Medicare Indexation Falls To Half The Rate Of Health Inflation

Main Category: Medicare / Medicaid / SCHIP
Article Date: 01 Nov 2007 - 4:00 PDT

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AMA President, Dr Rosanna Capolingua, said that patients are being shortchanged with their Medicare rebates due to inadequate indexation of the Medicare Benefits Schedule (MBS).

The latest MBS, which comes into effect yesterday, shows that patient rebates have been lifted by only 2.2 per cent, while the Australian Bureau of Statistics (ABS) has health inflation running at 4.3 per cent.

Dr Capolingua said any Medicare reforms being proposed during this election must start with getting MBS indexation up to realistic levels.

"When rebate increases do not match inflation, then patients have increased out of pocket costs for their health care," Dr Capolingua said.

"The formula used to update Medicare patient rebates is simply not keeping up with rising costs, which means patient rebates are falling further behind every year.

"The Government increases in patient rebates at the last election are being diluted because the Medicare schedule is increasing by 2.2 per cent when the costs of providing the service have increased by around 3 to 3.5 per cent, according to AMA calculations.

"Today's rebates for CT scans, X-rays, MRIs and ultrasound have fallen well behind inflation, and are actually less than they were 10 years ago.

"The AMA has consistently called for the reform of the MBS. The rebate structure for GP visits needs to be simplified and the formula for increasing patient rebates needs to keep up with the costs of delivering the service.

"Labor has committed to reviewing the MBS structure, which we welcome, but we are yet to see the detail. No party has made any commitment to increase funding across rebates to make sure that patient rebates can keep up with the cost of medical services.

"Both major parties are committed to the Medicare Safety Net, which is an important measure to ensure that patients can access out of hospital services when they need them."

According to the latest ABS statistics, over the last 12 months:

- Health inflation is running at 4.3% per annum,
- Net hospital and medical services rose in price by 5.3%,
- The two main underlying consumer price measures used by the RBA rose by 2.9 % and 3.1%,
- Average weekly earnings rose by 4.6%, and
- The wage price index rose by 4.0 %.

http://www.ama.com.au