Page 880 - Week 03 - Tuesday, 20 March 2012
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had been finalised by October 2011. The analysis, nevertheless, indicates that the 2008 legislative changes have placed some downward pressure on premiums and that premiums would have been higher if the legislation were not in place.
The review considered reforms in other jurisdictions. It comments that most of the major CTP reforms undertaken in other jurisdictions were in place when the ACT’s reforms were enacted in 2008. Indeed, the territory appears to lag well behind all other jurisdictions in pursuing reforms in this area. There has been little national reform in this area over recent years. The national injury insurance scheme proposed by COAG is the most recent and prominent, but it remains a proposal at this stage. The amendments to the act currently proposed by the government and being considered by the public accounts committee will more closely align the territory to other jurisdictions with similar common law schemes.
The 2008 legislation established mechanisms for easier and faster access to medical payments without formal claim lodgement or legal representation. Around seven per cent of crash victims appeared to have taken up the $5,000, no fault medical payment option under chapter 3 of the act. This is low by one measure but, equally, an encouraging indication of the effect of the legislation. However, the report indicates that even this seven per cent may be an overestimate. Finalised claims show a greater proportion of medical and treatment costs. This is consistent with the intention of the legislation whereby claimants could obtain medical payments in a simpler and quicker process.
There is limited ACT-specific data available on health outcomes. The review, however, points to some indirect measures that would suggest beneficial effects of the legislation. There is considerable literature indicating improved health outcomes under early treatment, rehabilitation and return to health approaches. There is also literature indicating that people who seek compensation rather than early treatment suffer worse health outcomes compared to people who receive early treatment and receive less compensation. Based on these studies, it is reasonable to conclude that faster settlements and early treatment would have better health outcomes.
In conclusion, the review indicates there have been benefits from the legislative changes introduced in 2008. There is some increased focus on treatment and there have been some downward pressures on premiums. The review has been able to look at the less complex cases. Those are the cases that have been settled in the first three years. It is unlikely that such effects would continue to be seen once more complex claims are finalised. The 2008 legislative changes were not designed to address claims inflation in relation to moderate to severe injury cases. This report, in effect, indicates that while the 2008 changes have been beneficial, there is still more to be done if we want to have a sustainable and effective CTP system.
The legislative changes currently before the Assembly are designed to align the territory’s CTP scheme more closely to those in other jurisdictions. The benefits of the proposed reforms include the potential for a competitor to enter the market, which would likely lead to premium price competition as well as curtailing claim costs inflation. Benefits of the reforms in front of the Assembly would fall, of course, to all households in the territory.
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