Why many GPs no longer bulk bill

By Dr Sandra Skinner · October 2026

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Patients often ask why they are charged a gap fee to see their GP when Medicare is meant to cover the visit. The honest answer is that the Medicare rebate has not kept pace with the real cost of providing care for a long time, and recent changes have made things harder still. This article explains how we got here.

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A short history of the rebate

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When Medicare began in 1984, the rebate for a standard GP consultation was set at a level that broadly reflected the cost of the doctor's time and the practice behind them. Over the following decades, rebates were increased each year, but almost always by less than inflation. The Australian Medical Association calculates that between 1995 and 2022 Medicare rebates were indexed by an average of 1.1% a year, while consumer prices rose about 2.4% a year and wages about 3.5% a year. Over 40 years, that gap compounds into a large shortfall.

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The rebate freeze

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From 2013, the Federal Government paused the annual indexation of Medicare rebates in order to save money. The freeze was extended by successive governments and only lifted in stages: standard GP consultation rebates were frozen from 2014 until July 2018, while rebates for care plans, mental health items and many other services remained frozen until July 2019 or July 2020. Depending on the item, GP rebates were therefore frozen for between five and seven years. The savings to the Budget were estimated at around $3.9 billion. For practices, every one of those years brought rising rents, wages, insurance and compliance costs, with no change in what Medicare paid.

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The 2025 cuts to care plans

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On 1 July 2025 the Medicare items GPs use to coordinate care for people with chronic and complex conditions were restructured. Previously a GP could claim one item for preparing a GP Management Plan ($164.35) and a second for arranging Team Care Arrangements ($130.25), a total of $294.60 for this work. Both items were abolished and replaced by a single item worth $156.55. That is a cut of about 47%: the new rebate is worth a little over half of the two items it replaced. The review item was increased at the same time, so a GP who reviews a plan every three months can recover part of the difference, but for the initial planning work the cut is substantial, and it falls hardest on GPs who look after patients with multiple medical and mental health conditions.

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The new bulk billing incentive

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On 1 November 2025 the Government introduced a 12.5% loading on Medicare benefits for GP consultations, paid through the Bulk Billing Practice Incentive Program. It is worth far less to most GPs than it sounds, for three reasons:

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• It only applies if every GP in the practice bulk bills 100% of eligible services for every patient. If a single doctor charges a single gap fee, the whole practice is ineligible.

• Half of the loading goes to the practice and only half goes to the treating GP.

• For GPs who do a lot of care planning and longer consultations, the value of the loading is smaller than the value lost through the care-plan cuts introduced four months earlier.

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What this means for a GP's income (an estimate only)

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The effect varies enormously between doctors, so the figures below are an estimate and an average only.

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A GP who prepares a care plan with team care arrangements for about three patients a week (roughly 150 a year) now receives about $20,000 a year less in rebates for that work than before July 2025. Where plans are reviewed regularly, some of that is recovered, and the net loss is closer to $15,000 a year.

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For the majority of GPs who work in mixed-billing practices, the 12.5% incentive is worth nothing, because their practice does not meet the 100% bulk billing condition. Even for a GP in a practice that bulk bills everyone, the GP's half of the incentive is typically in the order of $15,000 to $20,000 a year. In other words, for many GPs the 2025 changes amount to an overall reduction in income, and for GPs doing complex and mental health care the reduction is larger.

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What it costs to run a practice

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General practices are small businesses. They employ receptionists and practice nurses, pay rent, software licences, medical consumables, indemnity insurance and accreditation fees, and must meet the RACGP Standards for General Practices to remain accredited, which involves detailed requirements for safety, infection control, record keeping, equipment and staff training. Independent estimates put the real cost of providing a standard 15-minute consultation at around $65 to $90 in a metropolitan area, and higher in regional areas. The Medicare rebate for that consultation is $45.05.

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Why many GPs do not bulk bill

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When the rebate is lower than the cost of providing the service, a practice that bulk bills everyone loses money on every visit. The only ways to make bulk billing work are to see more patients per hour, or to subsidise it with gap fees from other patients. Neither is possible for GPs who spend 20, 30 or 40 minutes with each patient dealing with complex medical problems or mental health. For these GPs, bulk billing is not financially viable, and a gap fee is the difference between keeping the doors open and closing them.

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Why GPs, and especially female GPs, are leaving

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The RACGP's Health of the Nation 2025 report found that around one in three GPs intend to stop practising within the next five years, and that seven in ten report burnout. Female GPs are particularly affected. On average they spend longer with each patient and do more mental health and women's health consultations, which are precisely the areas where Medicare pays least per hour. Studies of female GPs who have left the profession point to the combination of low rebates for longer consultations, administrative burden and lack of recognition for complex care. Every GP who leaves makes it harder for the rest of us to find a doctor, especially in regional and remote Australia.

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The picture in one chart

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If the rebate for a standard GP consultation had simply kept pace with inflation since 2005-06, it would be around $56 today. If it had kept pace with the cost of running a practice, it would be around $61. It is $45.05.