Pension changes & Medicare co-payments – what do the consumers think?

Thursday this week is when the Commission of Audit is released and when the public will get a firmer idea of the fiscal recommendations that will inform the May Budget. Mr Hockey and Mr Abbott have being dropping hints like Hansel and Gretel dropping bread crumbs. Two of the biggest changes that have been suggested include changes to the pension, both to how it is calculated and the age at when retirement would commence, and the introduction of a $6 co-payment for what would otherwise be Medicare bulk-billed appointments with general practitioners.

My patients are starting to ask questions about what it all means – both for themselves but also for the country.

The message I’m coming away with is that the public isn’t so much confused as under-informed, and in particular under-informed about how everything works. When they are informed, perhaps contrary to popular expectation, they are not necessarily un-sympathetic to the government position.

Let’s take for example healthcare costs. The wife in one couple I saw this week has been receiving treatment for bowel cancer. Her story now stretches over 12 years. During this time it is likely that between surgery and chemotherapy and doctors appointments over 100K per annum has been spent by taxpayers. The individuals themselves, as pensioners but with health insurers, may have struggled to keep up with not-insignificant out-of-pocket costs but these are only a small fraction of what Government pays. This couple is exceptional in that the amount of benefit the wife received from therapy is on the right side of the median and as an individual the money was a reasonable investment. But many others haven’t benefitted as much and similar sums have been spent.

When explained like this people seem to understand the ‘sustainability’ problem. The Government needs to tell more individual stories and not just the macro-economic picture.

The budget cuts will no doubt be unpopular but unless they are done the public is very quickly going to find new things to complain about. For example, we are heading into a period of time when very expensive life-prolonging drugs will not be funded because as a country they are unaffordable. We need to make changes now to move the affordability question in our favour.

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