Medicare safety net benefits the wealthy

A report on the operation, effectiveness and implications of the Extended Medicare Safety Net (EMSN) has been released.

The review was undertaken by the Centre for Health Economics Research and Evaluation at the University of Technology, Sydney, which examined the EMSN as required under the Health Legislation Amendment (Medicare) Act 2004.

In 2009, the annual threshold for concession cardholders and people who receive Family Tax Benefits is $555.70.

For all other singles and families the annual threshold is $1,111.60. Once the relevant annual threshold has been met, Medicare will pay for 80% of any future out-of-pocket costs for out-of-hospital services for the remainder of the calendar year.

The review stated that :

• The EMSN was designed to provide financial relief for those who incur high out-of-pocket costs and thereby make health care services more affordable.
• There is evidence that affordability (or lack thereof) is a key factor in explaining the use of specialist services.
• The EMSN appears to have made services more affordable for some (people using assisted reproductive services, some patients with complex health conditions such as cancer), but has had little impact for those in more remote areas or in lower socioeconomic groups.
• Despite the lower threshold for low and middle income households, most  EMSN benefits have flowed to services that are more often used by wealthier sections of the community.

In the context of Medicare, the EMSN is a small program, but it has fundamentally changed insurance arrangements for out-of-hospital services. The Medicare program caps the amount of benefits per service. The EMSN, on the other hand, provides benefits that increase with provider fees, regardless of how high those fees may be.

This feature has resulted in significant increases in provider fees for some services and has meant that patients do not receive the full benefit of the EMSN.