Federal Politics

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Medicare cap 'increased out-of-pocket expenses'

THE federal budget could include measures aimed at plugging cost blowouts in the Medicare safety net - a move that risks further shifting the cost burden from the taxpayer back to the patient.

The Prime Minister, Julia Gillard, has described the safety net as ''badly designed because it was possible for some people to make a lot of money out of the Medicare safety net''.

However, a little-known report has shown the Labor government's first round of measures introduced in January 2010 to cap some fees covered by the safety net has left some patients with out-of-pocket bills of thousands of dollars, as high as they were before the safety net.

The safety net was introduced in 2004 by the then health minister, Tony Abbott, to protect people against high medical bills for treatment performed outside hospital.

However, it turned out to disproportionately favour people in affluent areas who tended to use private specialists more, while those on low incomes received a fraction of the safety net payments.

The measure also spurred a surge in specialist fees. The scheme reimburses patients with 80 per cent of their medical costs above annual thresholds of about $600 for pensioners and low-income patients and $1200 for others.


A Health Department assessment last year of an analysis by the Centre for Health Economics Research and Evaluation in Sydney says the capping arrangements have reduced the government's financial risk but this ''comes at the expense of higher out-of-pocket costs for some patients''.

It acknowledged out-of-pocket costs had increased ''markedly'' as a result of the caps imposed on obstetrics, fertility treatments, and cataract and varicose vein operations.

Meanwhile, the fate of the $1 billion-a-year Medicare dental scheme the government hopes to close remains unresolved despite a deal with the Greens to introduce a $500 million alternative program over four years.

The Greens leader, Christine Milne, made it clear yesterday her party would not support the repeal of Medicare dental in the Senate until they were satisfied with increased funding for an alternative in addition to the $500 million boost in tomorrow's budget.

The government said its proposal would provide treatment for 400,000 disadvantaged patients waiting for public dental care, many of whom would not qualify for the existing Medicare scheme.

The government's expansion, much of which does not come into force until after next financial year, also includes measures to relocate up to 300 dentists in rural areas and expanding places for dental graduates and oral therapists in public clinics.

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