Taxpayer-supported indemnity to be scrutinised

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The future of taxpayer support for medical indemnity premiums will come under scrutiny as part of a ‘first principles review’ by the Federal Government.

Five financial support schemes for doctors were introduced in the wake of the 2002 indemnity crisis, which triggered soaring premiums and the near-collapse of Australia’s biggest medical insurance company, United Medical Protection.

Thee schemes remained largely undisturbed until December, when the government abruptly announced the scaling back of the High Cost Claims Scheme and an investigation into the broader system.

The terms of reference for that investigation, released last week, confirm that all five schemes, worth around $100 million a year, will be on the table.

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Savings are already being made. Next year, the threshold for the High Cost Claims Scheme, under which the government pays half of every payout, will rise from $300,000 to $500,000.

The change will save the government about $10 million a year. Medical defence organisations have warned it will it push up doctors' premiums by 5%.

The review, conducted by the Federal Department of Health, will “consider the appropriate level of Commonwealth support needed to continue stability, affordability and accessibility of professional indemnity insurance”.

Dr Penny Browne, senior medical officer at Avant Mutual, said the terms of reference were broad and doctors would get to see more detail when the government released its discussion paper.

“Avant’s position is very clear. The medical indemnity schemes have provided stability to doctors’ premiums since the crisis of the early 2000s, which has helped maintain patient access,” she said.

“Medical indemnity has historically been volatile and introducing uncertainty again in this sector is counterproductive.

“The schemes should be retained.”