Minister for Revenue and Assistant Treasurer Helen Coonan today said the Opposition health spokesman was once again trying to mount a baseless scare campaign to frighten the sick.
Senator Coonan said Mr Smith had called for the Government guarantee to be extended immediately, despite the fact that it has five months left to run and the provisional liquidator of UMP/AMIL is not requesting an extension.
"Stephen Smith is proving to be the ALP's answer to Chicken Little," Senator Coonan said.
"Mr Smith obviously thinks that simply because he and his colleagues respond in a knee-jerk fashion to some media reports, the Government should do the same.
"Given that Mr Smith can not say how long the guarantee needs to be extended or why, it is very difficult to take him seriously.
"UMP/AMIL provisional liquidator David Lombe has not and is not asking for the guarantee to be extended beyond 31 December."
Senator Coonan said the guarantee would protect doctors for the next five months while a comprehensive solution was put into place.
"We are talking about a guarantee that is in place, providing protection for doctors for another five months while the solution is put in place", Senator Coonan said.
"This is not just a solution for UMP/AMIL but for medical indemnity insurance broadly - a comprehensive package of reforms that includes legal and prudential reform for the whole spectrum of medical indemnity insurance.
"The Government has been working urgently with doctors groups, states and territories, commercial insurers and the MDO's themselves to develop a sound longer-term solution.
"As announced by the Prime Minister in May, the Government's intention is to have a comprehensive framework of measures in place before 31 December."