Federal Government dumps $7 GP co-payment, but doctors may recoup $5 Medicare rebate cut

Updated

The plan to charge patients an extra $7 GP fee has been scrapped by the Federal Government.

Prime Minister Tony Abbott has announced the contentious budget proposal will be dropped.

"There will be no change to bulk billing for children under 16, for pensioners, for veterans, for people in nursing homes and other aged care institutions," Mr Abbott said.

However, the Government is cutting the Medicare rebate paid to doctors by $5 a visit in a bid to address the "troublesome issue of six-minute medicine" and encourage doctors to spend more time with patients.

The cut means it will be left up to doctors to decide whether to make up the shortfall by charging what the Government has called an "optional co-payment".

Key points: Medicare rebate paid to doctors for some consultations will be reduced by $5 from July 1, 2015

Incentives paid to doctors to encourage bulk-billing of concession holders and children under 16 to remain

Doctors may choose to recoup the $5 rebate reduction from patients

Government will change standard GP consultation items, with same rebate for six-minute consultation as 19-minute consultation

Medicare fees will be frozen until 2018

Changes will contribute $3 billion to Medical Research Future Fund Source: Federal Government

"In the end, though, this is a question for the doctors, and what we're saying to the doctors is for adults who aren't on concession cards, we don't think it's unreasonable for you to charge a co-payment," Mr Abbott said.

"And what we want to do by legislation is enable them to directly claim the rebate, provided the co-payment they charge for that particular class of patients is $5 or less."

The Government also announced that to receive the standard rebate, consultations with doctors must be at least 10 minutes and that the level of rebate would be frozen over the forward estimates.

The $7 fee on visits to the doctor, pathology and diagnostic imaging services was announced in the budget and had been regarded as a "barnacle" stuck to the Government.

Mr Abbott told Coalition MPs late last month that he would be removing some "barnacles" from the Government before Christmas.

The patient contributions were touted at budget time as saving $3.5 billion over five years - savings that were to be invested into a Medicare Research Future Fund.

Mr Abbott said the new plan would result in the same amount of savings and the research fund will still be established.

Under the original proposal concession card holders and children under 16 would have been charged the co-payment for their first 10 visits each year.

Mr Abbott said the Government's Expenditure Review Committee had been "chewing over" this change for some weeks and it had been approved by Cabinet today.

'Better package' still needs to pass Parliament

The first version of the co-payment had failed to win over the required support in the Senate and had not yet reached parliament as legislation.

Mr Abbott said the new version will still require parliamentary approval but it is a "better package".

"Now we have better policy," he said.

"We had good policy in the first place ... we've got better policy now, and what we've seen here is, I think, an intelligent and sophisticated response from the Minister, from the ERC, from the Cabinet, from the Government more generally, to the quite reasonable observations of the backbench and the community and that's the glory of our system."

The Prime Minister's former adviser, public policy consultant Terry Barnes who initiated the co-payment idea, welcomed the change.

"GP co-pay plan B is much better than budget, balances fairness with sustainability. And it's close to my original proposal," he posted on Twitter.

However, Australian Medical Association (AMA) president Professor Brian Owler raised concerns about the Government's decision to freeze the amount of money given to doctors over the next four years.

"While we're pleased about the protection for vulnerable patients, on the other hand it does have those issues as well and we have concerns about the sustainability of general practice itself," he said.

GP tax is very much alive: Shorten

Opposition Leader Bill Shorten said the Government was "sneaking around the Parliament" to introduce a tax on GP visits.

"Tony Abbott today has tried to pretend that his GP tax is dead, but sadly for Australians his GP tax is still very much alive," Mr Shorten said.

"The Abbott Government is still doing exactly what it is doing with the petrol tax, they are sneaking around the Parliament to put a tax on going to the doctor.

"This is a GP tax which Tony Abbott can't bring through the front door, so he'll bring it through the back door.

"Sick people should not be discouraged from going to the doctor when they need to."

The Palmer United Party, which had opposed the first co-payment, also welcomed the new proposal.

"Prime Minister Tony Abbott has succumbed to our rationale and dropped the co-payment," PUP leader Clive Palmer said in a statement.

However, it was not clear whether Mr Palmer supported the $5 cut to the rebate.

Crossbench senator David Leyonhjelm described the Government's move as a stunt.

"This is creative thinking which heads us in the right direction, resolves the problem that the Government had of trying to convince the public that the co-payment was a good way to go," he said.

"What this does is put the onus back on the doctors."

Independent senator Nick Xenophon said the scrapping of the co-payment was a passive-aggressive backdown.

"The Government is basically making the GPs pay and in turn patients may have to end up paying in the longer term," he said.

Mr Abbott has not ruled out launching a government advertising campaign on the changes, despite having to defend a recent campaign explaining the higher education overhaul.

Topics: government-and-politics, parliament, federal-parliament, abbott-tony, australia

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