House of Representatives

Second Reading Speech

Mr HUNT (Flinders - Minister for Health and Minister Assisting the Prime Minister for the Public Service and Cabinet)

I move:

That this bill be now read a second time.

It is a great pleasure and privilege to follow my deep friend the Treasurer today. In particular, he is the father of my goddaughter, who has her birthday this week, and I am the father of his goddaughter. Gratuitous, yes, but a pleasure and a privilege to be able to note.

Let me address the substance of the bill directly. The Medical and Midwife Indemnity Legislation Amendment Bill 2019 amends the Medical Indemnity Act 2002 and related legislation to streamline the legislation underpinning the government's support for medical indemnity insurance. This bill therefore provides certainty to insurers and practitioners of the Commonwealth's ongoing support for medical indemnity insurance, a level playing field for medical indemnity insurers and better protection for practitioners, be they medical, allied health or midwifery, in particular, which I want to note today.

I introduce the bill with the support of the Australian Medical Association, the Royal Australian College of General Practitioners, allied health leaders and midwifery leaders as well as medical indemnity insurers. The bill is the culmination of a two-year consultation process for improving existing arrangements. The government thanks all of the practitioner groups, industry representatives and medical indemnity insurers for their assistance in developing the bill.

The improvements in this bill take effect from 1 July 2020. The government is introducing this bill with ample time prior to effect so insurers have time to implement necessary changes to their operational requirements, and I am advised it comes with the support of the opposition. For that, I thank them - for their involvement and engagement. I would note, indeed, the member for Ballarat, at this table, who in her former role was a very constructive participant in this process.

The Australian government decided to subsidise the medical indemnity market to prevent market failure and stabilise the industry after Australia's largest medical indemnity provider, United Medical Protection, was placed in provisional liquidation in May 2002. At the time, there was uncertainty as to whether practitioners could access indemnity insurance, coinciding with an increase in claims, costs and premiums.

The government continues to fund seven professional indemnity schemes to enable privately practising doctors, health practitioners and midwives access to affordable professional indemnity insurance.

The government remains committed to guaranteeing that these schemes continue to operate. In the 2018-19 financial year alone, the government provided $83 million in support of practitioners and to the continual operation of these schemes. This bill continues and extends that support but places it on a sustainable and competitive basis, going forwards.

The bill will therefore now create a level playing field for medical indemnity insurers. The Premium Support Subsidy Scheme is currently administered via contracts with four medical indemnity insurers. These contracts include the obligation for insurers to provide universal cover arrangements in specific jurisdictions. The effect of this is that universal cover for medical practitioners only applies to four medical indemnity insurers. Schedule 5 of the bill requires all medical indemnity insurers to provide universal cover to doctors. If an insurer chooses to provide medical indemnity insurance they must provide universal cover.

Following passage of the bill, these contracts will cease on 1 July 2020 and the Premium Support Subsidy Scheme and universal cover obligations will be embedded in legislation to apply across the market. All insurers accessing the medical indemnity schemes will be subject to the same requirements, including the obligation to provide indemnity cover to any doctor who requires insurance.

By extending these arrangements to all participating insurers, the government is ensuring that medical practitioners are protected and will be guaranteed medical indemnity insurance.

Universal cover protects doctors, allied health workers and midwives from being denied cover where the claims history relates to their speciality, location or patient cohort. It also reduces the risk posed by these individuals by increasing the risk loading which insurers can apply and enabling insurers to refuse cover in exceptional circumstances. Insurers will also be supported and given the flexibility to increase the risk loading based on the risk posed by a practitioner up to a 200 per cent cap of the standard premium price.

In schedule 6 of the bill, for the purpose of providing clarity in administration, the government will be providing for a separate allied health practitioner high cost claims scheme. The allied health schemes will mirror the existing high cost claims and the exceptional claims schemes. We have developed this in conjunction with the allied health sector, with the pharmacy sector, in particular - and I want to acknowledge and thank them for their engagement - and, as well, with the midwifery community and the medical community.

Through these amendments, the government will also be closing an anomalous gap in the medical indemnity schemes for which employed privately practising midwives are currently excluded. Until recently, a small number of employed privately practising midwives were limited from accessing professional indemnity insurance and were unable to practise.

The bill will ensure claims against these midwives will be covered under the allied health schemes on the same basis as other medical and allied health practitioners.

This is a deeply important reform. It acknowledges the role of our midwives, it values the role of our midwives and it protects mothers and families who are making a choice of seeking support during their birthing process and their pregnancy from and through the work of midwives.

Ultimately, after introduction of the bill, the government will be continuing the collaborative approach in the drafting of regulations and rules that support the medical indemnity legislation. These instruments will consolidate and simplify the current legislative instruments. The government will be consulting further with key stakeholders on the legislative instruments in October 2019 and looks forward to working with practitioner groups and insurers on the development of these instruments. I commend the bill to the House.

Debate adjourned.