The Turnbull government is putting off plans to change the Medicare safety net until next year, after failing to attract enough support on the Senate crossbench.
The changes were to lower the thresholds needed to access benefits for out-of-hospital services, while capping the amount payable for individual services once these have been reached. Psychiatric, oncology and IVF groups have fiercely opposed them because of concerns they will make services unaffordable for some patients.
The changes would have had to be passed this week - the final parliamentary sitting week of the year - in order to take effect from 1 January, 2016, as planned. They were expected to save the government $266.7 million over five years.
Health Minister Sussan Ley said on Tuesday that the government would be "pausing discussions" on the bill till after reviews on the Medicare Benefits Schedule and Primary Health Care, which are due to be delivered by the end of the year.
The bill was due for a vote in the Senate on Monday, but was twice delayed. Ms Ley is understood to have continued negotiating with the Greens and crossbench senators until Monday night. Labor will oppose the bill and some crossbenchers had not formed a position on it on Monday.
Fairfax Media last week reported that the government was rushing to pass the changes without publicly releasing details on the extent of their impact on chronically ill patients, going against the recommendation of a government-controlled Senate committee.
The government, Labor and medical groups have all disputed each others' estimates on expected hikes to out-of-hospital costs. The Department of Health told the committee 53,000 more people would benefit from the safety net under the changes, but has not published estimates of how many would have to pay higher out-of-pocket costs.
A spokeswoman for the department insisted it had given the committee a "full account of the data" underpinning the changes, saying: "It is standard practice for the department to not publicly release analysis of confidential Medicare claims data which may identity patients, in accordance with the privacy provisions of the Health Insurance Act 1973."
Ms Ley said she would continue to negotiate with crossbench senators, the opposition and the Greens to find "an agreeable solution as part of our broader discussions on Medicare and primary care reform".
She maintained that the changes aimed to address "significant inequities in a system failing to help the very people it's designed to protect – our most vulnerable patients with complex and costly medical needs," with most of the benefits from the safety net going to the wealthiest suburbs.
"However, at the end of the day, I was unwilling to compromise over the fundamental integrity of the policy's intention and design in favour of a quick political solution."
Greens leader Richard Di Natale said that he accepted that the current scheme was inflationary and distributed benefits unevenly: "But the fix wasn't the right fix. It impacted on a number of groups in a way that was simply untenable."
Senator Di Natale remains concerned about how the cap will affect chronically ill patients, with "not detailed enough modelling" available to understand the extent of the bill's impact. He is also against the government's plan to direct savings from the changes to the Medical Research Future Fund, rather than to frontline health services.
Shadow health spokeswoman Catherine King described the bill as "unfair and flawed". Its delay, she said, was "a victory for the hundreds of families who have emailed members of parliament in recent days with their deeply personal stories of how the government's proposed changes would hurt them".
Ms King blamed the minister for trying to rush changes despite evidence against the plans and said a broader inquiry should now be held into the current safety net.
