Medicare indexation day — $1.15 added to standard GP consult rebate

$1.15 — that is the cost of two eggs or one of those low-quality, four-colour ballpoint pens.

It is also how much the Medicare rebate for a level B consultation rose last week, going from $43.90 to $45.05 as part of annual indexation.

The boost remains lower than the annual growth in the CPI and average weekly wages, which are currently hovering around 4%.

There is a small, very small qualifier. This is still a little better than is used to be, if you want to give the current Federal Government credit.

After the Medicare freeze ended in 2017, Medicare indexation averaged about 1.3% annually, to the anger of the AMA and the GP groups.

Then came big news.

The government updated the Medicare indexation formula for the first time since Paul Keating was Prime Minister, using the newer Wage Price Index to better reflect economic conditions and no longer averaging out the wage component of the indexation formula over five years.

Since then, indexation has been higher, with a bonus round of indexation in November 2023 and July indexation rates of 3.6%, 3.5% and 2.4%.

But, as stated above, this year’s indexation rate for most general medical services, 2.6%, is still below CPI. As such the unhappiness remains.

“This is entirely consistent with the inadequacies of indexation of Medicare rebates for the last 40 years,” said Dr John Deery, chair of the Australian GP Alliance.

“Medicare indexation should be taken out of the hands of politicians. There should be an independent pricing authority set up.”

He said wages and rent were the first and second biggest cost drivers, which tracked CPI much closer than the Medicare indexation formula. This, he stressed, is also true of other costs, such as electricity.

The government has long admitted its indexation measures have an inbuilt “productivity offset” — deliberately coming in below inflation or CPI “as an incentive for programs to improve their efficiency over time”.

See our full MBS Quick Guide, with all the updated rebates, here.