Doctors’ insurance costs set to jump

Doctors are facing a hike in insurance costs after a surprise cut in government’s contributions to high-cost claims

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Doctors face a hike in insurance costs as a result of a surprise cut in government’s contributions to high-cost claims in its mid-year economic outlook.

 Leading insurer Avant predicts doctors’ premiums will jump by 5% on average as a result of the move, which is budgeted to save the federal coffers $36.1 million over two years.  

Avant expressed its “disappointment” at the added cost pressure on doctors, which was included without consultation in the Mid-Year Economic and Fiscal Outlook (MYEFO) announced on December 21.  

“Doctors face a range of cost pressures across the board and this move by the government will only add to the pressure,” Avant’s senior medical officer Dr Penny Browne said.  

“We believe that it will also mean higher out-of-pocket costs for patients.” 

From July 1, 2018, the eligibility threshold for claims attracting a 50% government contribution will rise from $300,000 to $500,000. 

“The medical indemnity schemes have provided stability to doctors’ premiums since the crisis of the early 2000s and the changes that the government has announced, with no consultation, are very concerning,” Dr Browne said.  

“The medical indemnity environment has been historically very volatile and introducing uncertainty again in this sector is counterproductive.” 

The High-Cost Claims Scheme was adopted under then health minister Tony Abbott to address a crisis caused by surging increases in medical indemnity insurance in the early 2000s that threatened the viability of some practices. 

The AMA has reported that improved profits in the medical insurance sector have encouraged the government to review the subsidy.  

But Dr Browne warned it was a delicate balance.  

“These schemes have ensured affordable premiums so that medical indemnity costs have not prevented patients accessing services,” she said. 

“Australia has a medical indemnity system that works well and should not be put at risk. 

“The government initiated a review but has then pre-empted its findings with this unilateral announcement.”