especially those afflicted with multiple chronic conditions. While the report acknowledges that direct costs of most healthcare services are either fully or partially subsidised in Australia, consumers can still face substantial unbudgeted out-of-pocket costs and co-payments.

The report also highlights the inadequacy of current safety nets to target consumers adversely affected by out-of-pocket costs to ensure that they do not experience barriers to accessing care. One of the problems with the current system of safety nets is that they are based on annual expenditure, which advantages consumers whose healthcare expenses occur in a short time frame over those who have ongoing conditions requiring lower levels of care for longer periods.

Another problem identified by the report is that mechanisms to address inequity, such as healthcare cards, identify people on the basis of income level or carer status but do not accurately target those who have difficulty affording health care. For example, there are many consumers who do not qualify for healthcare cards or pensions who have experienced difficulty in meeting their healthcare costs. Against this background, Labor have serious concerns about the impact that these changes will have on thousands of patients.

We are concerned about radiation oncology patients, people with cancer who have been previously bulk-billed but who will see significant new out-of-pocket expenses. According to one example, a patient with malignant melanoma receiving the SRS or stereotactic radiation treatment would face new out-of-pocket costs of some $7,400 and a patient with prostate cancer having the treatment could face new out-of-pocket costs of some $8,000. Similarly, patients with breast cancer being treated by private providers might see a 200 per cent increase in their out-of-pocket costs for their radiation oncology.

The Australian Medical Association have said they are opposed to these changes. The President of the AMA, Professor Brian Owler, has said:

The new Medicare safety net arrangements, together with the ongoing freeze of Medicare patient rebates, mean that growing out-of-pocket costs will become a reality for all Australian families, including the most vulnerable patients in our community.

Of course, growing out-of-pocket costs represent the opposite of the Whitlam legacy and the antithesis of Medicare. It will hit older Australians in particular.

The Royal Australian College of General Practitioners has also warned about the impact of the changes, especially in the context of the government's GP tax and its ongoing freeze of Medicare indexation. The college's president, Professor Frank Jones, has said that:

… coupled with the indexation freeze, the legislation will actually increase the cost of care to vulnerable groups. Safety net thresholds will increase by CPI annually while rebates are frozen.

Furthermore, we have had concerns raised by the Royal Australian and New Zealand College of Psychiatrists, cancer groups and others about the thousands of patients who will be adversely affected by these changes. Psychiatrists, especially those providing psychotherapy services to very vulnerable patients, have warned of the serious impact on the patients they care for. Dr Shirley Prager, the President of the National Association of Practising Psychiatrists said:

I and my colleagues are very concerned about the impact the new Safety Net proposals will have on patients who need long-term ongoing mental health treatment as many of these patients will find their health care with a psychiatrist unaffordable.

I acknowledge that the changes mean that many patients will reach the safety net sooner but only in the context of a $270 million cut. The government is able to make these savings by restricting the out-of-pocket costs that can accumulate to reach the safety net and then putting further caps on what will be covered. By contrast, under existing arrangements, all out-of-pocket costs for out-of-hospital Medicare services count towards the threshold. The safety net exists to ensure that patients who have significant out-of-pocket costs in one year are protected, consistent with the principle of Medicare that every Australian should have access to the highest quality of care regardless of their capacity to pay. We do not claim that the current safety net arrangements are perfect, but the way changes have been presented in this bill means they will have a serious, adverse impact on thousands of patients. Therefore, we do not support this bill.

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