The move is set to drive homebirths underground, with expectant mothers and their babies at risk.
There are fears women determined to have a homebirth will "go it alone" like birthing advocate Janet Fraser, whose baby died during a natural water birth in April ...
Under the draft Health Practitioner Regulation National Law, released last week, a midwife cannot be registered unless she has insurance.
But with insurance companies and the Government so far refusing to include homebirths in the indemnity scheme, midwives will face being de-registered if they attend a homebirth.
... Australian College of Midwives boss Dr Barbara Vernon said the Government's intention was obvious.
"I had been optimistic until now when you can see it in black and white," she said.
"Even though only less than half a per cent of women have homebirths, they should have the same rights as a woman who chooses to have a caesarean. Homebirths won't stop."
About 150 midwives do homebirths in Australia. Called independent or private midwives, most do not work in a hospital and are uninsured.
But from July 2010, they will no longer be able to call themselves midwives even though they are trained. Only those insured and registered can use the term midwife, otherwise they face a $30,000 fine.
There are about 700 homebirths a year but some say this may be as high as 2100 as they are under-reported.
For TV presenter and marriage celebrant Elizabeth Trevan, giving birth to her 18-month old twins Nash and Harvey at home was an "overwhelming experience."
... Home Births Australia secretary Justine Caines said the new law took away the rights of women.
"It technically makes homebirthing illegal," she said.
The Royal Australasian College of Obstetricians and Gynaecologists is against homebirths.
I have been informed that insurance will be provided for provate midwives who birth their clients in hospital. Homebirth will not be insured, however if the midwife also works in a hospital, she will be able to obtain insurance and thus register.