2016 Medical Federal Budget Cuts: What You Need to Know

Australian dollar over notes

It’s that time of year again: the treasurer announces the budget and people nation-wide pick it to pieces and complain relentlessly, coming up with better answers to our economic woes and declaring it the worst budget in history. What exactly does the federal budget of 2016 hold for Australians, particularly by way of health care and Medicare? What changes are planned, and how will government spending dictate the future of our healthcare system?

As usual, federal budget cuts hit some sectors hard, and this year is no different. Cover for items currently covered on the Medicare Benefits Schedule (MBS) will be slashed, saving the government over $51 million over the next four years.


Part of these savings will be a continued freeze on the Medicare rebate indexation, meaning as the cost of everything goes up, how much patients receive for Medicare for receiving services will remain the same. Experts are saying this could lead to GPs abandoning bulk billing and charging fees, and prescriptions incurring a $5 rise in co-payments.

Subsidies to pathology services will be cut, which will again lead to a charge for services once free under Medicare. The same for diagnostic imaging – CT scans, ultrasounds, MRIs and the like will likely now cost patients, as providers will struggle to absorb the decrease to incentives to bulk bill, or rebates for services.

What does this mean for patients? Less trips to the doctor, price increases for essential medications, and for those suffering from chronic illness, a primary health care system that may be priced out of reach. GPs may find it difficult to pass on these costs, especially those in lower socio-economic areas, and if they are forced to absorb the costs, could face financial collapse. In areas already suffering, this could spell disaster.

The federal budget 2016 may save the government millions, and it could have a poor impact on large portions of the population, but what good could it do? Some new items are being added to the MBS, and new equipment will help those in rural areas with the diagnosis of diabetic retinopathy as almost $34 million is pledged.

MRI screening for breast cancer will benefit from a $3 million increase to rebate funding. The TGA will receive a huge boost ($20.4 million) to aid with better regulation. And for those requiring skin testing for allergies, a more streamlined skin patch testing item system and the testing of more allergens in one sitting will see the process better all round.

The ultimate impacts are yet to be seen, though, so it’s too early to speculate. Especially since a number of budget items were never passed in 2015’s federal budget. We may see a similar trend this year.