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Guaranteeing Medicare and Access to Medicines


The Government is continuing its commitment to Medicare and access to medicines with measures such as:

  • $2.4 billion additional new and amended Pharmaceutical Benefits Scheme (PBS) listings
  • $525.3 million to reduce out of pocket costs by lowering the PBS Safety Net eligibility thresholds for concessional and non-concessional patients
  • Permanent Universal Telehealth
  • New and amended Medicare Benefits Schedule (MBS) listings
  • More rural medical Commonwealth Supported Places
  • Prioritising Aboriginal and Torres Strait Islander Health



Mercer’s Perspective


The increase and amendments to the PBS are a welcomed necessity to keep pace with medical advancements. Mercer welcomes the ongoing review and changes in Medicare, and access to services and medicines for all Australians, particularly the focus on the vulnerable, including Aboriginal and Torres Strait Islanders.



Implication for employers 

More readily available access to services and medications means employees facing health issues may have access to care at lower cost, to potentially enable faster recovery and return to the workforce, reducing the financial and human impact of employee absence.


Implication for individuals

More affordable access to life saving medicines with lower safety net thresholds, and access to more providers will provide individuals with potentially greater outcomes for their ongoing health management.  



Measures to improve sustainability and affordability of Private Health Insurance (PHI)


The Government’s new devices agreement with private hospitals is expected to drive lower Private Health Insurance premium increases.  Australia has seen the lowest change in PHI premiums over the past 21 years, with six consecutive quarters of growth in PHI uptake as a percentage of population.


Mercer’s Perspective


Mercer welcomes any initiative that can minimise the pressure on PHI premiums and maintain PHI take up, providing better access to care for Australians and reducing pressure on the public system.



Implication for employers 

Sustainable premiums will provide employers that fund PHI for their employees, with some peace of mind and surety around the ongoing funding of this very highly regarded employee benefit.


Implication for individuals

Cheaper and more sustainable health insurance premiums will help to reduce the financial burden on employees, and their families who are struggling to maintain private health cover in a low wage growth environment.  



Addressing Mental Health

The Government will build on the $2.3 billion initial phase of the Mental Health and Suicide Prevention Plan, announced in the 2021-2022 Budget. The 2022-2023 Budget is committing to a total value of almost $3 billion to deliver a five pillar approach to Mental Health and Suicide Prevention for Australians. This constitutes a further contribution of $648.6 million. The main areas of focus will include:   


  • Prevention and early intervention – support for digital mental health services, investment in school wellbeing programs, research activities and literacy programs.

  • Suicide prevention – expanding suicide prevention research, further support to regional and community-based suicide prevention initiatives, data development and reporting.

  • Treatment – increasing headspace services for young people, with a view to providing all Australians with access to high quality, person-centred care following natural disasters and tragic events, supporting victim-survivors of domestic, family and sexual violence, and supporting critical new treatment services for Australians with an eating disorder.

  • Support for the vulnerable - maintain momentum in reducing the devastating impact of mental ill-health and suicide on Aboriginal and Torres Strait Islander people, families and communities.

  • Workforce and governance - implementing the 10 year Mental Health Workforce Strategy to address Australia’s current and future treatment needs regarding better access to psychological support. 


Mercer’s Perspective


Following the impacts of COVID-19, Australians have seen the incidence of mental health-related conditions increase from 20% to 25% in any one year. Mercer welcomes the increase in the mental health budget and the focused approach towards prevention, early intervention and protecting our most vulnerable groups within Australia. However simple allocation of the mental health budget across all Australians provides an estimated $115 per person in preventative mental health treatment for this financial year. When weighed against the average cost of psychological treatment, $267 per hour[1], or $128.40 (if eligible for Medicare rebate), the adequacy of the mental health budget has to be questioned.


[1] Australian Psychological Society National Schedule of Recommended Fees 2021-2022



Implication for employers 

This increased commitment to mental health support provides additional resources to employees and employers to help prevent and address the impacts to the workplace, and also the home.  As highlighted above, the after-effects of COVID-19 on the mental health of Australians is likely to be felt for some time yet, however the financial investment in this space continues to be inadequate to address issues relating to treatment access. The challenge for employers will be to locate alternative and effective sources of support for employees in order to see them through this resource shortage.


Implication for individuals

All Australians benefit from improvements to mental health services.

This Budget aims to provide additional workforce support for mental health services, many of which have experienced substantial increases in demand throughout the COVID-19 pandemic, and will eventually help reduce wait times and pressure on emergency departments. However for many, particularly our most vulnerable members of society, access to support continues to remain out reach.



COVID-19 response measures

The Government continues to spend on COVID-19 response and recovery, particularly in health and aged care settings and for vulnerable Australians. Spending will include access to rapid antigen tests for concession card holders, health and aged care and schools, with continuing investment in the vaccine program and COVID-19 national incident centre. The Government is also investing in stockpiling personal protective equipment (PPE) for residential aged care facilities.  



Mercer’s Perspective


Mercer welcomes any initiative that can minimise the risk of COVID-19 to health and aged care facilities and vulnerable Australians.



Implication for employers 

Reduced impact of COVID-19 sickness in the workplace, particularly in aged care and health care settings. 


Implication for individuals

Cheaper and more accessible COVID-19 testing, more access to vaccines and continued Government focus on managing the risk of COVID-19 across vulnerable communities and aged care settings where the risk of COVID-19 related fatalities and complications is greatest. 

This content is intended to inform clients of Mercer’s views on particular issues. It is not intended to be provided to any person as a retail client and should not be relied upon or used as a substitute for professional advice specific to a client’s individual circumstances. Whilst Mercer believes the prospective information and forward looking statements made by Mercer in this report are based on reasonable grounds, they are predictive in character and may therefore be affected by inaccurate assumptions or by known or unknown risks and uncertainties. This content has been prepared by Mercer Consulting (Australia) Pty Ltd (MCAPL) ABN 55 153 168 140, Australian Financial Services Licence #411770. Any advice contained in this content is of a general nature only and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this content you need to take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering and seek advice from a licensed, or appropriately authorised financial adviser if you are unsure of what action to take. ‘MERCER’ is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.

Copyright 2022 Mercer LLC. All rights reserved.


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