Federal Funding for Medicare

IBISWorld expects federal funding for Medicare to increase by 8.1% in 2024-25, to reach $32.0 billion. The Federal Government is investing heavily in Medicare to provide Australians with a more accessible healthcare system amid inflationary and cost-of-living pressures. As part of the Federal Budget 2024-25, the government has committed $2.8 billion to Medicare’s reform, including a $1.2 billion package designed to alleviate pressure off hospitals. The budget also includes the plan to open 29 Medicare Urgent Care Clinics, designed to take pressure off emergency departments, bringing the total number of clinics across Australia to 87. The tripling of bulk billing incentives, implemented in November 2023, has also supported funding growth. Ongoing demographic trends, like the ageing Australian population and general population growth, are also expected to continue driving funding growth as the volume of patients serviced by medical practitioners increases.

Growth in federal funding for Medicare is determined by the demand for healthcare services and treatment costs. Demand for services is linked to population growth and age demographics. Older people are generally more susceptible to chronic diseases and illnesses, which makes them more likely to visit a GP or specialist than younger, healthier people. The increasing share of the population aged 70 years and over has meant that a greater proportion of the population is relying more heavily on Medicare funding, which has driven significant funding growth. Overall population growth has also increased Medicare funding, as the expanding population has led to more people needing to visit health professionals for various ailments and illnesses.