Background to the review
2. 1 This chapter provides a background to the review, articulates the purpose of the review and outlines the structure of the report.
2. 2 On 31 October 2008, legislation commenced lifting the Surcharge income threshold for single people from $50,000 to $70,000 per year and from $100,000 to $140,000 per year for couples and families. As with the previous Surcharge threshold, the new threshold increases by $1,500 for the second and each subsequent dependent child. The new thresholds are indexed annually to full-time adult average weekly ordinary time earnings (AWOTE)1. These changes to the threshold are enacted through the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2) 2008 (the Act).
2. 3 Section 4 of the Act requires an independent review of its operation to be undertaken every year for a period of three years:
4. Review of operation of the Act
(1) The Minister for Health and Ageing must cause an independent review of the operation of this Act to be undertaken as soon as possible after each anniversary of the commencement of this Act, for a period of three consecutive years.
(2) The review is to consider and report on the impact on public hospitals of the amendments made by this Act, including the number of episodes of care, the impact on operating costs and the impact on elective surgery waiting lists.
(3) The person undertaking this review must give the Minister a written report of the review, and the Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of receiving the report.
2. 4 Review Report 1 was tabled in Parliament on 22 June 2010. For Review Report 1, only waiting list data and private health insurance participation data were available for a period post implementation of changes to the Surcharge. Review Report 1 identified an increase in admissions from the elective surgery waiting list and a reduction in the number of patients waiting longer than the clinically recommended time for elective surgery in the period subsequent to the Surcharge changes. This was counter to what would have been expected were the Surcharge changes to have resulted in a shift from privately to publicly treated patient activity.
2. 5 This report (Review Report 2) builds upon the background analysis compiled in Year 1 and utilises data released to December 2010.
2. 6 The final report, Review Report 3 will be submitted as the next year’s data becomes available.
1 Indexation is linked to the December AWOTE which comes out in the following February.