The cost of health insurance is set to rise by three times the rate of inflation as doctors and insurers get a step closer to sealing a deal on medical fees.

Last month both sides agreed a new fee schedule, ending a long row which has seen some patients being billed directly for operations.

The two sides have now agreed rules on how the new system will work and have forwarded it to the Minister of Health for approval.

Health Insurance Association of Bermuda (HIAB) President Gerald Simons said: "Charges for some procedures have gone up, some down.

"But insurers expect to pay ten percent more for procedures.

"We will pass this on to the public. That's the bottom line."

"It will be reflected in the insurance premiums which will take into account some of the increases in the fee schedules."

Permanent Health Secretary Dr. Derrick Binns said the Minister had reviewed the recommendations and passed them on to the Attorney General's chambers to put them into law.

Mr. Simons said premiums would not go up immediately but would likely kick in April or March, although payments to doctors will probably be backdated to January 1.

He said increased use of medical services and rising costs of prescription drugs also helped push up health costs.

He said: "I don't see anything that will cause health care costs to be reduced in the immediate future."

Shadow Health Care spokesman Michael Dunkley was equally pessimistic and blamed Government for shelving reports which had flagged up the problem years ago.

He said the growing elderly population would add to the strain, while new technology was expensive.

Mr. Dunkley said seniors struggled to pay for adequate health insurance. He said: "We need legislative changes to make these things get better."

He said home care should be expanded as the hospital's extended care unit was always full and nursing homes were so run down.

"We need to get people out of hospital and move them to alternative care. The average length of stay in the extended care unit is 426 days."

Skilled care homes which offered more care than nursing homes should be set up to ease pressure on hospital beds, which were very expensive said Mr. Dunkley.

Patients also needed to stop plaguing the hospital with minor problems said Mr. Dunkley.

"The emergency department is not for minor cuts on your leg."

Mr. Dunkley said the shelved Anderson report had answers to rising costs in Bermuda's health care, but had been ignored by a 'do-nothing' Government.

Yesterday, Health Minister Nelson Bascome could not be reached for comment. Dr. Binns said rising premiums were a matter for insurers.

He welcomed the ending of the row between insurers and doctors and the fact that Colonial insurance, who are not part of the HIAB, had also signed up.

To smooth the deal insurers have agreed to provide training in the use of the new code system to doctors and their staff and supply books explaining how it works.

Dr. Binns said: "We are delighted there is agreement. It's been a long process. It's terrific and I also believe this process is going to be one we can use in future."

A committee will review how the new codes work.

The Minister now has powers to decide fee schedules - a law created after the protracted dispute - should things go badly wrong again.