Prima facie, the removal of the $5 co-payment for prescriptions was a welcome dose in Finance Minister Grant Robertson’s May Budget to take some pressure off struggling households.
Health Minister Dr Ayesha Verrall said removing the $5 charge will make it easier and cheaper for New Zealanders to access the medicines they need, having a meaningful impact on many, particularly those who have multiple prescriptions to fill on a regular basis.
This will benefit a huge range of people including almost 770,000 New Zealanders over the age of 65 who received prescription medicines in the community last year.
So far, so simple, although the cost is not insignificant at an estimated $618.6 million over four years.
The Government estimates more than 135,000 adults failed to collect their prescriptions because of cost in 2021/22, particularly the case among low-income families, Māori, Pasifika peoples, and disabled New Zealanders.
One of the intended consequences, as well as easing cost-of-living pressures on the most vulnerable, is to relieve the duress on the health system. Uncollected and therefore untaken prescriptions can lead to deteriorating health and require emergency attention.
Perhaps unintended was the trap laid by the policy for Opposition parties, whose natural response was to criticise it.
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National finance spokesperson Nicola Willis stated her party would reintroduce the $5 charge - arguing it was a “nice to have” and it would subsidise wealthy people. This was promptly pounced upon by social media posts, accusing the party of Grinch-like traits and, worse, wishing harm for our poorest citizens.
National Party leader Christopher Luxon sought to explain, however, that the party simply didn’t support the policy being universal and applied to everyone. “I think if I can pay, I should pay”. That said, he stood by the plan to bring it back.
In reality, the prescription cost has been easily manageable for many people. They need prescriptions relatively rarely, and their families’ requirements will get nowhere near the 20 items of medicine a year, after which prescriptions for the rest of that year are free.
Such people would not have been unduly troubled if the co-payment had remained. It may have even made more sense for the Government to charge a larger sum for each prescription but to lower the trigger point for free prescriptions.
There are other factors that drive up medical costs. One is the steep charge that many primary practices apply to the likes of simple repeat prescriptions. Another is the over-prescription of drugs. Some medicines prescribed by doctors appear to serve little purpose other than to mollify patient concerns rather than fit a genuine need. New Zealand’s use of antibiotics has risen to the highest in the OECD and has resulted in antibiotic-resistant infections.
If anything, we might be better looking at bringing prescription use down. The Government’s medicines budget has increased by 51 per cent since 2017.
Policies often have unintended consequences. Will this widely welcomed $5 saving also be one we come to regret?