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Federal Budget 2014 – Proposed Changes to Medicare

Article By Adam Hurwood | | Accounting & Tax

Introducing Patient Contributions for General Practitioners/Pathology/Diagnostic Imaging Services and Reducing Rebates

Effective date: 1 July 2015

The Government proposes to reduce Medicare Benefits Schedule (MBS) rebates by $5 for standard general practitioner consultations and out-of-hospital pathology and diagnostic imaging services and allowing the providers of these services to collect a patient contribution payment of $7 per service. For concession card holders and children under 16 the MBS rebate will only be reduced for the first 10 services per year.

A new Low Gap Incentive will replace bulk billing incentives for providers of these services. The Low Gap Incentive will be paid to providers where they provide services to patients with concession cards or children under 16 years of age and only charge the $5 or $7 patient contribution – for the first 10 services in a year, or where they charge no patient contribution – for additional services in that year.

The measure will also remove the restriction on State and Territory Governments from charging patients presenting to hospital emergency departments for general practitioner like attendances.

Increase in the Medicare Levy Low Income Thresholds for Families

Effective date: 1 July 2013

The Government has announced an increase in the new Medicare levy thresholds that are applicable for the current financial year (ending 30 June 2014), but for families only. The new threshold is $34,367 (previously $33,693). The threshold increases by $3,156 for each dependent child or student (the previous increase was $3,094).

Thresholds for individuals and pensioners will remain at their 2012/13 levels, being $20,542 and $32,279 respectively.

Pausing Indexation of Medicare Levy Surcharge and Private Health Insurance Rebate Thresholds

Effective date: 1 July 2015 for a period of two years

The Government has announced that it intends to freeze the indexation of the thresholds used to determine your ability to claim a Private Health Insurance Rebate or be liable for the Medicare Levy Surcharge. The same threshold (based on an adjusted taxable income calculation) is used for determining both. This freeze will last for two years, with indexation due to recommence from 1 July 2017.

Increasing Co-payments and Safety Net Thresholds Under the Pharmaceutical Benefits Scheme (PBS)

Effective date: 1 January 2015

The Government proposes to increase PBS co–payments for general patients by $5.00 (from $37.70 to $42.70) and for concessional patients by $0.80 (from $6.10 to $6.90) in 2015.

PBS safety net thresholds will increase each year for four years from 1 January 2015, with general safety net thresholds to increase by 10 per cent each year and concessional safety nets to increase by the cost of two prescriptions each year.

These are ‘user pays’ measures, which will force people to start saving or budgeting for future medical contingencies.

Medicare Levy to Rise to Fund National Disability Insurance Scheme

Effective date: 1 July 2014

As announced in the 2013 Budget, the Medicare Levy will increase by 0.5% to 2.0% of taxable income. This measure will commence on 1 July 2014.