Understanding Recent Changes to Australian Policy and their Impact on the Cost of Care

1. Changes to the National Disability Insurance Scheme

• Price Guide Updates: The NDIS releases updated price guides annually, which reflect changes to service costs, wage rates, price caps, and allowable expenses. The most recent updates, for example, adjusted price limits for core supports and capacity-building supports (e.g., therapy, support coordination, and plan management). These changes influence how much participants can expect to pay or be reimbursed for certain services. It's essential to check the latest guide to see which categories or regions have experienced the most significant updates.
• Independent Assessments Reconsideration: The government has officially moved away from mandatory independent assessments for NDIS participants, which was initially proposed as a cost-saving measure. This change has been welcomed by many stakeholders, as it allows for more tailored support plans based on individual needs. While there are concerns about potential increases in administrative costs due to more individualized assessments, it’s important to note that these may be offset by reductions in disputes and delays that resulted from the previous model.
• Increased Funding for Remote and Regional Areas: To address inequities in access, the government has increased funding for NDIS participants in remote and regional areas. While this is a crucial step toward equitable service distribution, it may affect the overall costs of the scheme. However, the expanded support helps ensure essential services reach underserved communities, which has long been a challenge.
• Recent Changes to the NDIS Act: The NDIS Act was recently amended through the passage of the Getting the NDIS Back on Track No. 1 Bill 2024, which introduces several critical reforms. The legislation clarifies access pathways, introduces a new holistic needs assessment model that looks at participants' overall needs, and improves how budgets are structured. These changes are expected to create more tailored plans and give participants clearer insights into how their NDIS funds are managed. Additionally, the reforms strengthen safeguards through enhanced oversight by the NDIS Quality and Safeguards Commission. This overhaul aims to return the NDIS to its original intent of providing life-changing support while ensuring long-term sustainability​.

Stakeholder Reactions: Advocacy groups, such as Every Australian Counts, have welcomed the government's decision to move away from mandatory independent assessments, calling it a victory for participants' rights and personalized care. Some service providers, however, express concerns about the administrative burden these changes might impose, which could affect the availability and affordability of certain services in the short term.

2. Updates to the Medicare Benefits Schedule (MBS)

• Changes in Telehealth Services: The COVID-19 pandemic prompted a temporary expansion of telehealth services, which has now become a permanent feature of the MBS. This allows for more accessible care, particularly for rural and remote Australians who rely on telehealth for specialist consultations. The impact on out-of-pocket costs varies depending on the provider's billing practices, especially the extent to which bulk-billing is applied. Telehealth continues to be a vital resource for those in areas with limited access to in-person care.
• Revised MBS Items: Recent updates have revised or removed certain MBS items to reflect advances in clinical practice. For example, surgical and pathology services have seen adjustments that may impact patients’ out-of-pocket expenses, depending on their specific health needs and the types of services they access. These changes aim to ensure that MBS items are clinically relevant and cost-effective.
• Increased Focus on Preventive Care: The government has placed greater emphasis on preventive care through initiatives such as health checks and chronic disease management plans. While this is expected to reduce long-term healthcare costs by promoting early intervention, there may be short-term increases in engagement with healthcare providers, leading to potential out-of-pocket costs for patients depending on the services accessed.

Stakeholder Reactions: Medical associations, such as the Australian Medical Association (AMA), support the ongoing modernization of the MBS, highlighting the need for adequate funding to ensure equitable access to care. They also emphasize the importance of targeted support for rural and remote healthcare providers, particularly in maintaining the affordability and viability of telehealth services.

3. Impacts on Private Health Insurance and Out-of-Pocket Costs

• Premium Increases: Health insurance premiums continue to rise, as insurers cite factors such as the aging population, advances in medical technology, and the rising costs of healthcare delivery. These increases can affect the affordability of private health cover, especially for older Australians and those with more complex healthcare needs. However, premium hikes are regulated, and insurers must seek approval from the Australian government before implementing any increases.
• Policy Reforms for Better Transparency: Reforms aimed at simplifying private health insurance policies—categorizing them into Gold, Silver, Bronze, and Basic tiers—have improved transparency about coverage. These changes are designed to reduce unexpected out-of-pocket costs, but the real impact varies based on individual health needs and insurers' adherence to these reforms.
• Expanded Coverage for Mental Health Services: Some insurers have expanded coverage for mental health services, offering access without waiting periods. This is a positive change for those needing immediate support, although it could lead to higher premiums in the long run. While expanded mental health coverage is beneficial, consumers may experience variability in out-of-pocket costs depending on their insurer and policy type.

Stakeholder Reactions: Consumer advocacy groups, such as Choice, have praised the increased transparency in private health insurance, which helps consumers make more informed decisions about their coverage. However, they remain concerned about the steady rise in premiums and its impact on affordability, calling for further reforms to address this issue.

4. Recent Changes to the Aged Care System

• Increased Co-Payments for Part Pensioners and Self-Funded Retirees: Under the new system, part pensioners and self-funded retirees will face increased contributions to their care. While the government will fully cover clinical care, recipients will be responsible for non-clinical services such as assistance with daily living and personal care tasks like shopping and meal preparation. For every dollar part pensioners contribute, the government will add $6.10, but self-funded retirees will see lower support, with the government contributing only $1.60 for those with a Commonwealth Seniors Health Card, and $1.20 for those without.
• Lifetime Contribution Cap: A new lifetime cap on contributions will be introduced, ensuring that no individual contributes more than $130,000 toward their non-clinical care costs over their lifetime. This is an increase from the previous cap of around $78,000, which means many recipients may see higher overall costs, but it protects them from indefinite increases.
• Changes for Residential Aged Care: For new residential care entrants, the government has raised the maximum room price and introduced a policy where providers can retain 2% of refundable accommodation deposits annually for up to five years. However, full pensioners with limited assets will be exempt from these higher contributions, and about 70% of full pensioners and 10% of part pensioners will not experience any increase in contributions.
• Shift Towards Home Care: The reforms also reflect a growing focus on home care, with a $4.3 billion investment in the "Support at Home" program starting in July 2025. This aims to help more older Australians stay in their homes for as long as possible while receiving the care they need.

Stakeholder Reactions: While these changes are expected to improve the sustainability of the aged care system, they have raised concerns among some groups. The government has introduced a “no worse off” principle to protect current aged care recipients from the higher contributions, but future entrants to the system, particularly part pensioners and self-funded retirees, will face increased costs. The reforms have been supported by both major political parties, emphasizing the need for long-term solutions to manage the rising costs of aged care.