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Premiums for Govt health care set to rise

The cost of Government's basic health care plan has jumped 60 percent in two years.

Meanwhile, the cost of FutureCare has also increased. Senior citizens will be asked to pay six to 25 percent more for Government health insurance depending on the plan they're enrolled in.

The changes were announced by Health Minister Zane DeSilva yesterday.

He said the monthly Heath Insurance Plan (HIP) premium would be $384 a month starting April 1.

It represents an $86 increase from the 2010-2011 fiscal year and a $144 increase from the 2009-2010 premium.

HIP covers unlimited inpatient care at King Edward VII Memorial Hospital as well as 40 days' inpatient treatment at Mid-Atlantic Wellness Institute. It also covers some specialist treatment at the hospital as well as a portion of annual visits to a physician.

The number of people on HIP has risen by 500 over the past 12 months. There are currently 3,203 HIP policyholders.

Yesterday, Mr DeSilva said the cost of enrolling in the programme had to increase to ensure the long-term viability of the health plan.

“The primary reasons for this significant premium increase are: increases in utilisation; increases in medical inflation in Bermuda; and increases in administration costs,” he said.

HIP went from having a $4.1 million surplus in 2009 to a $3.6 million deficit in 2010. Mr DeSilva said the programme's surplus had been inflated for years as a result of a slow turn-around time for paying claims. HIP also added benefits, such as dental care in 2008, and automated its claims process last year without increasing the premiums.

As a result of these issues Mr DeSilva said: “The significant premium increase is needed and is the right thing to do at this time. All health insurers in Bermuda are experiencing similar increases in claims costs.

“The Ministry of Health is working closely with the Health Insurance Committee, the Health Insurance Department and the Ministry of Finance to ensure financial support is available to HIP in fiscal 2011-2012.”

As for FutureCare, Mr DeSilva said that would also be rising.

There are currently 2,840 people on FutureCare; approximately 400 of them receive financial assistance to help cover the cost of the plan.

The plan was first implemented in 2009 for seniors who were on HIP at the time. Approximately 2,600 people joined in the first phase. Their premium will rise this year from $300 to $375.

Phase two, which opened in 2010 and was for seniors over 70, saw an additional 160 seniors join the health care plan. Their premium will rise from $600 to $635 in April.

This year Government will implement the third and final phase of the programme which means all seniors are eligible to join the plan. Anyone who joins phase three will pay $635.

Mr DeSilva said: “In doing this, the Government of Bermuda has now fully achieved its promise of offering an affordable and comprehensive health insurance plan to all seniors.”

As of March 31,2010 the FutureCare plan had an $8.2 million surplus.

Mr DeSilva added: “We are prudently managing HIP and FutureCare. Our external actuaries provide advice to the Ministry to ensure the sustainability of the funds. Appropriate premiums are required to ensure FutureCare and HIP's viability. This means we must act both fiscally and actuarially responsible, and at times that means by increasing premiums. We must avoid prolonged periods where premiums are inadequate to cover the risks accepted.”

He added that the Government must also ensure they manage risks properly and place limitations on benefits where needed. Government must also control reimbursement rates, manage administrative expenses and look for ways to generate greater efficiencies.

The cost of health care is increasing.

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Published March 22, 2011 at 9:00 am (Updated March 22, 2011 at 9:56 am)

Premiums for Govt health care set to rise

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