The $2.8 billion Medicare savings package announced in the Federal Budget will be rolled into the health system, but not before the Abbott government wants to roll out the new system by 2020.
The $8 billion in savings is in addition to the $1.8 trillion in spending from the previous Labor government.
The Health portfolio is already expected to be the most significant new government budget in Australia’s history, and the savings package could have a major impact on the health sector.
As the Government ramps up its plans to roll-out the new Medicare, its plan to cut $2 billion from the health budget will be announced.
The health budget is the biggest single source of federal funding for public services, but the Coalition has made it clear it wants to cut that spending as well.
Under the new plan, the Health portfolio will be cut from $3.4 billion in the 2016-17 budget to $2,972 million in 2019-20.
The Coalition will be cutting the Health budget from $2bn in the 2018-19 budget to a mere $974 million in 2020-21.
This is because the Health Minister, David Heydon, will be reducing the Medicare levy to $1,250 a month from $1 of the current levy of $1 in 2018-07.
This means the Government will be able to afford the cost of a GP visit and hospitalisation without needing to increase the Medicare budget, the ABC understands.
“This change will allow the Government to meet its targets of reducing the budget deficit and reducing the cost to patients, without the need for additional funding from the Medicare Levy,” Mr Heydons office said.
On the $2-billion Medicare savings program, the Coalition says the $973 million will be invested in a “new national health system that works for everyone”.
“It will mean Medicare will have more money to spend on frontline services, including caring for the sick, reducing the spread of infectious diseases and delivering services like dental and mental health and substance abuse,” the office said in a statement.
But health experts have expressed concern about the changes.
In a blog post this week, the Centre for Medicare and Medicaid Services (CMS) called the change “a significant blow to Medicare’s ability to provide a quality, affordable and sustainable national health service”.
The Medicare Levy is an annual levy levied on every Australian.
The Coalition says this is needed to pay for the cost-of-living adjustment for workers, which will affect everyone.
Mr Heydona says he is “committed to improving Medicare for everyone” and will “do everything I can to make sure Medicare remains a truly affordable and quality national health insurance scheme”.