High Cost Claims Scheme

Government Changes to Medical Indemnity Contributions

The Federal Government is reducing its contribution to high cost claims via the High Cost Claims Scheme (HCCS) from 1 July 2018, which will result in cost increases for all medical indemnity insurers. This change will not affect this year’s premiums, however it will impact on premium prices for our Members in 2018.

Changes to the HCCS from 1 July 2018

The HCCS currently reimburses medical indemnity insurers 50% of the insurance payout over $300,000 for each claim resulting in payouts over that amount.

The government’s Mid-Year Economic and Fiscal Outlook 2016-17 outlines reforms to the threshold for the HCCS from $300,000 to $500,000 (see page 171) to achieve savings of $35.9 million over three years for the government. In simplistic terms, those savings will result in higher claims costs for medical indemnity insurers, which will ultimately affect the medical indemnity premiums paid by the medical profession.

Ongoing advocacy

Government review of all schemes relating to medical indemnity insurers commenced recently, so the announcement of changes to the HCCS before the review was fully underway was surprising. We look forward to engaging with the government on the schemes to ensure Members’ best interests are taken into account. We will continue to advocate that any changes should ultimately be for the benefit of the profession and should recognise the issues facing the profession on other fronts. 


The federal government introduced the medical indemnity suite of legislation along with the HCCS and other schemes in 2002/2003 to  increase the financial security and affordability of medical indemnity providers, and put in place special rights and protections for medical practitioners  during a period of instability.

According to the Department of Health website, the HCCS currently “helps to produce downward pressure on premiums, particularly for doctors in high-risk areas by:

  • lowering the amount medical indemnity insurers have to pay out; and
  • reducing the amount of reinsurance medical indemnity insurers need to buy to fund large claims.”1

Want more information?

You can find more information on the scheme here.

  1. High Cost Claims Scheme (HCCS) – Frequently Asked Questions. Available at: http://www.health.gov.au/internet/main/publishing.nsf/Content/health-medicalindemnity-faq-hccs.htm