Health insurance premiums increase from April 1
Health insurance premiums could go up by almost $40 a month to help cover back pay for hospital staff, MPs heard yesterday.
Kim Wilson said that the standard premium rate — the government-set portion of premiums — will rise to $439.55 from April 1.
The health minister explained that the rise was necessary in light of retroactive payments totalling $38 million being made to hospital staff as a result of salary negotiations.
She told the House of Assembly that the SPR — a mandatory, government-run feature of all health insurance coverage across the island — was last increased on November 1, 2021, when it was set at $400.31 per customer, per month.
The figure has remained unchanged since then.
Ms Wilson said: “Across the world, medical inflation continues to rise. It affects the cost of clinical care, medical equipment, pharmaceuticals and hospital operations.
“Bermuda is not immune to these pressures. In addition, the Bermuda Hospitals Board recently concluded negotiations with the Bermuda Public Services Union representing unionised hospital staff.
“Those negotiations resulted in a salary uplift of 18.23 per cent, along with a cost-of-living allowance, covering the period April 2022 through October 2025.
“As a result, retroactive payments totalling $38 million were owed to staff who have continued to provide essential services during that time.”
She added: “These retroactive payments will be issued in two equal instalments, the first was paid on January 30 and the second by April 30 2026, in accordance with the negotiated agreement.
“While $19 million has already been set aside, the remaining funding requirement must be supported through a combination of government reprioritisation and an adjustment to the standard premium rate.
“Following an independent actuarial review, it has been determined that an increase of $39.24 per member per month is necessary to maintain the financial integrity of Bermuda’s health financing system.”
Ms Wilson said: “This decision is not taken lightly. However, it is necessary.
“The adjustment is driven primarily by the funding requirements within the mutual reinsurance fund.
“The mutual reinsurance fund is a cornerstone of Bermuda’s health system.
“It supports high cost and hospital-based services and ensures that risk is shared broadly across the population.
“It is what allows essential treatment to remain available when individuals face catastrophic illness or complex medical need.
“If the fund is not stable, the system cannot remain stable.”
A statement released by the Ministry of Health clarified that the standard premium rate adjustment represents an average annual increase of about 2.1 per cent since the rate was last set in November 2021.
It added that half of the $38 million in back-pay salary obligations for Bermuda Hospitals Board staff was provided by the consolidated fund.
The remaining $19 million will be generated through the SPR increase.
“If the Government did not put forward the $19 million, the SPR adjustment would have been twice as much to cover the increased costs from the hospital pay agreement,” the ministry said.
Kim Wilson, the health minister, added: “Due to stronger-than-anticipated tax revenues from the introduction of the corporate income tax, the Government was able to shield policyholders from bearing the full cost of the recent pay agreement at the hospital.
“As indicated in the 2025 Budget, an inflation-level adjustment to the SPR was anticipated; however, we were able to keep the increase below the rate of inflation.
“We recognise that any adjustment presents challenges but the Government has worked to ensure that the change is measured and reasonable, while continuing to support our healthcare workers.”
Residents were warned of the health insurance premiums increase last December but there was no figure for the increase then.
Ms Wilson said today: “The standard premium rate forms part of the premium structure across health insurance policies in Bermuda.
“As such, this adjustment may be reflected in both public and private insurance premiums.
“For clarity, the $39.24 per member per month represents the increase directly associated with this policy decision and the funding needs of the mutual reinsurance fund.
“Any additional premium adjustments would reflect insurer-specific decisions and should be discussed directly with those providers.”
She added that the SPR increase would not apply to people on the Government’s FutureCare plan — many of whom are seniors and may be on fixed incomes.
The minister said: “The adjustment to the standard premium rate is a necessary step to support the sustainability of hospital services and ensure that Bermuda’s healthcare system continues to function for the benefit of our people.
“Our duty is not only to manage today’s costs, but to safeguard the system on which every Bermudian may one day depend.”
Craig Cannonier, the shadow health minister, asked whether there was a plan to raise the SPR incrementally in the future or if the upcoming increase would be the only one for the next few years.
Ms Wilson noted that there was a school of thought that suggested annual increases should take place based on modelling and use of services but added that it was “hard to say” whether that approach would be adopted.
She added: “If utilisation drops, which is unlikely, then so would the anticipated modelling but … healthcare inflation normally runs at 10 per cent per year.”
• To see the minister’s statement in full, see Related Media
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