Left vs Right: The Medicare Co-Payment

medicare co-payment



Left – Lauren McCracken

Have you ever been stuck a few days out from payday with just $3.62 left in your bank account? That’s the amount staring back at me as I check my balance this morning.

It’s not something I can’t manage. I have bread in the freezer, fruit and veg in the fridge and a bag of oats in the pantry. Everything else I might need can wait a few more days.

I was in a similar position a few weeks ago. That weekend I came down with a particularly nasty bout of illness and needed to haul my wretched, disgusting body to the doctors as quickly as possible.

I saw the doctor and got my prescription. I asked about work the next day, he said I needed to come back tomorrow if I needed a doctor’s certificate. I had enough money to buy the medicine the doctor prescribed, and that was about it.

I trudged back the next day for a doctor’s certificate, and was given a new prescription as well. I couldn’t afford that one, so I decided to stick it out without the meds.

Now what if this scenario played out with the added burden of a $7 co-payment? I could afford the first appointment, no worries! The prescription? Well that would have to wait till payday. The second appointment? Nope.

No medicine and no doctor’s certificate. What would that really cost me? For starters, an untreated illness that should have been nipped in the bud. And without that doctors certificate, I could expect a strained relationship with my manager at work. Oh, and no sick leave, which means a loss of income that would then cut into the money I needed for bills, food and transport.

This is why the thought of a co-payment leaves a lump in my throat. For low-income earners an unexpected illness is already a financial burden. An extra $7 on top of that makes a huge difference for someone stretching every dollar in their budget.

There’s also the ongoing cost of having an illness go undiagnosed or untreated because $7 was too much that week. Low-income earners will be more reluctant to see the doctor over less urgent but still important matters, like check-ups for heart disease, STIs, diabetes and cancers. When detection of these diseases is delayed, the effects of treatment weaken and the cost rises.

If $7 doesn’t seem like much to you, I’m really happy that you’re free of that worry. But let’s look at what that means. The point of the co-payment is to discourage people from going to the doctor when they aren’t that sick. If $7 isn’t that much, will it really work as a disincentive for you? Who will be discouraged from seeing the doctor?

$7 may not seem like much to some, but for those living pay-cheque to pay-cheque it can mean a world of difference. We are all entitled to out health and wellbeing, let’s not put a price on it.

Right – Nicholas Gerovasilis

‘…the ideal model involves a small co-payment – not enough to put a dent in your weekly budget, but enough to make you think twice before you call the doc.’

Those are the words of Labor’s shadow assistant treasurer Andrew Leigh from 2003. Considering the Opposition’s present stance on the issue, one would be forgiven for thinking that Dr. Leigh’s previously-held view was an anomalous one. Yet, the ironic reality is that it was Labor which first introduced a Medicare co-payment under Bob Hawke. As a policy, it is far from the ideological contrivance that many charge it to be. Rather, having been seduced by the allure of an obstructionist approach to opposition, Labor now stands in the way of a rational measure whose time has come.

During his Budget Reply Speech, Opposition Leader Bill Shorten ferociously attacked the proposed co-payment, warning the Parliament – ‘it is either for or against Medicare’. Yet, the problem with his gross simplification and confected outrage is that it stands in abject denial of reality. Medicare is the third biggest cost in the federal budget. Of even greater concern, it is growing unsustainably fast. If the government had opted for a business as usual model, spending on Medicare services was expected to rise by an extraordinary 24 per cent over the next four years. So, in contrast to Shorten’s ominous rhetoric, the far more accurate assessment was that offered by Hawke in 1991. ‘The government is committed to ensuring that Medicare remains entrenched in the Australian landscape and we will do that by addressing the problem of the unsustainable growth in servicing. 

A further theme which has been seized on by the opposition is that the plan is a fundamental attack on the universality of Medicare. Firstly, what are essentially political talking points ought to be sensibly contrasted with what Dr. Leigh propounded as support by economists for the efficacy of co-payments. But moreover, these claims have tended to ignore the direct safety net for concession holders and families with young children: a maximum of 10 charges or $70. This measure actively serves to preserve accessibility to the system for lower-income families. Adding to this, the experience of countries such as Germany, France and Belgium reinforce the idea that universality and a co-payment model are not necessarily mutually exclusive.

Certainly, no one ought to be cavalier about the cost of living pressures facing many families. Though, it is equally inappropriate to exaggerate the impact that paying a modest upfront cost will have, and thus ignore the long-term calculus; if we do not act now to make health spending sustainable, the burden to be borne by Australians may be significantly greater in the future.

Ultimately, the idea of a co-payment excels on two grounds. First, it addresses the structural problem of unsustainable health spending. Secondly, it protects access to first-class healthcare for those that need it, while also functioning as an effective mechanism to limit unnecessary over-demand.