Medicare Guarantee Act 2017

Overview

The Medicare Guarantee Act 2017, enacted by the Parliament of Australia and assented to on 26 June 2017, was introduced to establish the Medicare Guarantee Fund, which comprises the Medicare Guarantee Fund (Treasury) Special Account and the Medicare Guarantee Fund (Health) Special Account. This Act aims to ensure the availability of funds to cover Medicare benefit payments and payments under the Pharmaceutical Benefits Scheme. The Medicare Guarantee Fund (Treasury) Special Account is intended to hold amounts that are to be transferred to the Medicare Guarantee Fund (Health) Special Account, which will then be used to make the necessary payments. The Treasurer has the authority to credit specified amounts to the Medicare Guarantee Fund (Treasury) Special Account to ensure there are sufficient funds to cover these payments. The policy objective of the Act is to secure the long-term financial sustainability of Medicare by providing a dedicated funding source that can be reliably used for the payment of Medicare benefits and PBS payments. This ensures that the healthcare needs of Australians are met without interruption, thereby maintaining the integrity and accessibility of the Medicare system. The Act also allows for the transfer of surplus amounts from the Medicare Guarantee Fund (Health) Special Account to the general Consolidated Revenue Fund, subject to certain conditions and estimates.

Scope and Application

The Medicare Guarantee Act 2017 applies to the Commonwealth of Australia and concerns the establishment and management of the Medicare Guarantee Fund, which includes the Medicare Guarantee Fund (Treasury) Special Account and the Medicare Guarantee Fund (Health) Special Account. The Act is applicable to the entities responsible for the administration of these accounts, which are the Treasury Department and the Health Department respectively, and to the individuals holding the offices of the Treasurer and the Health Minister. The Act sets out the process for crediting and transferring funds between these accounts, ensuring the availability of funds to cover Medicare benefit payments and Pharmaceutical Benefits Scheme (PBS) payments. The geographic reach of the Act is national, as it pertains to the Commonwealth's financial arrangements and obligations under Medicare and the PBS. There are no stated exclusions, exemptions, or thresholds within the Act itself, but the administration and operation of the fund are subject to the broader provisions of the Public Governance, Performance and Accountability Act 2013. The Act also allows for the delegation of functions and powers by both the Treasurer and the Health Minister to specified employees within their respective departments.

Key Provisions

• The Medicare Guarantee Act 2017 (C2017A00071) establishes the Medicare Guarantee Fund, which comprises two special accounts: the Medicare Guarantee Fund (Treasury) Special Account and the Medicare Guarantee Fund (Health) Special Account. The primary role of the Medicare Guarantee Fund (Treasury) Special Account, as outlined in sections 6 and 7, is to ensure funds are available for transfer to the Medicare Guarantee Fund (Health) Special Account, established in section 12. The latter account is intended to fund Medicare benefit payments and payments under the Pharmaceutical Benefits Scheme, as stated in section 13.
• The Act imposes specific obligations on the Treasurer and the Health Minister. Under section 7, the Treasurer is required to determine the crediting of specified amounts to the Medicare Guarantee Fund (Treasury) Special Account, with these credits needing to occur at specified times or as determined by the Treasurer. Section 8 mandates the Treasurer to make an initial credit determination for the budget year beginning on 1 July 2017, with subsequent credits to be determined as soon as practicable after the release of each subsequent budget, as outlined in section 9. If during any budget year the combined balance of the two accounts falls short of the required funding, the Treasurer must make an additional credit determination to cover the shortfall, as stipulated in section 10. The purpose of the Medicare Guarantee Fund (Treasury) Special Account is clearly to maintain adequate funding for the Medicare Guarantee Fund (Health) Special Account, as noted in section 11.
• Section 14 outlines the process for transferring amounts from the Medicare Guarantee Fund (Treasury) Special Account to the Medicare Guarantee Fund (Health) Special Account, which must occur as soon as practicable after the Treasurer's direction. The Health Minister has the authority under section 15 to direct the debiting of surplus amounts from the Medicare Guarantee Fund (Health) Special Account, provided the specified day for this action does not fall within the budget year unless certain conditions are met, as detailed in the subsections.
• The Act also includes provisions regarding delegation of powers. Section 16 allows the Treasurer to delegate any functions or powers under this Act to the Secretary of the Treasury Department or an SES employee in the Treasury Department. Similarly, section 17 allows the Health Minister to delegate their functions or powers to the Secretary of the Health Department or an SES employee in the Health Department. Both delegations require the delegate to comply with any directions given by the respective minister.
• In terms of consequences for non-compliance, the Act does not explicitly state offences or penalties for breach. However, the appropriation provision in section 18 indicates that if the Medicare Guarantee Fund (Health) Special Account does not have sufficient funds to cover an impending Medicare benefit payment or PBS payment, the Consolidated Revenue Fund will be appropriated for that purpose. This ensures that payments under Medicare and the Pharmaceutical Benefits Scheme will not be interrupted, highlighting the critical importance of maintaining adequate funds in the Medicare Guarantee Fund (Health) Special Account.

Legal classification tags

Area of Law

Finance & Banking Law

Instrument

Act

Concepts

Definitions & Interpretation

Commencement Provisions

Delegation by the Treasurer

Delegation by the Health Minister

Credits to the Medicare Guarantee Fund (Treasury) Special Account

Appropriation