This report presents an evidence-based review of the Extended Medicare Safety Net (EMSN), which was introduced at a time when Australians were facing substantial increases in out-of-pocket costs for their medical services.

The objective of the review was to analyse: (1) the operation of the EMSN; (2) the extent to which the introduction of the EMSN has achieved its stated purpose; and (3) any changes to Medicare billing and patient access to medical services which have been a direct consequence of the introduction of the EMSN. The review is not intended to provide specific recommendations to government on the future operation of the EMSN.

The Extended Medicare Safety Net (EMSN) was a government policy designed to provide additional financial relief for those patients with high out-of-pocket costs, particularly those with complex and high health care needs.

The EMSN takes effect once a family or single person has reached a certain threshold in out-of-pocket costs incurred through their use of Medicare out-of-hospital services. Once the threshold is reached, the EMSN pays 80% of the out-of-pocket costs for Medicare-related services for the rest of the calendar year. The policy does not apply to in-hospital services or to medical services that are ineligible for Medicare benefits.

When the EMSN was introduced in March 2004, the lower threshold was $300 for Commonwealth concession cardholders and those families who qualified for a Family Tax Benefit Part A payment, and the general threshold was $700 for all other singles and families. From 1 January 2006, the lower threshold increased to $500 and the general threshold increased to $1,000. The thresholds are indexed to the Consumer Price Index at the start of every calendar year.