The Federal Government has finalised an agreement with Medical Insurance Group Australia for the introduction of Commonwealth-supported professional indemnity (PI) insurance for midwives.

The contract, announced last week by Federal Health Minister Nicola Roxon, will allow privately practising midwives to purchase their own insurance. Cover will commence at the start of next month. However, it doesn’t cover services provided during home births.

Midwives working as employees of hospitals or medical practices are generally covered by their employers’ insurance, but those in private practice have struggled to find cover.

“This is the first time since 2002 that midwives can purchase professional indemnity insurance,” Ms Roxon said.

“This arrangement will help midwives who wish to provide high-quality midwifery services to Australian women as part of a collaborative team with doctors and other health professionals.”

The initiative is a key part of the $120 million package of maternity reform measures the Government announced in the last federal Budget.

Contract winner MIGA is a doctor-owned national provider of medical indemnity insurance.

Under its contract with the Federal Government, MIGA will pay the first $100,000 of each eligible claim.

For claims between $100,000 and $2 million, MIGA will pay 20 cents in the dollar, with the Government contributing the remaining 80 cents. The Government will meet the full costs of claims over $2 million.

The premium for a midwife in full-time practice is expected to be about $7500 per year, and the scheme is expected to cost the Government $25.2 million over four years.

Eligible midwives must be registered and meet some additional requirements set by the Nursing and Midwifery Board of Australia. But this will also enable them to access new Medicare Benefits Schedule and Pharmaceutical Benefits Scheme arrangements.