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National Health Amendment (Pharmaceutical Benefits—Budget Measures) Bill 2002

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2002

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS—BUDGET MEASURES) BILL 2002

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health and Ageing,

Senator the Hon Kay Patterson)

 

 

 

 



NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS—BUDGET MEASURES) BILL 2002

 

 

OUTLINE

 

This Bill proposes amendments to the National Health Act 1953 .

 

These amendments implement increases to Pharmaceutical Benefits Scheme patient co-payments and safety nets, as announced in the 2002-03 Budget, to reduce outlays under the Pharmaceutical Benefits Scheme.

 

The amendments will:

 

·         increase the general patient co-payment from $22.40 to $28.60, with effect from 1 August 2002;

·         increase the concessional patient co-payment from $3.60 to $4.60, with effect from 1 August 2002;

·         increase the general patient safety net threshold from $686.40 to $874.90, with effect from 1 January 2003 ; and

·         increase the concessional patient safety net threshold (an amount equal to 52 times the concessional patient co-payment) from $187.20 to $239.20, with effect from 1 January 2003.

 

These increases will take the place of indexation changes that would otherwise occur with effect from 1 January 2003.  Indexation of patient co-payments and safety net thresholds will resume with effect from 1 January 2004.

 

 

 

FINANCIAL IMPACT STATEMENT

 

The amendments are estimated to result in savings of approximately $1.1 billion over four years:

 

2002-03

$m

2003-04

$m

2004-05

$m

2005-06

$m

-298.6

-281.2

-272.1

-263.4

 



 

NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS-BUDGET MEASURES) BILL 2002

 

NOTES ON CLAUSES

 

Clause 1 - Short title

 

This clause specifies the short title of the Act as the National Health Amendment (Pharmaceutical Benefits—Budget Measures) Bill 2002.

 

Clause 2 - Commencement

 

Clause 2 provides that Schedule 1, Part 1 (items 1 to 24) commence on 1 August 2002, Schedule 1, Part 2 (items 25 to 28) commence on 1 January 2003 and that the remainder of the Act commences on Royal Assent.

 

Clause 3 - Schedule

 

This clause provides that the Acts specified in the Schedule are amended as set out in the Schedule.  The Bill comprises only one Schedule that amends the National Health Act 1953 .

 

 

 

SCHEDULE 1, PART 1

 

 

Items 1, 2 and 3

 

Subsection 84C(4) provides that the supply of a pharmaceutical benefit whose Commonwealth dispensed price exceeds the patient co-payment is not to be counted towards the safety net threshold unless the amount received by the pharmacist in respect of that supply is at least equal to the relevant patient co-payment.  Items 1 and 2 amend paragraphs 84C(4)(c) and (d) to reflect the new patient co-payments of $4.60 and $28.60 effected by items 6 and 7 respectively.  Item 3 generalises the note to subsection 84C(4) to obviate the need for any future amendment.

 

Items 4 and 5

 

Subsection 84C(1C) provides that where a person is a general patient during part of an entitlement period (calendar year) and a concessional beneficiary during another part of that entitlement period, any supplies of general benefit prescriptions made to the person can be counted towards the concessional safety net threshold at a transferred value.  Section 84CA sets that transferred value at a rate equal to the concessional patient co-payment.  Item 4 amends section 84CA to reflect the new concessional patient co-payment of $4.60 effected by item 6.  Item 5 generalises the note to section 84CA to obviate the need for any future amendment.

 

 

Item 6

 

Item 6 amends paragraphs 87(2)(a), (b) and (c) to provide that the patient co-payment for concessional benefit prescriptions and for concession card (general safety net) prescriptions will be increased from $3.20 (indexed under section 99G, and currently $3.60) to $4.60.

 

Item 7

 

Item 7 amends paragraph 87(2)(e) to provide that the patient co-payment for general benefit prescriptions will be increased from $20.00 (indexed under section 99G, and currently $22.40) to $28.60.

 

Item 8

 

Item 8 generalises the note to subsection 87(2) to obviate the need for any future amendment.

 

Items 9 and 10

 

Subsection 99(2A) provides that the supply on general benefit prescription of a pharmaceutical benefit for which the Commonwealth (dispensed) price at the time of supply does not exceed the general patient co-payment is deemed not to be the supply of a pharmaceutical benefit, except for the purpose of recording expenditure towards the safety net threshold.  Item 9 amends paragraphs 99(2A)(a), (aa) and (b) to reflect the new general patient co-payment of $28.60 effected by item 7.  Item 10 generalises the note to subsection 99(2A) to obviate the need for any future amendment.

 

Items 11 and 12

 

Subsection 99(2AB) provides that the supply on a concession card prescription of a pharmaceutical benefit for which the Commonwealth (dispensed) price at the time of supply does not exceed the concessional patient co-payment is deemed not to be the supply of a pharmaceutical benefit, except for the purpose of recording expenditure towards the safety net threshold.  Item 11 amends paragraphs 99(2AB)(a), (b) and (c) to reflect the new concessional patient co-payment of $4.60 effected by item 6.  Item 12 generalises the note to subsection 99(2AB) to obviate the need for any future amendment.

 

Items 13 and 14

 

Subsection 99(2B) provides that the supply on a concessional benefit prescription of a pharmaceutical benefit for which the Commonwealth (dispensed) price at the time of supply does not exceed the concessional patient co-payment is deemed not to be the supply of a pharmaceutical benefit, except for the purpose of recording expenditure towards the concessional safety net threshold.  Item 13 amends paragraphs 99(2B)(a), (b) and (c) to reflect the new concessional patient co-payment of $4.60 effected by item 6.  Item 14 generalises the note to subsection 99(2B) to obviate the need for any future amendment.

 

 

 

 

Item 15, 17 and 18

 

Items 15, 17 and 18 amend the definitions of concessional beneficiary charge, general patient charge and general patient reduced charge in section 99F to reflect the increased patient co-payments of $4.60, $28.60 and $4.60 respectively, effected by items 6 and 7.

 

Item 16

 

Section 99F provides that the concessional beneficiary safety net is an amount equal to 52 times the concessional beneficiary charge.  Item 16 is a savings provision that ensures that the concessional beneficiary safety net will remain at its current level ($187.20) for the remainder of the 2002 calendar year.

 

Items 19 to 24

 

Section 99G sets out the method and timing of indexing patient co-payments and safety net thresholds, which normally occurs with effect from 1 January each year. 

 

Items 19, 21 and 23 repeal provisions of section 99G that are now obsolete or redundant.  Item 22 amends the note to subsection 99G(2) to obviate further amendment in the event of a future change of name of the Department administering Part VII of the National Health Act 1953 .

 

Item 20 provides that the increased patient co-payments and safety net thresholds will be subject to indexation after 2003.

 

Subitem 24(1) is a savings provision that preserves the validity of indexation before 2003.  Subitem 24(2) provides that the amounts to be indexed with effect from 1 January 2004 will be the new patient co-payments and safety net thresholds and that the Consumer Price Index for the September 2002 quarter will be used as the basis for indexation.

 

 

 

SCHEDULE 1, PART 2

 

 

Items 25 and 26

 

Item 25 amends subsection 84C(1AA) by increasing from $600 (indexed under section 99G, and currently $686.40) to $874.90 the level of expenditure which makes a general patient eligible for a safety net concession card and thus obtain pharmaceutical benefits at the concessional rate for the remainder of the entitlement period (calendar year).  Item 26 generalises the note to subsection 84C(1AA) to obviate the need for any future amendment.

 

Item 27

 

Item 27 amends paragraphs 87(2)(b) and (c) by increasing from $600 (indexed under section 99G, and currently $686.40) to $874.90 the expenditure level at which a general patient becomes eligible to be charged only the concessional rate of patient co-payment for the supply of a pharmaceutical benefit.

 

Item 28

 

Item 28 amends the definition of general patient safety net in section 99F to reflect the increase to $874.90 effected by items 25 and 27.