Healthy Skepticism Library item: 946

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Publication type: news

Stafford A, Davis M.
Threat to PBS and Medicare safety nets
The Financial Review 2005 Apr 12

Full text:

The federal government is believed to be considering a plan to cut back the safety net in the pharmaceutical benefits scheme, as well as restricting the Medicare safety net.

Cabinet ministers are expected to clash today over a push by Treasurer Peter Costello and Finance Minister Nick Minchin to rein in rapidly rising health spending in this year’s federal budget.

The costs of the $6 billion PBS, and the PBS safety net, are increasing annually and the government fears further blow-outs as demand grows for newer and more expensive drugs and the population ages.

Under the PBS safety net, commonwealth concession card holders and their families get free medicines for the remainder of a calendar year once they have spent $239.20 equivalent to 52 prescriptions in co-payments for subsidised medicines.

But sources said cabinet’s expenditure review committee was exploring adding an extra tier to the safety net, so concession card holders would pay a reduced co-payment for a certain number of scripts after reaching the threshold rather than nothing at all. They would get medicines for free only after passing the second threshold.

This comes on top of a review of the Medicare safety net, under which the government picks up 80 per cent of a patient’s medical costs once they’ve spent more than $306.90 in a year for concession card holders and $716.10 for general patients.

Health Minister Tony Abbott will reportedly fight against any changes to the Medicare safety net in today’s pre-budget cabinet meeting. But he’s expected to face stiff opposition from Mr Costello and Senator Minchin, who are worried about a blowout in the projected cost from $440 million to $1 billion over four years.

Figures from the Health Insurance Commission and Department of Health suggest the PBS safety net is likely to be costing the government more than it had hoped.

Almost 50 per cent more people more than 1 million claimed the PBS safety net in 2003 than in 1998.

And annual December peaks in the total number of prescriptions dispensed suggest patients are getting as many prescriptions dispensed as possible once they pass the threshold.

Australian Medical Association vice-president Mukesh Haikerwal said “further restrictions on the PBS scheme would be very difficult to tolerate”.

The cost of co-payments had recently been raised and “cardholders are doing it tough . . . already we’re seeing people not taking their medicines when they can’t afford them.”

Mr Abbott is likely to argue that watering down the generosity of the Medicare safety net payments would effectively break a core election promise.

Senior ministers are also expected to move to finalise the government’s welfare reforms this week.

KEY POINTS

• One million more people claimed the PBS safety net in 2003 than five years earlier.

• Health Minister Tony Abbott will reportedly fight any changes.