For a 66-year-old retiree who spent all her working life in retail outlets, the arithmetic of ageing is brutally simple: higher grocery prices, a fixed pension and a healthcare premium that escalates faster in this paradise.

A pensioner who turned to the Age Concern Bermuda hardship fund to keep her afloat and to ensure the prescriptions are filled has a choice between paying rent, buying food or paying for medication. A lived, granular version of macroeconomic trend line that has climbed for two decades.

Imperatively, Bermuda now spends more on healthcare than nearly any country in the world: a health system built to protect the vulnerable is now pricing them out.

A pause here — this piece is not pointing fingers politically, but rather seeks to set the numbers straight all the way to the kitchen table where they are felt.

A system spending far beyond it means

According to Bermuda Health Council, total health system expenditure rose from $426.4 million in fiscal year 2007 to $817.6 million in FY2023, an increase of 92 per cent over 16 years averaging 5.7 per cent a year. This growth running is ahead of wage growth, pension growth, and general inflation over the same period.

Health spending represents 11.6 per cent of GDP, the third highest ratio among the Organisation for Economic Co-operation and Development comparator countries, well above the OECD average of 9.3 per cent (PAHO, BHS, 2022-2027). This data shows per-capita spending placement above $11,952, among the highest recorded anywhere.

Its imperative to say that none of this is abstract as the Bermuda Health Strategy 2022-2027 reports that 13 per cent of residents (8,274 people) are diabetic, a rate only matched by two OECD countries.

Needless to say, half the population (31,824 people) live with at least one chronic condition, and one third have high blood pressure or high cholesterol. Dialysis alone costs the system roughly $29 million a year with demand roughly growing at 10 per cent per annum.

The painful truth is that an ageing population is colliding with a small, high-cost health system and someone must pay the difference — the question is, who pays?

The premium spiral

The government-set Standard Premium Rate, a mandatory reinsurance component embedded in every health insurance policy in Bermuda, was frozen at $400.31 per member per month from November 2021 through March 2026, as the government used the Excess Borrowing Fund to shield household through the pandemic and cost-of-living crisis (Government of Bermuda, 2026a).

Effective April 1, 2026, that freeze ended and the SPR rose to $439.55 per member per house, a single step increase of $39.24 driven in large part by $38 million retroactive hospital-staff salary payments.

Healthcare inflation in Bermuda runs deep around 10 per cent a year. This should concern every household on a fixed income; a system that raises its baseline by roughly a tenth every year does not merely rise, it compounds.

To this, it will be prudent to say precisely what the SPR is and is not. It is the government-mandated floor built into every policy, not the full premium a household or employer pays. Typically, out-of-pocket costs sit on top of it, a routine GP visit runs from approximately $80 to $125 and a specialist consultation around $310. Sadly, for the underinsured and uninsured, these are cash costs at the point of care, not smoothed out through monthly premium at all. Think about that, who are squeezed more?

Pensioners squeezed from both sides

Age Concern Bermuda, the island’s leading senior advocacy organisation, stated that it supported or provided emergency financial assistance to 211 older adults last year alone, and heard from seniors “struggling to afford groceries and medication”.

Bermuda’s ageing population is growing, whether we like it or not, and by 2030, the Government projects one in four residents will be 65 or older. Hence, the basic contributory pension, the safety net for seniors with limited private savings, was raised to $1,180 per month in October 2024, with the maximum monthly benefit set at $1,713 (Government of Bermuda, 2024). A further 1.74 per cent cost-of-living increase was approved in 2026. Now set against that income, the arithmetic of the SPR increase is stark.

The SPR component alone, for a retired couple, before any additional premium, co-pay, or deductible, comes to $879.10 a month, roughly 75 per cent on a single basic pension.

To the Government’s credit, it exempted Futurecare enrollees, most of whom are seniors. However, Futurecare is a subsidised plan for lower-income seniors, specifically because so many cannot absorb full market premiums. Its existence is itself evidence of how unaffordable the general system has become. Pensioners who fall above the threshold income for Futurecare, or rely on private personal policies, are often paying rates far above group rates that are expensive to bear.

The statutory minimum wage rate of $17.13 per hour, set in 2025, is a high rate by global standards and equals to $2,969 a month for a full-time worker. On paper, that looks comfortable, but set against the cost-of-living estimate of more than $4,000 a month for a single person once rent is included (Wise, 2026), and against the rising SPR floor, the picture changes quickly.

For instance, for a household of four, the SPR component alone comes to $1,758.20 a month, well over half of one minimum wage earner’s entire income, before rent, food, transport, or any additional premium above the SPR floor.

This is the spiral effect in miniature — health system costs rise because of medical inflation, an ageing population, and rising chronic disease, the SPR rises to fund the system, insurers pass on the increase in full premiums, and low-wage and fixed-income households pay the price.

The coverage gap: when the squeeze becomes an exit

For a meaningful share of the population, the response to rising costs is not to pay more — it is to go without. A recent publication by the Pan American Health Organisation indicates that 12 per cent of Bermudian residents are uninsured outright and a further 23 per cent are unable to afford adequate coverage or are underinsured, meaning a combined 35 per cent of the population are without adequate protection against medical shock (PAHO, 2025).

The path forward and mitigation

A proactive fixation is possible, but does require the political courage to treat healthcare cost inflation as a structural fiscal issue, not a series of one-off ministerial statements.

My three suggestions are:

• Index protection to the people who need them most, not just the headline rate. Futurecare exemption from the latest SPR increase is the right instinct, it needs to be widened and automated with eligibility thresholds reviewed annually against actual living costs, not eroded by inflation.

• Attack the cost drivers, not only premium. With chronic disease driving the bulk of expenditure growth and dialysis costs alone rising 10 per cent a year, a sustained investment in prevention and primary care is not a soft option, it is only a lever that bends the underlying cost curve rather than simply redistributing who pays for it.

• Lastly, publish the trajectory, not just the increase. If healthcare inflation is genuinely running near 10 per cent a year, household and employers need published, multiyear projections of the SPR.

The trajectory of Bermuda can become the safest and best insured in the world, or the Atlantic, but what it cannot endure is a fiscal, social or moral system where the price of paradise is rising faster than the incomes of citizens.

References

Bermuda Health Council (2025) National Health Accounts: FY2007 — FY2023. Cited in Bernews (2025) and Royal Gazette (2025).

Government of Bermuda (2026a) 'Update on the Standard Premium Rate for the Upcoming Fiscal Year', Ministerial Statement, 6 March. Available at: gov.bm.

Pan American Health Organisation (PAHO) (2025) Bermuda — Territory Profile, Health in the Americas. Available at: hia.paho.org/en/node/183.

Wise (2026) Cost of Living in Bermuda 2026. Available at: wise.com/gb/cost-of-living/Bermuda.

• David Annan, PhD, lectures on economics at Bermuda College, and is an economist and policy analyst