The Government is currently reviewing the Indemnity Insurance Fund (IIF) and the schemes in relation to medical indemnity that comprise it. Material changes to those schemes have the potential to impact medical indemnity and may have a flow-on effect to the medical profession, the wider community and indemnity premiums.

The background

The Federal Government introduced an Indemnity Insurance Fund (IIF) in the early 2000s, thanks to which a number of schemes were put in place to stabilise a medical indemnity sector which was undercapitalised and in crisis in NSW. Those schemes have been successful.

Medical practitioners, while practising, now enjoy choice of insurer in a healthy and competitive industry and long term protection after ceasing practice. The majority of the sector remains mutually owned – doctors for doctors still has a real meaning in medical indemnity.  

While financial stability of the sector was the immediate goal of the IIF, the underlying purpose was and, in our view, remains affordable indemnity insurance for doctors which flows to more affordable care and financial protection for doctors and ultimately patients.

The review

The Government is currently undertaking a review of the schemes under the IIF. These schemes provide subsidies to eligible doctors to assist with the cost of insurance, assistance to insurers with the cost of large claims and cover for claims over $20million. In addition the ROCS Scheme has been amassing funds to cover claims made after doctors have ceased medical practice or moved into the public system.

The issues

While the legislation and administration around these schemes is complex – and MDA National looks forward to the review in that regard – the schemes themselves provide valuable support to the medical profession and the community. Removal or significant reduction of scheme support will inevitably lead to premium increases in the short term. The medical claims environment in Australia has been relatively stable over recent years. This, together with the support of the schemes, has enabled insurers to limit the level of premium increases and build capital buffers to cover claims, enabling them to become healthy organisations which support the profession well. A change in that environment, coupled with reduction of government support, could, in the longer term, risk the stability which has been so hard won.

Next steps

MDA National will be making submissions to the government on the schemes and is working with industry bodies to ensure the government focuses on the short and long term outcomes for the profession, the community and the medical indemnity sector.

 

If you would like more information, please read the background material and discussion paper. And if you would like to contribute to the discussion, submissions may be made until 13 October 2017 by emailing Medical.indemnity@health.gov.au.