GPs have been willing to bulk bill for over 80% of GP consultations, but where local conditions permit, they are comfortable to charge patients what the market will bear. Specialists have generally opposed bulk billing, except (in some instances) for Concession card holders. It is paradoxical that the federal government sets a ‘Schedule Fee’ for Medicare services, when it has no ability to control fees. The reality is that the Medicare Schedule Fee is a misnomer, because it is no more than a ‘benefit’ for medical services. Medicare arrangements should match the constitutional realities. The abolition of the Schedule Fee (by setting it at zero) under the Health Insurance Regulations would enable its replacement by the publication of a ‘benefit payable’ on items listed on the Medicare Benefits Schedule. This would eliminate any need for governments to undertake the politically challenging task of introducing a GP co-payment. The federal government should also save itself the contradiction and the cost of paying GPs incentives to bulk bill by abolishing both the Schedule Fee and the GP incentive payments simultaneously.