AMA Declares IBNR Levy Too Taxing

"A levy by any other name is a tax and this tax would hit patients," Dr Glasson said.

"The AMA's Medical Professional Indemnity Task Force has been working to find an answer to the one big question being put to them by almost every doctor in NSW and Queensland. To be IBNR levied or not IBNR levied? That is the question. 'No' is the answer.

"The Task Force last night unanimously passed a motion formally withdrawing any AMA support for the idea of an IBNR levy.

"We welcome the Government's commitment to find a way to cover the unfunded IBNR 'tail' but this is not the way.

"All it will do is increase the cost of health services for all Australians. It is a tax on a family's health.

"Medical accidents in the 1990s should have been covered by medical indemnity premiums at the time but they were not. But it makes no sense to tax the patients and doctors for the next 10 years to pay for the medical mishaps of the past decade.

"Medical fees were lower in the 1990s but today's patients should not be made to pay for that through higher medical fees to make up the difference."

Dr Glasson said the wrong doctors will be taxed - doctors who have commenced practice recently and female doctors returning to work after having a baby or raising kids will be particularly disadvantaged.

"The whole idea is inequitable because doctors who have retired, become disabled or scaled back their practices will be paying as if they were still as fully active as they were three years ago.

"The Federal Government should be focussing on access and affordability for patients, not imposing a new health tax."

Dr Glasson said the AMA for a time was prepared to hear the Government's case for the levy but would never countenance it unless a range of measures had been implemented and downward pressure on indemnity premiums had been achieved.

"Indemnity costs have not been brought under control through nationwide tort law reform and plans for a long-term care scheme for the severely injured have not progressed.

"Federal and State Governments have done a lot of good work to address the crisis - and we thank them for their efforts - but the key problems are still there in regards to workability and affordability for the long term.

"The AMA cannot and will not support a levy or even consider a levy until the full range of reforms is in place and producing results.

"Our members and our patients will not tolerate this new tax.

"It would force medical fees up and hit the poorest and the sickest hardest.

"The Medicare schedule of the 1990s reflected lower premiums and lower health care costs and resulted in some savings to the Federal Government.

"The proposed levy would see the Government now recouping money that had, in effect, already been saved," Dr Glasson said.

The AMA also has warned the Health Insurance Commission against sending IBNR levy letters to doctors until these issues are fully resolved.

The AMA will seek urgent meetings with the Prime Minister and key Ministers to avert what would be a major setback in resolving the medical indemnity crisis.

Background:

IBNR claims - known as the 'tail' - involve medical incidents that may not reach litigation stage until many years after the event, more than 20 years in some States and Territories.

They can involve huge payouts such as that to Calandre Simpson in NSW last year, which was originally around $17 million including costs.

The unfunded IBNR tail is a major cause of the blowout in medical indemnity premiums and instability in the medical defence industry.

The Government has already introduced legislation giving it the power to impose the levy. The AMA has consistently opposed the levy unless all reforms were in place and producing results.

CONTACT:
John Flannery (02) 6270 5477 / (0419) 494 761
Judith Tokley (02) 6270 5471 / (0408) 824 306