Medicare rebates will not be keeping pace with inflation this year, but private health insurance premiums will.
The federal government may have approved a higher-than-usual increase to private health premiums this year in recognition of the rising costs of providing healthcare, but primary care has not been so lucky.
Last Thursday, MBS Online confirmed that general medical, pathology and diagnostic imaging services listed on the MBS would be indexed by 2.6% from 1 July.
In practical terms, the patient rebate for an item 23 Level B consult will go from $43.90 to about $45.04 – a difference of roughly $1.14.
The most recent Australian Bureau of Statistics release puts the Consumer Price Index at 4.2% across all services and 4% across just health services for the 12 months to March 2026.
RACGP president Dr Michael Wright said low levels of indexation damaged the fragile trust between doctors and the government.
“It demonstrates why many GPs remain sceptical about relying on government funding alone,” he told The Medical Republic.
“And that’s the thing – if the increases aren’t going to be enough to cover costs, that trust issue becomes a real problem.”
While the MBS will only be seeing a 2.6% indexation, the Department of Health, Disability and Ageing okayed a premium increase of 4.41% for private health insurance in February.
“This is moderately higher than last year’s increase of 3.73% and reflects the rising costs of providing medical and hospital services, which rose 5 per cent last financial year,” federal health minister Mark Butler said at the time.
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RACGP vice president Dr Ramya Raman told TMR that the Medicare funding model continues to lag behind the demands of rising wages, rent, utilities, insurance and accreditation.
“The core issue that that we have on hand here is a 2.6% MBS indexation doesn’t actually reflect the real world cost and the pressures facing general practice,” she said.
“I speak to this as a GP and a practice owner myself, and it does ultimately affect the outcomes for patients.
“The conversation shouldn’t actually just be about whether rebates are increased, but whether they are increased enough to sustain the high-quality comprehensive care that’s being delivered by general practices.”
As part of its pre-budget submission this year, the RACGP called for the establishment of an independent pricing authority for Medicare.
This would take the power for decisions like annual indexation away from the Department of Health, Disability and Ageing.
“Patients need to be aware of this as well – we’re on their side, we always will be, we always have been,” Dr Raman said.
“And we hence we are calling on an independent Medicare pricing authority, which would provide greater confidence that rebates reflect the actual cost of delivering care, rather than the short-term decisions [of governments].”
