Health Legislation Amendment (Medicare) Act 2004 No. 16, 2004 An Act to amend the law relating to medicare, and for related purposes Contents 1 Short title 2 Commencement 3 Schedule(s) 4 Review of the operation of Act Schedule 1—Extended safety‑net Health Insurance Act 1973 Health Legislation Amendment (Medicare) Act 2004 No. 16, 2004 An Act to amend the law relating to medicare, and for related purposes [Assented to 18 March 2004] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Health Legislation Amendment (Medicare) Act 2004. 2 Commencement This Act commences on the day on which it receives the Royal Assent. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. 4 Review of the operation of Act (1) The Minister must initiate, by the third anniversary of the day on which this Act commences, a review of the operation, effectiveness and implications of this Act. (2) In selecting a person to conduct the review required by this section, the Minister must seek and select a person from nominations received from independent academic institutions. (3) The Minister must cause to be tabled in both Houses of the Parliament a copy of the report of the review within 15 sitting days of receiving the report. Schedule 1—Extended safety‑net Health Insurance Act 1973 1 Subsection 8(1A) Insert: concessional person: a person is a concessional person in relation to a year at all times after the first time in that year that the person is a concessional beneficiary for the purposes of Part VII of the National Health Act 1953 (which deals with pharmaceutical benefits). 2 Subsection 8(1A) Insert: concessional safety‑net amount means $300. Note: The concessional safety‑net amount is indexed under section 10A. 3 Subsection 8(1A) Insert: extended general safety‑net amount means $700. Note: The extended general safety‑net amount is indexed under section 10A. 4 Subsection 8(1A) Insert: FTB(A) family: a registered family is an FTB(A) family in relation to a year (the safety‑net year) at all times: (a) after the first time in the safety‑net year that a member of the family receives a payment of an instalment of family tax benefit under section 23 of the A New Tax System (Family Assistance) (Administration) Act 1999 that has a Part A rate that is greater than nil; or (b) after a member of the family receives a payment of family tax benefit under section 24 of the A New Tax System (Family Assistance) (Administration) Act 1999 that has a Part A rate that is greater than nil and that is in respect of the last income year (within the meaning of that Act) ending before the start of the safety‑net year. Note: The Part A rate is calculated under Schedule 1 to the A New Tax System (Family Assistance) (Administration) Act 1999. 5 Subsection 8(1A) Insert: FTB(A) safety‑net amount means $300. Note: The FTB(A) safety‑net amount is indexed under section 10A. 6 Subsection 8(1A) (paragraph (b) of the definition of patient contribution) Omit "10AC or 10AD", substitute "10AC, 10ACA, 10AD or 10ADA". 7 Subsection 8(1A) (at the end of the definition of safety‑net amount) Add: Note: The safety‑net amount is indexed under section 10A. 8 Section 9 After "this Part", insert "(other than sections 10ACA and 10ADA)". 9 Paragraph 10AB(1)(d) After "10AC", insert "or 10ACA". 10 Paragraph 10AB(2)(d) After "10AC", insert "or 10ACA". 11 Subsection 10AB(2) Omit "section 10AD", substitute "sections 10AD and 10ADA". 12 Subsection 10AB(2) Omit "dealt with under section 10AC", substitute "dealt with under sections 10AC and 10ACA". 13 Paragraph 10AB(3)(b) After "10AC", insert "or 10ACA". 14 Paragraph 10AB(3)(e) Omit "section 10AC", substitute "sections 10AC and 10ACA". 15 After subsection 10AC(2) Insert: (2A) The patient contributions under subparagraph (2)(c)(ii) (including for the purpose of subparagraph (2)(c)(iii)) are to be reduced by so much of those patient contributions as have been paid as increased benefits under section 10ACA. For this purpose, an amount of a patient contribution is taken to have been paid as an increased benefit under section 10ACA to the extent that the amount of the increase in the benefit payable for the relevant service exceeds the difference between the total medical expenses incurred in respect of the relevant service and the Schedule fee for the relevant service. 16 Paragraph 10AC(6)(a) After "20(2)", insert "or (2A)". 17 After section 10AC Insert: 10ACA Extended safety‑net—families (1) In this section: relevant service means a service: (a) in respect of which benefit is payable; and (b) the medical expenses in respect of which exceed the amount of benefit that, apart from this section, would be payable in respect of the service; but does not include a service of the kind referred to in subparagraph (a)(ii) and paragraph (b) of the definition of applicable benefits arrangement in subsection 5A(1) of the National Health Act 1953. year means a calendar year. (2) Subject to this Act, if this section applies to a claim (the current claim), the benefit payable in respect of the claim is increased by 80% of the out‑of‑pocket expenses for the current claim. (3) The out‑of‑pocket expenses for a claim are: (a) the medical expenses incurred in respect of a relevant service for which the claim is made; reduced by: (b) any amounts payable under any other section of this Act in respect of those expenses. (4) This section applies to the current claim if: (a) the current claim is a claim that is made by a claimant for a benefit in respect of a relevant service which was rendered to the claimant or to a member of the claimant's registered family; and (b) the medical expenses incurred in respect of the relevant service are incurred in a year (the expense year); and (c) the claimant has paid at least 20% of the out‑of‑pocket expenses for the service directly to the person by whom, or on whose behalf, the service was rendered; and (d) the current claim is accepted by the Commission; and (e) one or more of the following apply to the claim: (i) the person to whom the service was rendered is a concessional person in relation to the expense year at the time that the claim is made and the concessional safety‑net applies to the current claim; (ii) the person to whom the service was rendered is a member of an FTB(A) family in relation to the expense year at the time that the claim is made and the FTB(A) safety‑net applies to the current claim; (iii) the extended general safety‑net applies to the current claim. Note: Subsection 10AC(3) deals with a person being a member of more than one family. (5) A safety‑net mentioned in paragraph (4)(e) applies to the current claim if the Commission is satisfied at the time when the current claim was accepted for payment that the sum of the out‑of‑pocket expenses for the current claim and all relevant prior claims for a safety‑net for the expense year is equal to or exceeds the applicable safety‑net amount. (6) A claim is a relevant prior claim for a safety‑net for the expense year if: (a) the claim has been made for benefit in respect of relevant services which were rendered to: (i) for the concessional safety‑net—any member of the family who is a concessional person in relation to the expense year at the time that the current claim is made; and (ii) for the FTB(A) safety‑net or the extended general safety‑net—any person who is a member of the family at the time that the current claim is made; and (b) the claim is related to medical expenses incurred during the expense year; and (c) the claim was accepted for payment by the Commission before the time when the current claim was accepted for payment; and (d) the Commission is satisfied at the time when the current claim was accepted for payment that the out‑of‑pocket expenses for the claim have been paid. (7) If: (a) this section applies to the current claim; but (b) the sum of the out‑of‑pocket expenses for all relevant prior claims for the expense year is less than the applicable safety‑net amount; the benefit payable in respect of the claim is not increased under subsection (2) but is instead increased by the amount worked out using the formula: where: balance of safety‑net means the amount by which the sum of the out‑of‑pocket expenses for all relevant prior claims for the expense year is less than the applicable safety‑net amount. (8) This section applies only to a benefit that becomes payable after a family becomes registered, even though expenses incurred before the registration in the year the family becomes registered may be taken into account for the purposes of determining whether a safety‑net applies. (9) For the purposes of this section (other than paragraph (4)(c)), without affecting the meaning of an expression in any other provision of this Act, if a person to whom benefit is payable in respect of a relevant service is given or sent a cheque under subsection 20(2) or (2A) for the amount of the benefit, the person is taken to have paid so much of the medical expenses in respect of that service as is represented by the amount of the benefit. (10) For the purposes of this section, without affecting the meaning of an expression in any other provision of this Act, despite anything else in this Act, the question when medical expenses are incurred in respect of relevant services relating to prescribed items is to be determined under the regulations. 18 After subsection 10AD(3) Insert: (3A) The patient contributions under subparagraph (3)(c)(ii) (including for the purpose of paragraph (3)(c)(iii)) are to be reduced by so much of those patient contributions as have been paid as increased benefits under section 10ADA. For this purpose, an amount of a patient contribution is taken to have been paid as an increased benefit under section 10ADA to the extent that the amount of the increase in the benefit payable for the relevant service exceeds the difference between the total medical expenses incurred in respect of the relevant service and the Schedule fee for the relevant service. 19 Paragraph 10AD(4)(a) After "20(2)", insert "or (2A)". 20 After section 10AD Insert: 10ADA Extended safety‑net—individuals (1) Expressions used in this section have the same meaning as in section 10ACA. (2) Subject to subsection 10AB(3), this section applies to a person who is not a member of a registered family. (3) Subject to this Act, if this section applies to a claim (the current claim), the benefit payable in respect of the claim is increased by 80% of the out‑of‑pocket expenses for the current claim. (4) The out‑of‑pocket expenses for a claim are: (a) the medical expenses incurred in respect of a relevant service for which the claim is made; reduced by: (b) any amounts payable under any other section of this Act in respect of those expenses. (5) This section applies to the current claim if: (a) the current claim is a claim that is made by the person for a benefit in respect of a relevant service which was rendered to the person; and (b) the medical expenses incurred in respect of the relevant service are incurred in a year (the expense year); and (c) the person has paid at least 20% of the out‑of‑pocket expenses for the service directly to the person by whom, or on whose behalf, the service was rendered; and (d) the current claim is accepted by the Commission; and (e) one or more of the following apply to the claim: (i) the person is a concessional person in relation to the expense year at the time that the claim is made and the concessional safety‑net applies to the current claim; (ii) the extended general safety‑net applies to the current claim. (6) A safety‑net mentioned in paragraph (5)(e) applies to the current claim if the Commission is satisfied at the time when the current claim was accepted for payment that the sum of the out‑of‑pocket expenses for the current claim and all relevant prior claims for the expense year is equal to or exceeds the applicable safety‑net amount. (7) A claim is a relevant prior claim for the expense year if: (a) the claim has been made for benefit in respect of relevant services which were rendered to the person; and (b) the claim is related to medical expenses incurred during the expense year; and (c) the claim was accepted for payment by the Commission before the time when the current claim was accepted for payment; and (d) the Commission is satisfied at the time when the current claim was accepted for payment that the out‑of‑pocket expenses for the claim have been paid. (8) If: (a) this section applies to the current claim; but (b) the sum of the out‑of‑pocket expenses for all relevant prior claims for the expense year is less than the applicable safety‑net amount; the benefit payable in respect of the claim is not increased under subsection (3) but is instead increased by the amount worked out using the formula: where: balance of safety‑net means the amount by which the sum of the out‑of‑pocket expenses for all relevant prior claims for the expense year is less than the applicable safety‑net amount. (9) For the purposes of this section (other than paragraph (5)(c)), without affecting the meaning of an expression in any other provision of this Act, if a person to whom benefit is payable in respect of a relevant service is given or sent a cheque under subsection 20(2) or (2A) for the amount of the benefit, the person is taken to have paid so much of the medical expenses in respect of that service as is represented by the amount of the benefit. (10) For the purposes of this section, without affecting the meaning of an expression in any other provision of this Act, despite anything else in this Act, the question when medical expenses are incurred in respect of relevant services relating to prescribed items is to be determined under the regulations. 21 Subsection 10AE(1) After "10AC", insert "or 10ACA". 22 Subsection 10AE(2) After "10AC", insert "or 10ACA". 23 Subsection 10A(1) (at the end of the definition of year) Add: ; or (d) for the purpose of the indexation of the concessional safety‑net amount, the FTB(A) safety‑net amount and the extended general safety‑net amount—the year beginning on 1 January 2005 or a later year beginning on 1 January. 24 Subsection 10A(2) (at the end of the table) Add: 4. The concessional safety‑net amount 1 January September 5. The FTB(A) safety‑net amount 1 January September 6. The extended general safety‑net amount 1 January September 25 Subsection 20(1A) Omit "subsection (2)", substitute "subsections (2) and (2A)". 26 After subsection 20(2) Insert: (2A) If: (a) section 10AC, 10ACA, 10AD or 10ADA applies to a claim for medicare benefit in respect of a professional service; and (b) the person to whom the medicare benefit is payable under subsection (1) in respect of the professional service has paid a part, but not the whole, of the medical expenses that he or she has incurred in respect of that professional service; then: (c) if the medicare benefit is less than, or equal to, the unpaid amount—he or she is not to be paid the medicare benefit but, if he or she so requests, there will, in lieu of that payment, be given to him or her personally, or sent to him or her by post at his or her last‑known address, a cheque for the amount of the medicare benefit drawn in favour of the person by whom, or on whose behalf, the professional service was rendered; or (d) if the medicare benefit exceeds the unpaid amount—he or she is not to be paid so much of the medicare benefit as is equal to the unpaid amount but, if he or she so requests, there will, in lieu of that payment, be given to him or her personally, or sent to him or her by post at his or her last‑known address, a cheque for that amount of the medicare benefit drawn in favour of the person by whom, or on whose behalf, the professional service was rendered. 27 Paragraph 20(3)(a) After "(2)", insert "or (2A)". 28 Paragraph 20(4)(a) After "(2)", insert "or (2A)". 29 Paragraph 20(4)(b) After "(2)", insert "or (2A)". 30 Application (1) Before the end of the period of 6 months beginning on the day on which this Act receives the Royal Assent, the Minister must publish a notice in the Gazette specifying the extended safety‑net commencement day. The day specified must not be later than the day after the end of the period of 6 months beginning on the day on which this Act receives the Royal Assent. (2) If the Minister does not publish a notice in accordance with subitem (1), the extended safety‑net commencement day is taken to be the day after the end of the period of 6 months beginning on the day on which this Act receives the Royal Assent. (3) The amendments made by this Schedule apply to expenses incurred after the extended safety‑net commencement day. However, expenses incurred before the extended safety‑net commencement day may be taken into account for the purposes of determining whether a safety‑net applies. [Minister's second reading speech made in— House of Representatives on 4 December 2003 Senate on 10 February 2004] (211/03)