Prescription Charges
May 15th, 2012 at 11:00 am by David FarrarTracy Watkins at Stuff reports:
Prescription charges will increase from $3 an item to $5 an item in next week’s Budget, as the Government moves to offset the cost of extra health spending in the “zero Budget”.
The new charge will cover up to a maximum of 20 items from January 1 next year, raising $20m in the first year and $40m after that.
Health Minister Tony Ryall and Prime Minister John Key said the money raised would be reinvested in the health sector.
“Despite tight financial times and what will be a zero Budget on May 24, health will receive a big funding boost, which will come from savings within health and across the Government’s accounts,” Ryall said.
It was the first time the prescription charge has been increased in 20 years. There will continue to be no charge for under-sixes.
Despite this Hone Harawira is claiming children will die because of this. Anything for a cheap headline.
The fee used to be $15, and Labour in 2004 reduced it to $3. This increase is a maximum $40 per year per person, so I don’t think will be a huge impact for most. The Government noted:
New Zealand continues to have low prescription charges compared to almost every other developed country.
In Australia, for example, the standard prescription charge is up to NZ$45 and in England it’s around NZ$16. In Australia people on low incomes pay around NZ$7.45 per item. In Finland, there is an annual limit of around NZ$1,107 per patient, after which there is a flat fee of around NZ$2.50 per medicine item.
I think Australia has the right idea. It is hugely economically inefficient to provide subsidies to wealthy people who don’t need them. We spend just over $1 billion a year on subsidized medicines.
What Id like to see happen is that low income people with a community services card get their medicine highly subsidized (pay only $3 to $5), while others pay somewhere between most and all of the cost themselves.
The real challenge for this Government is to reduce the huge amount of middle class welfare we have. We can support those less well off better, if we are not subsidizing medicines for millionaires.
UPDATE: The maximum possible extra cost per person family works out at 11c a day. This puts into context the hysterical claims by Harawira which the media are giving such prominence to.
So this week we have the offer of free voluntary contraception to beneficiaries being compared to Nazi war crimes by Josef Mengele, and a maximum 11c a day rise in the cost of prescriptions to killing children. Some on the left are getting rather demented.
Related posts:
- Prescription charges editorials
- $3 prescription charges
- Dissent on making pseudoephedrine prescription only
- Treasury’s welfare prescription
May 15th, 2012 at 11:09 am
The maximum is per family, not per person. So the new maximum charge is $100/family/year.
Vote:May 15th, 2012 at 11:11 am
Some medicines are incredibly expensive. I’d support a progressive subsidy, but expecting everyone but those on low income (depending on your definition) to pay for the majority of the cost of their medication would be a disproportionate expense for many. People typically don’t choose their diseases, remember.
Vote:May 15th, 2012 at 11:17 am
Those people who are ill or old and need health care the most don’t tend to be in full employment and therefore these extra changes will affect those people least able to afford them.
Vote:May 15th, 2012 at 11:21 am
Saving $40 mill. by adding a minimal charge is a reminder of how big the pill pushing industry has become (and probably 20%+ of prescribed medications are not imbibed for a variety of reasons).
Vote:May 15th, 2012 at 11:23 am
Having been a pharmacist prescription charges have always been a source of amusement. Most people believe the charge goes directly to the pharmacy, it does not. It is like GST, we collect it on behalf of the Government. Unpaid tax collectors. Most of the people who wanted to “come back and pay it on Thursday” invariably had a packet of smokes in thier top pocket. I totally disagree that rich people should pay more than those on low incomes and benefits, they are or have contributed from paying tax on the incomes that made them rich.
Vote:May 15th, 2012 at 11:35 am
What also pissed me off is that methadone prescriptions are exempt from the prescription charge, I don’t think it would be unreasonable to expect the junkies to pay $100 per year for thier daily fix. It costs the tax payer on average $3000 per year per person on methadone, notwithstanding the costs of the A&D clinic and the various benefits they invariably are on.
Vote:May 15th, 2012 at 11:38 am
Given that the charge has not been adjusted in 20 years, and assuming a rate of inflation over that period averaging 2% per annum, then just to keep pace with inflation the rate should be $4.46 per prescription anyway. Failure to even account for inflation has reduced the amount available for health spending and this measure redresses that.
Vote:May 15th, 2012 at 11:51 am
I am with adze on this one. People have effectively no control over if they get sick or have long term health problems. Remember the drug bill is over a billion dollars a year, as drugs are very expensive. Nobody can afford them, except people on over $100,000 a year, and as for millionaires, there are so few anyway. Most people pay the $15 an item as there are few people on a community services card. The chemist always puts the cost of the drug on the receipt and then the Government subsidy beside it. Many drugs are not subsidised and you pay full price.
Vote:You still have to back to the real problem and that is the Governments has to implement policies that grow the pie. I haven’t seen any of these since National have been in office. They also need to reduce middle class welfare that sees some people pay no tax at all, which is totally ridiculous. The productive sector get screwed in New Zealand and most people think this is great, as they say they have to pay their fair share, they do, many times over. They also produce most of the revenue that the country runs on.
May 15th, 2012 at 12:03 pm
One man’s welfare becomes another man’s redistribution of wealth.
No easy answer but what is becoming increasingly apparent is that the state is expected to do more and more across a wider and wider range of living costs. As hard as it sounds, there is a limit to the subsidies that can be provided to those “less well off” or “poor” or “disadvantaged” whatever you want to call it.
Somehow we have to turn round the definition of “the deserving” and allow some to live with their choices.
cue much wailing and cries of bene bashing and dead children and scenes of starvation and descriptions of 3rd world countries.
Lets face it guys, we are a 3rd world country and cannot support 30-50% of the population in the style that they have become accustomed to.
Vote:May 15th, 2012 at 12:11 pm
“The real challenge for this Government is to reduce the huge amount of middle class welfare we have. We can support those less well off better, if we are not subsidizing medicines for millionaires.”
David, the middle class are not millionaires. You’re conflating two very different groups of people.
I agree with you in your inclination but not in your substance. As a child of the lower middle class growing up through the 90s, your prescription sends shudders down my spine. There are plenty of people who barely get by on their own, but it is them that constantly seem to be reminded by the likes of you that they are well enough to look after themselves on their own. Quite a few of our middle class doesn’t really fall into that category.
Instead, they watch successive National governments sucker punch the few clawbacks they do get in their crusade against “middle class” welfare, while the real rich don’t really contribute at all and the “real poor” continue to get every, single, thing, subsidised.
I know this sounds all very “occupy” – it’s not meant to be. But “middle class welfare” is a phrase that gets my goat – its the middle class that gets shat on royally by both left and right. Looks like DPF is lining up for another dump right now.
Vote:May 15th, 2012 at 12:35 pm
Someone in todays General Debate did an exercise using RBNZ data that showed the $3 charge in real 2012 terms equates to $4.71.
I do not like paying more for anything. But $5 seems reasonable, and the continuation of the free under six policy makes Harawira’s statement plain bullshit.
Vote:May 15th, 2012 at 12:37 pm
Yet another fault with the system.
Vote:May 15th, 2012 at 12:48 pm
COuldn’t they make the whole system easier by linking the NHI numbers with IRD numbers, and then peoples perscription cost is linked to their tax rax in a way that those who earn more pay more? I for one certianly don’t mind paying a little bit more for perscriptions, if the savings go back into other areas of the health system.
Something along the lines of lowest bracket pays (a maximum) $4 an item up to the maximum 20 item limit, next bracket pay $7, next bracket $12, top bracket pay $20, and those on the unadvised rate get no subsidy.
Given that there is already a subsidy/price limit on going to the doctor, the better off amongst us shouldn’t mind forking out a little extra for the medicines. Not too many medicines are that expensive anyway, and not all medicines are subsidised anyway, I reme,ber when I tore a muscle in my back, due to other medications I was on I had to have some heavy duty pain reliever that Pharmac didn’t subsidise, and its cost was only $60′ish. Not really a huge cost for unsubsidised, so having subsidy linked to income isn’t the end of the world.
Most of the cost in the health system (and ACC) isn’t in the big things, its in the lots of little things, such as doctors visits for minor things, and perscription costs, and the physio costs before the part charge was brought in.
Just think of the extra medicines Pharmac would be able to buy if there was a scale of payments system, the best of both worlds really.
Vote:May 15th, 2012 at 12:50 pm
Oh and if Hawawira (and others on the left) is so up in arms about script costs going up for the first time in 20 years, then he won’t have a problem with benefir levels going back to 1992 levels then. Fairs fair and all that.
Vote:May 15th, 2012 at 1:04 pm
Davinci
Vote:I only mentioned that because the consequences of personal choice often inform people’s judgements about social policy here. So if we’re going to have a government subsidised pharmaceutical supply (and Pharmac is excellent), it’s useful to remember that (often, if not generally), the cost of an individual’s medication does not relate to the choices they personally made.
May 15th, 2012 at 1:04 pm
This morning my Pharmacist, and a DHB member, said that he would rather have seen a progressive increase.
Vote:But he said that whatever you charge however the non white “underclass” will not do anything which requires them to pay or do anything to help themselves – they can have a lotto ticket, smokes (cannabis), beers, have Sky television, thanks to the taxpayer, but not pay for prescription for their often very sick children.
They will wait until serious hospitalisation takes place – then complain to the media. Its always somebody elses fault, which has nothing to do with a prescription charge.
Whilst putting up the charge after 20 years will not change the poorest of thinkers. Sadly.
May 15th, 2012 at 1:24 pm
Children will die because of cigarette smoking drinking and gambling. If cigarettes go up $5/packet will Harawere say children will die because of that price increase because some will due to their parents wasting welfare money on smoking and drinking.
Vote:May 15th, 2012 at 1:25 pm
How many millions of the Whanau Ora funds were spent on Iwi piss-ups to “find themselves”? If this money hadn’t been wasted, then there would have been plenty left in the project to subsidise families in poverty who find it hard to manage the costs of medications for those over 6 years old.
The Mana party are the problem, not the solution if this is the best they can come up with – i.e. We want more! The reason there isn’t more is because our generation has paid out billions so that Iwi can look after their own priorities. Apparently that doesn’t include their disadvantaged.
PS. Paulus @ 1:04
Vote:How do you get subsidised Sky TV. I wouldn’t mind a bit of that so I can watch sport again.
May 15th, 2012 at 1:54 pm
It could have been upped to $20 and then there might be less waste. The very hard up have community cards and the rest of us aren’t picking up prescriptions every day, for goodness sake.
I believe we should all be contributing at least small amounts to our medical costs. It may help reduce the crowds at A&E who seem to use it as a free doctor service, even for their kids who have free medical care anyway.
Having graduated fees for such chicken feed amounts just increases the costs yet again in an unproductive way.
We are living in a fools’ paradise in NZ where we think we can still afford everything we always had – and more on top.
Vote:May 15th, 2012 at 2:16 pm
Hone Harawira was totally out of line with his criticism of the new prescription charges, Clown, and should check the facts first before shooting his mouth off. For his benefit the information relevant to Te Tai Tokerau can be found here:
http://www.workandincome.govt.nz/individuals/forms-and-brochures/community-services-card.html.
David Shearer was equally uninformed on prescription charges by making the wild accusation that the new rates were “robbing Peter to pay Paul.” Mr Shearer needs to lift his game beyond ill informed accusations or he will be gone, as Chris Trotter predicts, by the end of the year.
The rise in charges, the first in 20 years, is relatively modest and still ensures the affordability of medicine for all New Zealanders.
Vote:May 15th, 2012 at 2:20 pm
Lets not forget that the money raised is going to stop people who are actually dying of Cancer
Vote:So is Harawira is willing to kill people who could actually die to save some imaginary bludgers who can’t find 2 bucks?
May 15th, 2012 at 3:47 pm
If David Shearer doesn’t know all govt spending is robbing Peter to pay Paul he shouldn’t be in Parliament.
Vote:He is a bumbler, poor chap, and just can’t cut it.
May 15th, 2012 at 6:43 pm
More kids will still die from Maori Male fists. Stop your people killing your babies Hone before blaming others for events that have not occurred.
Vote:May 15th, 2012 at 6:44 pm
More bold tinkering from the government. Hurray! A whole $40 million! The government should take a breather after this bold move.
Vote:May 15th, 2012 at 7:15 pm
Let’s face it, a $2 increase is trivial.
I’m amazed that the media are beating this up as a “massive increase”.
Vote:May 15th, 2012 at 8:23 pm
Of course, if a child over the age if 6 has ongoing medication and his/her parent/s agave a low income, there is … No groans folks… Help from work and income for emergency medical costs or disability allowance. Seriously Hone, please think before opening your mouth…
Vote:May 16th, 2012 at 12:36 am
£7.5 in the UK – so about $15 at average exchange rates lately. However it is more if you go to a private practisoner (like I do).
Overall I think the NZ health system is pretty damn good for what we can afford. Its a reasonable compromise between public / private.
A big difference if you want to look at access to health care though is doctors in the UK are free (except private), so that saves you $80 at least from my last experience at home. So I would say already NZ gets its citizens to contibute more to going to the doctor than some.
Vote:May 16th, 2012 at 1:14 pm
yawn – yet again this site takes something ONE Maori person says and it opens the door for another round of Maori-bashing. Seriously guys, get a new script and stay on-topic
Vote: