The proposal would:

Option 1: Abolish Medicare, the Pharmaceutical Benefits Scheme, Commonwealth health-related grants to state and local governments (including funding for public hospitals), the Private Health Insurance Rebate, federal government involvement in the delivery of health services, federal government prevention services other than for infectious diseases, and federal government funding of health research. Commonwealth involvement in the management of infectious diseases, health service standards, health statistics, and radiation protection would continue.

Option 2: as per Option 1, but use half of the savings to fund a medical expenses subsidy, means tested according to the following formula:

Where s is the government subsidy for an individual, c is the individual’s spending on currently subsidised medical goods and services including health insurance premia, i is the individual’s annual income, b is a low income threshold and h is a high income threshold. The subsidy would be available through the year based on the individual’s estimated income and medical costs. Instances of over subsidy would be reconciled through reduced subsidies in later years.

The proposal would have effect from 1 July 2017.