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(Cth) Change the Medicare Safety Net Year to a Rolling 12-month Period
- Sarah Frost, Wei-Hsuan Kai, Min Li Chin, Emmaby Barton Grace & Emilie Everingham
- 6 days ago
- 7 min read
Author: Sarah Frost, Wei-Hsuan Kai, Min Li Chin, Emmaby Barton Grace & Emilie Everingham | Publish date: 29/1/2026
P: The Medicare Safety Net (MSN) year is defined as a calendar year.
S: The Minister for Health should amend Sections 10AC and 10ACA of the Health Insurance Act 1973 (Cth) to modify the current definition of an MSN year from a calendar year to a rolling 12-month period, calculated from when an individual or family first accesses an eligible service.
Problem Identification:
Sections 10AC and 10ACA of the Health Insurance Act 1973 (Cth) stipulate that all Medicare Safety Net payable services must be accrued within a calendar year, beginning on 1 January.
According to Services Australia, this means that the amount of time a person has to reach these thresholds depends on when they first require care. According to the Royal Australian College of General Practitioners (RACGP), this means that some patients are ‘excluded from the Safety Net unfairly because their costs are split between calendar years’. They have further argued that the current system is ‘inequitable across different groups.’
Context:
The MSN refers to a support scheme for ‘people who have high out-of-pocket medical costs for services provided out-of-hospital.’ Most Australians do not encounter the high out-of-pocket costs and associated financial burden that the MSN is designed to alleviate. However, according to the AMA, for the ‘small proportion of Australians [that] experience high out-of-pocket costs’, such as those with chronic health conditions, the MSN is designed to relieve the financial burden of these medical expenses.
The Department of Health, Disability and Ageing states that, to count toward the MSN, a service must be provided out-of-hospital and listed in the Medicare Benefits Schedule, which outlines all services subsidised by the Australian Government.
The MSN applies once a patient’s out-of-pocket costs for eligible services reach the threshold. The MSN threshold refers to the total amount an individual or family must spend on gap payments before the higher rebate applies. This threshold changes each year based on indexation; however, for 2026, it is $2,699.10. Once this threshold is reached, Medicare increases the rebate available to the individual for the remainder of the MSN year, therefore reducing out-of-pocket costs.
Arguments:
The Australian Medical Association (AMA) stated that the current system, which they described as an ‘artificial threshold', means that patients could incur greater medical costs if they begin treatment later in the year, as compared with those who first require treatment earlier on. For example, researchers Naghsh-Nejad & van Gool from the University of Sydney found that patients diagnosed with cancer later in the year face substantially higher expenses than those diagnosed earlier. As the study demonstrated, patients diagnosed later in the year have less time to meet the threshold before it resets, and therefore either do not meet the threshold or receive higher rebates for a shorter period of time. The AMA therefore argued that this approach does not align with some patients’ realities since ‘people’s health needs are not dictated by the calendar.’
The RACGP further argued that the effectiveness of the current calendar year MSN system is ‘inequitable across different groups.’ They stated that ‘wealthier patients’ who see high-cost non-GP specialists might receive substantial benefits, as they might be able to afford services that allow them to quickly meet the threshold. In comparison, research showed that for lower-income patients who do not qualify for concessional benefits, ‘the high [MSN] threshold … may mean that some health care services are out of reach if they have to reach these thresholds … twice, over an episode of care.’ (i.e. over 2 calendar years instead of one rolling year). The RACGP therefore argued that the calendar year MSN system has not ‘been universally effective in [its] aim to reduce financial barriers for individuals who require frequent medical care or supporting better access to essential health services such as GPs.’
Advice/Solution Identification:
The RACGP, the Consumer Health Forum of Australia and Naghsh-Nejad & van Gool (2024) called for changing the MSN to a rolling 12-month period. The Cancer Council also recommended that MSN thresholds be ‘in-line with when people are first accessing care, not based on calendar years.’ The AMA argued that providing greater flexibility in the assessment of eligibility for MSN support through a rolling-year model could ‘ensure patients who incur costs over the end of the calendar year receive the financial support they need.’
Precedent:
There is international precedent for using a rolling year model. In Sweden, the high-cost protection system caps the amount individuals are required to pay for medical services over a 12-month period. This period begins on the first healthcare visit, regardless of when it occurs during the year.
Public Support:
This list reflects publicly stated positions and should not necessarily be taken as endorsement of this specific brief.
News Coverage:
The Medical Republic - “Medicare Safety Net reforms can’t inadvertently disadvantage patients: AMA.” The AMA told the Medicare Safety Net review that the annual 1 January reset is an artificial barrier that misaligns with patient needs and MBS indexation, and recommended exploring continuous eligibility so support is not limited by the calendar year. By Laura Woodrow | Date: 06 December 2024 - Read the article here.
Royal Australian College of General Practitioners (newsGP) - “RACGP pushes for changes to Medicare Safety Net.” The RACGP urged lowering the Medicare Safety Net thresholds and introducing a rolling 12-month qualification period to better support low-income patients facing high out-of-pocket costs. By Morgan Liotta | Date: 15 November 2024 - Read the article here.
The Limbic (healthcare publication) - “Medicare safety net has ‘traps’ for chronic disease patients.” The Limbic reported that the calendar year system for the MSN results in higher out-of-pocket costs for those first accessing services later in the year, especially if they are also non-concessional lower-income individuals. By Geir O'Rourke | Date: 18 Jun 2024 - Read the article here.
Where to go to learn more:
RACGP response to the Medicare Safety Net Reform Consultation (RACGP) - This consultation paper provided a summary of the RACGP’s position on the current MSN system and its recommendations for reform. Read the full report here.
Medicare Safety Net Reform Consultation Paper (Australian Government Department of Health and Aged Care Services) - This consultation paper outlined the Government’s 2024 review of the MSN, explaining how the current system operates and highlighting issues related to: equity, complexity, cost pressures, and inviting stakeholder feedback on potential reform to better support people with high out-of-pocket medical expenses. Read the paper here.
Understanding the Medicare Safety Net (Robina Town Medical Centre) - This article outlined how the MSN reduces the cost of frequent out-of-hospital medical services by increasing Medicare rebates once yearly spending thresholds are reached, including eligibility and services included. Read the full article here.
What are Medicare Safety Nets Thresholds? (Services Australia) - This webpage outlines how the thresholds work, noting that once a person’s verified gap or out-of-pocket costs reach certain levels in a calendar year, higher Medicare rebates apply. It lists the 2025 thresholds for the Original Medicare Safety Net and the Extended Medicare Safety Net. Read the full webpage here.
Health Insurance Act 1973 (Cth) - Read the full Act here.
Human Perspective:
Emily hadn’t expected her health to unravel just before Christmas. She found herself in a flare-up of her chronic health conditions, and the sudden string of specialist appointments spiked her medical expenses faster than she could keep track. Money was already tight, and every invoice made her stomach clench a little more. A friend told her about the Medicare Safety Net. She realised she was close to the threshold - close enough that with one or two more appointments, she would reach the threshold and qualify to receive higher rebates for her medical expenses. For the first time in weeks, she felt a glimmer of relief. She booked her follow-up specialists for January, reassured that help was finally in sight. But on 10 January, she discovered the Safety Net resets on 1 January. All those appointments she thought would push her over the line no longer counted towards the threshold, which meant that she would not receive the higher MSN rebate. On 1 January, she was back at zero. Emily’s heart sank. If her health issues had started earlier in the year, she would have easily reached the threshold and had some much-needed financial relief. Instead, because her needs happened at the wrong time of year, she missed out entirely.
To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.
Conflict of interest/acknowledgment statement:
N/A
Support
If your organisation would like to add your support to this paper or suggest amendments, please email Info@foreaustralia.com.
Disclaimers
Please review all FORE disclaimers here.
Reference list:
Australian Medical Association. (2024). AMA submission to the Medicare Safety Net Reform. https://www.ama.com.au/sites/default/files/2024-12/AMA%20submission%20to%20the%20Medicare%20Safety%20Net%20Reform.pdf
Australian Government Department of Health, Disability and Ageing. (2025). Medicare safety nets.
https://www.health.gov.au/topics/medicare/about/safety-nets
Cancer Council. (2024). Medicare Safety Net Reform. Cancer Council. https://www.cancer.org.au/assets/pdf/medicare-saftey-net-reform-public-summary
Consumers Health Forum of Australia. (2025). Federal Budget 2025-26. https://www.datocms-assets.com/144433/1740089837-consumers-health-forum-of-australia-chf-2025-budget-submission.pdf
Health Insurance Act 1973 (Cth).
https://www.legislation.gov.au/C2004A00101/latest/text
Health Insurance Act 1973 - Section 10AC.
https://classic.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s10ac.html
Health Insurance Act 1973 - Section 10ACA.
https://classic.austlii.edu.au/au/legis/cth/consol_act/hia1973164/s10ac.html
Informationsverige.se. (2025). Rights and obligations when using the medical care services. Guiden Till Det Svenska Samhället. https://www.informationsverige.se/en/om-sverige/att-varda-sin-halsa-i-sverige/rattigheter-och-skyldigheter-i-motet-med-varden.html
Naghsh-Nejad, M., & van Gool, K. (2024). Impact of time of diagnosis on out-of-pocket costs of cancer treatment, a side effect of health insurance design in Australia. Health Policy, 145, 105055. https://doi.org/10.1016/j.healthpol.2024.105055
Royal Australian College of General Practitioners. (2024). RACGP response to the Medicare Safety Net Reform Consultation. East Melbourne: Royal Australian College of General Practitioners. https://www.racgp.org.au/FSDEDEV/media/documents/Advocacy/RACGP-submission_Medicare-Safety-Net-Reform-Consultation.pdf
Services Australia. (2025). What are the thresholds: Find the threshold amounts for Medicare Safety Nets. Australian Government. https://www.servicesaustralia.gov.au/what-are-medicare-safety-nets-thresholds?context=22001
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