Canberrans could save between $20 and $130 on their compulsory third party insurance premiums, depending on which model a citizens' jury votes for this weekend.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
However those savings come at a cost, with only the most severely injured to receive a lump sum payment in the scheme cheapest to drivers.
The four models the 50 jurors will vote on were released publicly on Monday.
They were developed by a group of stakeholders - including insurers, lawyers and healthcare advocates - and are based on priorities identified by the jury in their first meetings last October.
Priorities included early and equitable access, value for money, support navigating the system and safeguards against people making false claims.
As a result, all four schemes make it easier to resolve claims early, give a degree of support to at-fault drivers, and give all injured parties access to treatment straight away.
However, as foreshadowed in modelling leaked to Fairfax Media last month, the models that give the most generous benefits are tempered by injury thresholds which severely cut the numbers of people eligible for payouts.
While current passenger car premiums are about $556, under:
- Model A, it would be between $510-$560 with an average reduction of about $20;
- Model B, it would range from $480-$540, with an average reduction of $50;
- Model C would see premiums of $440-$510 with an average reduction of $75;
- Model D would have the cheapest premiums between $385-$465 with an average reduction of $130.
But while Model D has the most generous benefits and the greatest savings, it also has the tightest restrictions on who can receive them.
Models A and B use Injury Scale Values (ISVs) to determine quality of life benefits under the common law system, which are capped at $500,000. Models C and D use Whole Person Impairment (WPI).
- Model A: Gives all injured parties access to treatment and paid care for up to six months. It also provides them with income payments at 95 per cent for three months then 80 per cent for the next three months, and funeral cover up to $15,000.
- Model B: Gives treatment and paid care for up to 12 months. It provides income payments at 95 per cent for three months then 80 per cent for the next nine months. The funeral is covered up to $15,000, plus dependants get a payout of up to $50,000.
- Model C: Gives treatment, paid care and income support for up to five years. However income support is limited to those with at least 10 per cent Whole Person Impairment. Parties can receive quality of life benefits but only up to $350,000, and only if at least 5 per cent impairment. Funerals are covered up to $15,000 and there's dependant support up to $250,000.
- Model D: Gives treatment, paid care and income support for up to five years. Income support is not subject to a Whole Person Impairment assessment but only those with higher than 5 per cent impairment value can apply for a quality of life benefit of up to $350,000. Funeral cover is $15,000 and dependents get up to $350,000 support.
Additionally, injured not-at-fault drivers can pursue common law benefits. Benefits under the models include:
- Model A: Treatment, care and income support for a longer term. It covers the whole cost of the funeral and whatever dependants claim. However their quality of life payment is capped at $500,000 and subject to the injury scale.
- Model B: Treatment and care longer term, including gratuitous care, based on the 6/6 rule. Income support is provided for the longer term although it's capped to the defined benefits in the first year. It also covers the whole cost of the funeral and whatever dependants claim, but like Model A, their quality of life payment is capped at $500,000 and subject to the injury scale.
- Model C: Treatment, income support and gratuitous care longer term, based on the 6/6 rule at minimum wage. Income support is available to everyone for up to two years, and for those assessed at 10 per cent impairment for a further three years. Funeral costs and dependants claims are covered. However quality of life benefits are capped at $500,000.
- Model D: Treatment, income and paid care longer term, but only for those assessed at 10 per cent impairment value or higher. Those assessed at less than 10 per cent impairment can access income support for five years. Funeral costs and dependants claims are covered. Quality of life benefits are capped at $500,000 and are only available to those assessed at 10 per cent impairment or higher.
However Ernst and Young Modelling showed 48 per cent of not-at-fault claimants under the ACT's current scheme would not pass 10 per cent Whole Person Impairment.
It estimated only 100 of the 900 current not-at-fault claims would meet the 10 per cent impairment threshold, and only 295 would meet the 5 per cent impairment threshold.
By using Injury Scale Values and Whole Person Impairment, Ernst and Young predicted the number of legally represented, common law claims would fall from 580 under the current scheme to: 495 under Model A; 465 in Model B; 375 in Model C; and 100 in Model D.
Finity Consulting principal Geoff Atkins, who designed the schemes, said while thresholds felt unfair to some, it was a way of constraining the cost of the scheme.
In its brief to scheme designers, the ACT government said the cost of premiums could not rise.
"The reason we're using thresholds is that relatively minor injuries, in particular soft tissue injuries in the neck and back, use up a lot of fund available in the current claims system," Mr Atkins said.
"While it reduces the lump sums available to people with relatively minor injuries, it caps the cost of the overall scheme and ensures more resources are devoted to people with more serious issues."
The thresholds also include some flexibility to factor in lifestyle into lump sum payouts, although that becomes more rigid as the models move from A to D, Mr Atkins said.
That would mean under the more permissive models, the quality of life payment for someone with a smashed kneecap would be different, if they were a marathon runner or a computer games enthusiast in their spare time.
The jury will assess which of the schemes best fits their priorities - not which scheme they think is best - and will submit a final report to Chief Minister Andrew Barr after this weekend.
Mr Barr pledged when the jury was announced that he would uphold their decision. Legislation is expected to be tabled before the end of the year.
Clarification: This story incorrectly stated the savings would be between $30 and $130, instead of $20 and $130. The details of Model C have been updated and terminology around lump sum payments clarified to distinguish between defined benefits, like payments for treatments, and quality of life payouts.
