IBNR Levy – Existing Features

IBNR Levy – Existing Features – 27 August 2003

  • Levy will be 1/2 of 1 July subscription rate payable over 10 years (< 500%s) – [CONFIRMED]
  • Only appliesto UMP members as at 30/6/00 – [CONFIRMED]
  • (MDAV and MDASA has reported unfunded liabilities but will not pay the levy)
  • UMP IBNR now calculated at 415 million as at 30/6/03 (460 million 30/6/02)
  • Existing 20% levy on UMP members ongoing until Dec ’05.
  • IBNR levy billed August ’03 payable by 1 November 2003 – [CONFIRMED]
  • No foreseeable off-set in UMP premiums going forward
  • Subsidies for neurosurgeons, O & G, and procedural GP’s *
  • Exemptions – estates of deceased members, retirees pre 31/12/01,
  • student members as at 30/6/00,
  • Exemption for doctors earning less than $5K in medical income in 2000-2001 and 2001-2002. **
  • * Cost of package said to be $58 million p.a.
    ** Source: Medical Observer, Heather Ferguson; August 15, 2003
    Reference: Medical Indemnity – Final Details of the Incurred but not Reported (IBNR) Indemnity Contribution, Senator The Hon Helen Coonan, 1 August 2003

IBNR Levy – Changes since last meeting

  • Exemptions for members aged 65+ (less than $5K in Medical income*). Those who retired after 31/12/01 and who retire in the life of the scheme will be eligible. [was pre 31/12/01]
  • Assistance for registrar GP’s undertaking procedural training (subsidy as per other subsidised groups) ie 80% of marginal premium costs above non procedural GP’s. *
  • One-off ability to defer payment 1 year’s payment. Deferred payment to be placed on the end of all other payments and paid last. Tax implications? Interest rate implications?
  • Exemption for doctors who have left private practice before 1/5/02 and have taken up full time salaried hospital positions
  • Exemption for doctors with comprehensive retroactive cover 1/7/03 in the form of discretionary cover subject to retroactive cover being converted into a contract.
  • Exemption for doctors whose entire IBNR has been taken up by a State or Territory government
  • Levy payment estimates year 1: GP’s $970; Procedural GP’s $2,300; ($3700); City obstetricians $8,100 ($11,800); Rural obstetricians $5,900; Neurosurgeons $9,700 ($15,700)
  • Imposition date was 1/8/03, now 15/8/03
  • Discounts for lump sum payments (possibly 22 ½ %)
  • * Cost of both initiatives said to be $120 million over 10 years ie $12 million p.a.
    * Medical income is the sum of the medicare benefit payable in respect of services rendered by you

Other Federal Government assistance

  • Federal Government assistance already announced
  • High cost claim scheme (50% over $2 million) cost $19 million p.a.
  • Blue sky scheme i.e. single claims over $15 or $20 million (recoverable from MDO’s through claw back known as “post event charge”)
  • Subsidies to GP proceduralists, neurosurgeons and O & G (cost $38 million)
  • Assumption of risk UMP IBNR $460 million cost ?
  • Claims guarantee to UMP cost ?
  • ACCC to monitor premium costs. Cost $1.5 million
  • Ipp report and related reforms

Other State Government assistance

  • NSW State Government assumption of risk for public patients in public hospitals
  • Legislation arising from Ipp report
Techno-Babble Bingo Game
IBNR Rally 2 - Speech by Stephen Milgate The levy they said we had to have!!!