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2013-2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HEALTH INSURANCE AMENDMENT (EXTENDED MEDICARE SAFETY
NET) BILL 2014
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health, the Hon Peter Dutton MP)
HEALTH INSURANCE AMENDMENT (EXTENDED MEDICARE SAFETY
NET) BILL 2014
OUTLINE
The Bill amends provisions of the Health Insurance Act 1973 (the Act) to increase the
general (upper) threshold the Extended Medicare Safety Net (the EMSN) to $2,000,
commencing 1 January 2015. It also introduces a minor administrative change in
seeking confirmation of family composition.
The EMSN provides individuals and families with an additional rebate for out-of-
hospital services funded through the Medicare Benefit Schedule (MBS) once an
annual threshold of out-of-pocket costs is reached. Sections 10ACA and 10ADA of
the Act provide that once an individual or a member of a registered family reaches the
applicable out-of-pocket EMSN threshold, the person is entitled to an increase in the
Medicare benefit equal to 80 per cent of their out-of-pocket costs. The increased
amount of Medicare benefit payable under the EMSN is commonly referred to as the
,,EMSN benefit.
There are two EMSN thresholds: the concessional (lower) threshold for
Commonwealth concession card holders; and the general (upper) threshold for all
other people eligible for MBS benefits. From 1 January 2006, the concessional
threshold increased to $500 and the general threshold increased to $1,000. The
thresholds are indexed to the Consumer Price Index at the start of every calendar year.
In 2014, the concessional threshold is $624.10 and the general threshold is $1,248.70.
As part of the 2013-14 Budget, it was announced that the general (upper) EMSN
threshold would be increased to $2,000 on 1 January 2015. Families that receive
Family Tax Benefits (Part A) (FTB(A)) and Commonwealth concession card holders
who are eligible for the low threshold of the EMSN will not be impacted by the Bill.
This measure saves $105.6 million over 4 years and is included in the Forward
Estimates. This supports the overall sustainability of MBS arrangements by reducing
expenditure.
The Bill also introduces a minor change to expand the means by which the
Department of Human Services can confirm family composition. Currently, section
10AE of the Act requires that if a registered family is identified to be approaching the
EMSN threshold and will soon be entitled to receive EMSN benefits, the Chief
Executive of Medicare must, in writing, request confirmation of their family
composition. This Bill introduces amendment to remove the requirement of "in
writing" and allow the Chief Executive of Medicare to determine how the Department
of Human Services can contact a family to confirm their family composition. This
will allow a more streamlined process and ensure faster payment of EMSN benefits to
patients. A similar change was introduced in 2012 to remove the requirement for the
public to confirm their family composition in writing. This was in response to
feedback from the public that having to complete a form confirming who is in their
current safety net family is inconvenient. This Bill still requires the Chief Executive
of Medicare to seek confirmation of family composition but removes the requirement
for this request to be only in writing.
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Financial Impact Statement
The amendment of increasing the EMSN upper threshold to $2000 will support the
achievement of savings announced in the 2013-14 Federal Budget. The savings from
the measure are $105.6 million over 4 years.
2013-14 ($ million) 2014-15 ($ million) 2015-16 ($ million) 2016-17 ($ million)
0.1 -7.8 -48.5 -49.4
The removal of restrictions on the Chief Executive of Medicare for seeking
confirmation of family composition has no financial impact.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
The Extended Medicare Safety Net (the EMSN) assists Australian families and
individuals with high out-of-pocket medical costs for out-of-hospital Medicare
services. It provides people with an increased Medicare benefit for out-of-hospital
services. Once an annual threshold is attained, the level of benefit for out-of-hospital
Medicare services is increased by 80 per cent of any out-of-pocket costs for the
remainder of the calendar year.
There are two EMSN thresholds: the concessional threshold for Commonwealth
concession card holders and Family Tax Benefits Part (A) (FTB(A)) eligible families;
and the general (upper) threshold for Medicare eligible Australians. In 2014 the
concessional threshold is $624.10 and the general threshold is $1,248.70.
Item 1 of Schedule 1 of the Bill amends the definition of the general EMSN under
subsection 8(1A) to reflect the decision announced as part of the 2013-14 Budget that
the general (upper) EMSN threshold will be increased to $2,000 on 1 January 2015.
This change only affects those on the upper threshold of the EMSN. Families that
receive FTB(A) and Commonwealth Concession card holders will not be impacted by
this Bill. This measure creates a saving of $105.6 million over 4 years which is
reflected in the Forward Estimates.
Item 2 of Schedule 1 of the Bill introduces the second amendment of the Bill which
involves a minor change to remove restriction on the means by which the Department
of Human Services (DHS) uses to confirm family composition. Currently, section
10AE of the Health Insurance Act 1973 (the Act) requires that if a registered family is
identified to be approaching the EMSN threshold and will soon be entitled to receive
EMSN benefits, the Chief Executive of Medicare must, in writing, request
confirmation of their family composition. This Bill introduces an amendment to
remove the requirement of "in writing" and allow the Chief Executive of Medicare to
determine how they would like to contact a family to confirm their family
composition. This will allow a more streamlined process and ensure faster payment
of EMSN benefits to patients.
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Human rights implications
The right to health
The right to health - the right to the enjoyment of the highest attainable standard of
physical and mental health - is contained in article 12 (1) of the International
Covenant on Economics, Social and Cultural Rights (ICESCR). The UN Committee
on Economics, Social and Cultural Rights (the Committee) has stated that health is a
,,fundamental human right indispensable for the exercise of other human rights, and
that the right to health is not to be understood as a right to be healthy, but rather
entails a right to a system of health protection which provides equality of opportunity
for people to enjoy the highest attainable level of health.
The right to social security
The right to social security is contained in article 9 of the ICESCR. The right requires
that a country must, within its maximum available resources, ensure access to a social
security scheme that provides a minimum essential level of benefits to all individuals
and families that will enable them to acquire at least essential health care. Countries
are obliged to demonstrate that every effort has been made to use all resources that are
at their disposal in an effort to satisfy, as a matter of priority, this minimum
obligation.
Discussion of the Bill
Item 1 of Schedule 1 of this Bill increases the general (upper) EMSN threshold to
$2,000, a decision from the 2013-14 Budget to improve Medicare sustainability. The
concessional threshold for Commonwealth concession card holders is not affected by
this Bill.
The Committee states that the notion of ,,the highest attainable standard of health
takes into account both the condition of the individual and the countrys available
resources. The right may be understood as a right of access to a variety of public
health and health care facilities, goods, services, programs and conditions necessary
for the realization of the highest attainable standard of health.
The Committee also states that with respect to the right to social security that the
qualifying conditions for benefits must be reasonable, proportionate and transparent.
In 2013, expenditure through the EMSN was approximately $394 million.
While this Bill may reduce the number of patients who will reach the general
threshold to receive EMSN benefits, in the longer term, this is a reasonable and
proportionate response to ensure that the EMSN continues to be financially
sustainable. This Bill does not affect the affordability of medical services to people
who qualify for a Commonwealth concession card, or low income families, and thus
protects the benefits of the individuals that are financially disadvantaged.
Commonwealth concession cards are provided to people who meet a range of criteria
including qualifying for a Commonwealth Seniors Health Card, Pensioner Concession
Card, Low-income Health Care Card or Newstart Allowance. In 2012-13, the number
of concession card holders was 5,583,405.
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The amendment to the Act made by Item 2 of Schedule 1 to the Bill does not engage
any of the relevant human rights. Currently, by legislation, individuals can confirm
their family composition with the Department of Human Services (DHS) by
telephone. This Bill introduces a minor administrative change to remove restriction on
the way that individuals are contacted by DHS, regarding family composition
confirmation, which allows individuals in some cases to receive their entitled EMSN
benefits sooner.
There is no incompatibility with the right to health or social security because the
legislation is for a legitimate objective and reasonable, necessary and proportionate in
the circumstances.
Conclusion
This Bill is compatible with human rights as the extent that it may limit the human
right to health is reasonable, necessary and proportionate.
The Hon Peter Dutton MP, the Minister for Health
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Health Insurance Amendment (Extended Medicare Safety Net) Bill 2014
NOTES ON CLAUSES
Clause 1 - Short Title
This clause provides that the Bill, once enacted, may be cited as the Health Insurance
Amendment (Extended Medicare Safety Net) Act 2014.
Clause 2 - Commencement
This clause provides that Schedule 1, Part 1 of this the Bill will commence 1 January
2015 and Schedule 1, Part 2 of the Bill will commence on the day this Bill receives
Royal Assent.
Clause 3 - Schedule(s)
This clause provides that each Act that is specified in a Schedule to this Bill is
amended or repealed as set out in the applicable items in the Schedule concerned, and
any other item has effect according to its terms. The Bill amends the Health
Insurance Act 1973.
SCHEDULE 1 -- AMENDMENT OF THE HEALTH INSURANCE ACT 1973
Part 1 - Extended general safety-net amount
Health Insurance Act 1973
Item 1 - Subsection 8(1A) (definition of extended general safety-net amount)
This item redefines the meaning of extended general safety-net (EMSN) amount from
$1,000 to $2,000. This is to implement a decision from the 2013-14 Budget.
Part 2 - Confirmation of family composition
Health Insurance Act 1973
Item 2 - Subsection 10AE(1)
This item removes the requirement that the Chief Executive of Medicares request be
in writing, when confirming family composition. This allows the Chief Executive of
Medicare to make requests by telephone, without limiting the Chief Executive of
Medicares ability to use other ways of making requests that may become available in
future. This is intended to streamline the process of confirming family composition
and allow faster payment of EMSN benefits to patients, when an individual or a
member of a registered family would be, or would be likely soon to become eligible
for EMSN benefits (benefits under subsection 10AC or 10ACA).
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