Labor's 'Mediscare' campaign capitalised on Coalition's history of hostility to Medicare

The Australian Labor Party’s Medicare campaign has been dubbed an election changer.

While outsourcing data management and billing systems raises issues of confidentiality and access, the possible changes would not affect access to Medicare. To this extent, criticisms that Labor ran a misleading campaign have some basis.

But scare campaigns only work if there is some anxiety to build on. Labor’s Medicare campaign plugged into a long history of Coalition ambivalence – or open hostility – towards Medicare.

The Coalition’s hostility towards Medicare

The Whitlam government’s Medibank program, the predecessor of Medicare, faced furious opposition from the Liberals and (then) Country Party. Allied with the Australian Medical Association, the conservative opposition fought the introduction of universal health insurance, blocking it in the Senate.

Further reading:

Patient advocate or doctors' union? How the AMA flexes its political muscle

The Medibank legislation was forced through parliament in 1974 after a double dissolution election and the only joint sitting of both houses of Parliament. Even then, a rearguard High Court action invalidated crucial funding legislation. As a result of this resistance, Medibank was introduced in July 1975, only four months before the dismissal of the Whitlam government.

The Fraser Coalition government initially kept its promise to preserve Medibank. But through a series of complicated “reforms”, Fraser kept the name, but gradually turned the remnants into a means tested “welfare” system. In 1981 Medibank was abolished completely and Australia returned to the patchy and chaotic coverage of subsidised private health insurance.

This pattern of hostility was replicated against the Hawke government’s Medicare, which was introduced in 1984. For the next decade, Coalition politicians promised to set Australians free from the shackles of compulsory national health insurance.

The electorate was unimpressed. The low point of these attempts to replace universal coverage came with Peter Shack, the Liberal shadow health minister, admitting he had no workable policy going into the 1990 election:

“I want to say with all the frankness I can muster, the Liberal and National Parties do not have a particularly good track record in health, and you don’t need me to remind you of our last period in government.”

Coalition hostility to Medicare played a big part in Labor’s very successful scare campaign in the 1993 “GST” election. The John Hewson-led opposition promised to end bulk billing and restore the supremacy of private insurance. Analysts have determined the Medicare issue as more important than the GST in Keating’s triumph.

This sorry tale appeared to end in 1996. John Howard, heading for a Coalition landslide, reassured voters that not only would his government be “relaxed and comfortable”, but he recognised the error of attacking Medicare. He declared Australians “want Medicare kept” and pledged that “Medicare will remain totally in place under a Coalition government”.

Medicare as a ‘safety net’

Howard regarded health as a minefield best avoided for most of his first two terms. He repudiated suggestions that co-payments should be brought in for GP services, threatening bulk billing. At the same time, his language showed a continuing ambivalence towards universal coverage. He referred to Medicare as a “safety net”, with an implication it was more appropriate to those in trouble.

This “residual” approach saw Medicare as a discretionary government handout for those who could not pay their own way in the private system. John Deeble, Medicare’s prime architect, argued this was a fundamental assault on the basic principle of: “an insurance system where everyone contributes according to their income. They then have a universal right to coverage.”

Howard froze the level of GP rebates (fees) in the 1996 budget. This slowly squeezed GP incomes, forcing many to abandon bulk billing and charge upfront fees. Whether intentional or not, the decline of bulk billing revived old fears of Coalition intentions towards Medicare.

By 2003 the issue was hurting the government so badly, a new health minister, Tony Abbott, came in with an open cheque book to end the crisis. Even then, new bulk billing incentives were aimed selectively at children and pensioners. Howard argued: “it was never the design [of Medicare] … to guarantee bulk billing for every citizen.”

An extension of this “safety net” argument was a commitment to private health insurance. Both the Fraser and Howard governments tried to force higher-income earners into private insurance. The Howard government subsidised private insurance – but kept it largely to coverage of hospital and specialist services, maintaining Medicare’s monopoly over GP services.

The Abbott government’s Commission of Audit ended this truce. It argued that: “Expanded private health insurance coverage should be introduced for basic health services currently covered by Medicare. Higher-income earners should be required to insure for basic health services in place of Medicare.”

Political commentator Nikki Savva has argued the Commission’s position shocked Abbott and he ignored most of its recommendations. However, it is not surprising that when his government attempted to bring in new GP co-payments (a Commission recommendation), these were read as part of a fundamental assault on Medicare principles of bulk billing and universality.

Stifling real reform

These threats to Medicare’s survival have had a stifling effect on serious debate over the real problems of the health system. It has focused too much attention on bulk billing, which has become a symbol of universal access.

After the failed co-payment experiment, the Coalition government moved towards some serious reforms to measure the efficiency and value of Medicare services, and improve primary care.

These reforms will be threatened – and oppositions will be tempted by further Mediscare campaigns – if the broader framework of universalism is under siege.

This article was originally published in The Conversation by Associate Professor James Gillespie, Deputy Director, Menzies Centre for Health Policy at The University of Sydney.