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Patients, doctors forced to mind the gap as rebate freeze bites

Many private health funds are refusing to index their benefits while Federal Government persists with its Medicare rebate freeze, adding to the financial pressure on medical practitioners and their patients.

While health insurer HCF has launched a “known gap” scheme, in addition to its existing “no gap” schedule, to help offset the effects of the ongoing Medicare rebate freeze, other funds are holding steady, fuelling fears increasingly inadequate benefit payments will force doctors to either close down or raise patient out-of-pocket costs.

In a statement released to mark the third year since Medicare rebates for specialist consultations and operations were last indexed, and the passing of the first year of a projected four-year freeze on GP rebates, AMA President Professor Brian Owler warned that the Government’s policy threatened the viability of many practices.

Professor Owler said the Government was using the rebate freeze, which will save it $1.3 billion over four years, to transfer the increasing cost of providing care onto doctors and their patients.

“The rebate indexation freeze is a co-payment by stealth,” he said. “While the rebates have remained unchanged, the costs of providing quality medical services continue to rise. This funding shortfall has to be met by patients and practices.”

While the Medicare rebate has been held flat, underlying inflation is growing at an annual rate of 2.35 per cent, wages are increasing by 2.3 per cent and the cost of hospital and medical services are rising by 6.5 per cent a year.

“Practice costs such as wages for practice staff, rent, electricity, technology, and insurance are increasing every year,” the AMA President said. “Medical practices cannot absorb these increasing costs for four years in a row and remain viable.”

Professor Owler said the Medicare rebate freeze was also having a significant effect on private health insurance, including forcing up premiums.

Some health funds have decided to index their benefits despite the freeze on Medicare rebates, but others have held theirs down unless or until the Commonwealth increases its payouts.

Health fund HCF has responded to the stand-off by introducing a known gap scheme to complement its existing no gap arrangement with many practitioners.

Doctors signing up to the known gap deal will receive a smaller benefit from HCF than those participating in the no gap scheme, but will have the option of charging HCF-insured patients and out-of-pocket expense.

The known gap arrangement came into effect on 1 July and HCF has asked providers to nominate either it or the no gap scheme. They cannot be part of both.

Adrian Rollins