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BHC welcomes higher fees for health insurers

Amendments increasing fees for health insurers have been approved by the Senate.

According to the Government, insurers did not object to the increases, which will help to fund the work of the Bermuda Health Council.

The Health Insurance Amendment 2017, establishes a tiered fee structure for the renewal of approved health insurance schemes and the renewal of insurance licences.

Both fees had previously been set at $1,000, the amendments set out a range of significantly higher rates based on gross premiums.

The new fees will range from $12,500 in the lowest band, when annual gross revenue falls below $25 million, to $187,500 when annual gross premiums exceed $175 million.

Crystal Caesar, starting the debate in the Senate, said the increase would go towards the BHC. She called the $1,000 fee “insufficient”.

“Health insurance currently finances 62 per cent of all health system expenditure,” she said.

“The need to provide adequate and affordable health insurance coverage to all residents in Bermuda becomes more pronounced as the population ages and the incidence of chronic diseases increases.

“Within this context, the Bermuda Health Council has increased oversight focusing on areas of non-compliance and risks to the health system resulting from the business activities of health insurers and approved schemes.

“Regulatory oversight is especially important in the context of employers' and public demand for more affordable health insurance premiums.”

Ms Caesar added that the island's health insurers were consulted about the increase and understood the reasoning for the change.

She said: “The Bermuda Health Council held individual consultation meetings with all four insurers, two out of three approved schemes, the Association of Bermuda Insurers and Reinsurers, and the Association of Bermuda International Companies.

“Stakeholders do not object to the proposed fee increases; they found the level and the logic of the fee increase acceptable assuming corresponding health insurance premium decreases, sustainable health system savings, and care delivery improvements.

“This amendment provides for licensing fees for health insurers and approved schemes to be aligned to the total premiums collected, with more rigorous scrutiny and onerous requirements applied where material amounts of business are transacted with respect to health insurance claims.”

The legislation also expanded Mutual Reinsurance Fund Coverage by changing “haemodialysis” to “dialysis”, in a bid to fix what Ms Caesar said was an error.

She told the Senate: “Covering all dialysis is crucial as research confirms that people with end-stage renal disease live longer and have more productive lives if they are able to access peritoneal dialysis before transplantation or starting haemodialysis.

“All dialysis was priced out of the Standard Health Benefit and into Mutual Reinsurance Fund.

“Therefore the premium to pay for both haemodialysis and peritoneal dialysis is being collected by the MRF, with no such funds in the SHB premium making it unaffordable for any insurance group with dialysis patients and, in particular, for HIP and FutureCare, which cover 80 per cent of all dialysis patients in Bermuda.”

The Bermuda Health Council said it was “elated” by the passing of the amendment, saying that allowing MRF to cover dialysis will help to increase efficiency and reduce health costs.

The BHC added the increase in licensing fees would help to improve regulatory oversight.

Ricky Brathwaite, director of health economics, said the legislation as a “win” for the island's healthcare system.

Dr Brathwaite said: “The increased funds will be put towards improving quality care, standards and transparency in Bermuda's health system.”

Crystal Caesar (Photograph by Akil Simmons)

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Published December 15, 2017 at 8:00 am (Updated December 14, 2017 at 11:02 pm)

BHC welcomes higher fees for health insurers

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