In 2013-14 the nation spent about $6.3 billion on GP services through Medicare. This represents about 6 per cent of all government health spending. Over the past decade, the amount Medicare spent on GP services has grown by about 50 per cent, or $60 per person in real terms.

How does Australia's health spending compare to that of other nations?

Total health spending accounted for 9.1 per cent of economic in Australia in 2011-2012, the most recent year for which international comparisons are available. This is slightly lower than the OECD average of 9.3 per cent. Australia's health spending as a proportion of GDP is less than that of the US (16.9 per cent) and a number of European nations including the Netherlands, France, Switzerland and Germany, all of which spend more than 11 per cent of GDP on health.

How many GP services are provided for free?

Currently almost 83 per cent of GP visits are bulk-billed, meaning the doctor accepts the Medicare rebate as payment for the service and does not charge the patient. Of the remaining patients who paid something, the average out of pocket cost was about $30 per visit.

What happened this week?

The government dropped its plan to cut the Medicare rebate for visits of less than 10 minutes from $37.05 to $16.95. This change was estimated to save $1.3 billion over four years.

Is the government making other changes to Medicare?

New Health Minister Sussan Ley has promised to consult doctors about Medicare reform. But the government has not withdrawn plans to cut the Medicare rebate for GP visits for non-concessional patients by $5 and invite doctors to charge these patients a fee of up to $5. The government also plans to extend an indexation freeze on all Medicare rebates until 2018.

Does the government need to get Senate support to introduce these changes?

The $5 cut to Medicare rebates can be achieved by regulation, without a parliamentary vote. However such changes could be overturned by a majority of the Senate. The government does need legislation to allow doctors to charge patients a $5 fee and bill Medicare for the rebate. Currently doctors must either bill Medicare and charge the patient nothing, or charge the patient the full cost of the service up front, leaving the patient to make their own Medicare claim.

The government does not need to make any change to implement its freeze of Medicare rebates – it simply does not index them.

Will patients who aren't currently bulk-billed be affected by these changes?

The rebate these patients receive from Medicare will be $5 less than it is today.

What will these changes mean for the budget bottom line?

The government expects the $5 cut to the rebate for non-concessional patients to save about $800 million over four years. The freeze on fees for other Medicare services is expected to save about $1.3 billion over the same period.

These and other health budget savings will go into a Medical Research Future Fund. Because only the investment income from this fund will be spent, this counts as an asset, improving the bottom line while allowing the government to argue it is holding true to its pre-election promise not to cut health funding.