John Faulkner (NSW, Australian Labor Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I table draft determinations and explanatory memoranda relating to the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

by leave—I just want to flag to the chamber that during the debate on the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009 I will seek leave to make a statement on behalf of the opposition, given that the government has just tabled these regulations which were the subject of the second reading amendment which I moved when this bill was debated during the last sitting fortnight.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

The extended Medicare safety net was introduced in 2004 as part of the Howard government’s MedicarePlus package. It was introduced to protect Australians from high out-of-pocket expenses for medical services provided out of hospital, particularly for those with complex, high healthcare needs. Under the current system, once a patient has reached the annual threshold, Medicare will pay 80 per cent of future out-of-pocket costs for out-of-hospital care. These thresholds are by no means low. As of 1 January 2009, patients must incur $1,111 before they will qualify for the Medicare safety net, and concession card holders or recipients of family tax benefit part A will only qualify after incurring $555 in out-of-pocket costs.

The Medicare safety net has provided much relief to many Australians, including many of our senior citizens. It is accessed by almost one million Australians each year and has succeeded in keeping medical bills at somewhat more manageable levels for many people. Importantly, the Medicare safety net is also a policy measure which until recently had attracted bipartisan support, and it was publicly supported by the Prime Minister in the lead-up to the 2007 election. In September 2007, Mr Rudd stated: ‘A Rudd Labor government will retain the Medicare safety net, as Australian working families have come to rely on it for help with their family budgets.’ The health minister, Nicola Roxon, also confirmed this policy, stating:

We are setting out a comprehensive plan and the safety net is part of that plan that we are committed to and we will be running on for the election.

Isn’t it funny that now, not even two years after the election, the Rudd government is suddenly reneging on its core promise to keep the Medicare safety net roughly the same?

The changes contained in this bill, the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009, have the same effect as putting a cap on key items under the Medicare safety net. This will have serious implications for thousands of Australians. In particular, this is destined to affect the most basic dream of many Australians: having a family. The government proposed changes to IVF that would see the cost involved in having children through IVF increase enormously. Under the changes they originally proposed to the safety net, mums and dads were to be out of pocket by about $3,000. This is hardly consistent with the Rudd government’s commitment to helping working families. If the government are willing to resort to taxing mums, they have clearly lost touch with Australians.

Infertility is a medical problem and it is the only medical problem where assistance is not available from a public hospital. Over 11,000 babies are born to Australian families each year through assisted reproductive treatments. That means that, on average, one child in every classroom around the country is now conceived through IVF. Doesn’t that just demonstrate how vital IVF is for families? The government’s budget proposal would have jeopardised those Australians who rely on this treatment to have children. This treatment is their only hope. Having children is the greatest blessing of life. It should not be reserved for only the rich. Birth rates are still below replacement levels and families who have children are actually helping Australia. We have an ageing population and that means we have a decreasing number of full-time workers to support our ageing population.

The government, however, wanted to take a short-term approach, making it less affordable to have children, without a single thought for the consequences that this might have had for the future. It was willing to shatter the dream of a family for many Australians without giving a thought to the consequences it would have had for our nation. Thankfully, the government have realised they need a more commonsense approach. The government, under pressure, have done a bit of a backflip, but are we sure that the changes they have made are in fact fair and reasonable?

As a result of the amendment flagged by Family First as well as the amendment put forward jointly by Family First, the coalition and Senator Xenophon, the government has backed down from its original proposal. Just like it had to do with the proposed changes to Youth Allowance and its plan to ban home births, the government has been forced into yet another embarrassing backflip. The government is getting so good at doing backflips maybe it should consider joining the Australian gymnastics team for the next Olympics. Perhaps if the Rudd government took a more conciliatory approach upfront, instead of arrogantly trying to steamroll bad policy through the Senate, it would not need to keep changing its policies on the run.

To be given only a few hours to consider the changes to the legislation shows a basic disregard for the Senate. We have had only a few short hours to look at the changes, which shows a basic disregard for the Senate. We had a briefing this morning—and we are thankful for that—and we have asked the minister for a letter of assurance about the draft regulations for IVF, that they will remain the same for the rest of the government’s term. But we have had only a few short hours to actually see whether what they are saying about the impacts makes sense; are they fair and reasonable? It certainly shows a disregard for the Senate to put this before us at the last minute to see what they are proposing. Are there further unintended consequences in the changes to the regulations?

Family First believes a clever nation would make it easier for Australians to have kids, not harder.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

I seek leave to make a statement as part of the debate, given the government tabled the final draft of the regulations for this legislation in the Senate this morning.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I seek advice from the senator: is this for a short statement; is it for a long statement? Is it to withdraw an amendment? For what purpose is he seeking to make a statement?

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

The purpose is to explain the coalition’s position on the second reading amendment, given the government’s tabling of the final draft regulations that are the subject of the second reading amendment that is before the Senate.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Are you seeking to make a short statement of five minutes?

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Five minutes is fine, yes.

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

Leave is granted for five minutes.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Thank you, Madam Acting Deputy President. Firstly, the opposition welcomes the backflip by the government in relation to what was yet another ill-considered, ill-thought out budget measure in the health portfolio. What we had from the minister yesterday afternoon was a final draft of the regulations to this legislation which enshrine increases in a key Medicare rebate relating to IVF. It introduces new Medicare rebate items for IVF. It increases caps under the extended Medicare safety net arrangements for IVF. Yet the minister was also saying in her press release yesterday that the changes would not have any fiscal impact. She said:

The restructured items and caps achieve the same savings announced in the 2009-10 Budget ($451.6 million over 4 years).

Patients are better off and doctors are better off, but the government is telling us that there is no fiscal impact whatsoever.

The opposition is not prepared to take the government on trust on these revised measures. The minister entered into an agreement with stakeholders on Thursday last week and it took them until yesterday afternoon to table the final draft of the regulations in the House of Representatives, and they tabled them in the Senate this morning. After the regulations were tabled in the House of Representatives yesterday afternoon the opposition sought a briefing last night, essentially to seek some reassurance as to whether the figures actually add up. Is it possible that doctors and patients can be better off to the tune, we believe, of about $1,000 per IVF procedure yet there will be no impact on the budget bottom line?

This morning we received that briefing and we asked very specific questions. The department told us that they would be increasing the Medicare rebate for the first IVF cycle by $1,100, for the second and subsequent cycles by $900. We asked the very specific question: what is going to be the impact of that in terms of additional expenditure by the Commonwealth? The departmental officials said: ‘We haven’t got that information. We were asked to come here at the last minute. We were asked last night to provide you with a briefing this morning.’ The reason we were only able to ask the department to provide a briefing for us last night is that the minister waited until yesterday afternoon to table the final draft of the regulations. Very sensibly, Senator Fielding, Senator Xenophon and the coalition moved the second reading amendment when this legislation was being debated during the last sitting fortnight. In part it said:

... and further consideration of the bill be an order of the day for three sitting days after a draft of the final regulations and determinations relating to this bill are laid on the table.

That has happened in the Senate today and it happened in the House of Representatives yesterday. But we do not think that the figures add up. We welcome the government’s backflip. We welcome the fact that families seeking access to IVF treatment will be better off. But we want to get some more detail from the government and we think that it is quite reasonable for the Senate to be able to spend those three days properly scrutinising the impact of what the government announced as late as yesterday afternoon.

Industry stakeholders are quite happy with the deal that they were able to reach with the government on Thursday. They were not happy with what came out of the budget last year, so if they are now happy there must have been some improvement. How is it, if there is some improvement, that there is supposed to be no impact on the bottom line? Industry stakeholders tell us that there are about 20,000 couples who would access 2½ cycles each on average and all of them are going to be $1,000 per procedure better off. Quick maths on the back of an envelope indicate that if 20,000 women are able to access IVF and are $1,000 better off per procedure and will access on average 2½ procedures each, that is about $50 million in additional expenditure per annum.

The government tells us, ‘Well, we can offset some savings in another Medicare item number.’ We asked the questions: ‘How much are those savings? How many procedures do you expect to be accessed on the item number where there is a saving?’ ‘We have not got that information’ was the answer we were given. To cut a long story short, the minister initially introduced a budget measure that was going to hurt families requiring access to IVF. She was forced to go back to the drawing board by the actions of the Senate. She has left it until the last minute to put forward the final draft of the regulations which we demanded during the last sitting fortnight. We are now given a couple of minutes to deal with it. (Time expired)

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank senators for their contribution on the debate on the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009. This bill amends the Health Insurance Act 1973 to enable the Minister for Health and Ageing to determine by a legislative instrument the maximum benefit payable under the extended Medicare safety net for each Medicare benefits schedule item.

I note that this bill was considered by the Senate Community Affairs Legislation Committee, which recommended that the bill be passed. Firstly, I think it is important to highlight that all services that are currently covered by—and we will use the acronym—EMSN will remain covered. All patients will still be able to receive the standard Medicare rebate for all Medicare services, and of course all people will still be eligible for the EMSN benefits. There will be no age restriction on accessing IVF services nor will there be a restriction on the number of treatment cycles that a patient can receive. And contrary to some media reports leading up to the budget, no cancer services are affected by these changes.

Caps are being placed on some Medicare items to discourage doctors from charging excessive fees for these Medicare services. This directly responds to issues that were highlighted in the Extended Medicare safety net: review report 2009. The current nature of the safety net means that doctors feel a little pressure to moderate their fees. The report noted some significant findings. For example, the fees charged by obstetricians for out-of-hospital services increased by 267 per cent between 2003 and 2008. The fees charged for ART services have also increased significantly, with the report noting that fees charged out of hospital increased in the order of 62 per cent. These increases are over and above inflation and well in excess of the increases in the fees charged for other services. If this trend continues, many services will become unaffordable, even with the assistance of the extended Medicare safety net.

The report identified areas where there were large increases in the fees charged for a service where the majority of the EMSN benefit was going to doctors rather than helping patients or had a very high safety net benefit per service. The new caps will apply in these areas: obstetrics; assisted reproductive technology, including IVF; hair implantation; the injection of a therapeutic substance into an eye; one type of cataract operation; and, one type of varicose vein treatment. The committee also suggested that there should have been additional consultation on the development of the bill. I note that there have been detailed discussions with the medical profession over the last five years and the medical profession itself has acknowledged that the fees charged by doctors have increased unreasonably in some areas and that this was a result of the safety net. Of course, some doctors also recommended that caps or upper limits be placed on the amount of funding provided through the safety net for some services.

It is also worth noting that the Australian Greens suggested that the bill be amended to include a review to be tabled in parliament no later than 1 July 2011. We will continue to closely monitor the effects of the extended Medicare safety net, but do not believe a review after one full year of these changes will provide a reasonable analysis of the impact of the bill. The opposition, Senator Fielding and Senator Xenophon have moved an amendment to delay consideration of this bill until after the final draft regulations are tabled.

In relation to IVF, the model is clear. Currently, a typical IVF cycle costs around $6,000, yet there are doctors who charge in excess of $10,000 per cycle. The patients of specialists who charge $6,000 or less for a typical IVF cycle will not be worse off under these changes. Today, on the day of introduction in the house, the minister tabled the draft regulations. At that time the minister also indicated that we would be working with the profession and consumers to restructure the IVF items to better reflect modern practice.

I advise the Senate that the new item structure for ART services has now been finalised. The new structure better reflects modern clinical practice and will benefit patients as it redirects benefits to the more technical and expensive services through a reduction in its outlay for treatment cycles that are not completed. From 1 January 2010, ART patients receiving a typical cycle of ART treatment will receive a much higher standard rebate for the service. This will benefit all patients, not just those who qualify for the extended Medicare safety net benefits. Importantly, the new structure shows that patients charged at the average and median fees for a typical cycle will not be worse off as a result of this measure. In fact, many patients will receive higher Medicare rebates. This measure will still result in the same level of savings as announced in the 2009-10 budget.

The opposition treasury spokesperson clearly stated at the Press Club on 20 May:

We’ve said we’re not going to block any initiative other than private health insurance. That’s our position, we’re not changing from it.

So we expect the opposition will support the sensible measure that creates a mechanism for the government to responsibly manage expenditure on the extended Medicare safety net. With expenditure on the EMSN in 2008 being $414 million—a 30 per cent increase on 2007—these changes are necessary to assist in keeping the safety net sustainable and providing a continuing benefit for patients. I commend the bill to the Senate.

Question put:

That the amendment (Senator Cormann’s) be agreed to.