Reserves for the Government's Health Insurance Plan fell 57 percent last year.

Health Minister Walter Roban told the House of Assembly this was because the Health Insurance Department paid off its extensive backlog of claims.

The Department — which included HIP and the controversial FutureCare plan — was the third brief Minister Roban spoke on yesterday during the five hour Ministry of Health Budget debate. He was expected to deliver four briefs but ran out of time.

Yesterday the Opposition thanked Mr. Roban for allowing questions after each brief was completed — something that was agreed upon by Minister Roban and Shadow Health MP Louise Jackson.

In the morning session, after the Health Department brief, Mrs. Jackson said she was "throwing bouquets" at the Ministry and appreciated being given time to ask questions and raise concerns [see page 6].

And Opposition Leader Kim Swan said he too appreciated being given time to speak, particularly as Monday's session in the House saw Premier Ewart Brown speak for all but 30 seconds of the allocated time for the Cabinet Budget.

However, by the end of the day Mrs. Jackson appeared frustrated that the Minister had spent so long reading his briefs and that there was little time to debate FutureCare.

This paper estimates Minister Roban spoke for two-thirds of the five hours the Opposition allocated for Health.

During the Department of Health Insurance brief, Mr. Roban told the House claims rose by $7 million, or 66 percent, while premiums paid by HIP users rose 31 percent to $13.7 million.

"In the summer of 2008, HIP's well documented claims backlog was cleared, with virtually every doctor on the Island receiving substantial payments for arrears claims that in some cases dated back years," Minister Roban said.

"The Ministry of Health made no secret of the fact that it was working diligently to resolve this backlog and to put in place processes and a system to prevent this from occurring again.

"Last year this time, we announced that the financial impact of this substantial accomplishment would not be fully reflected until the end of the fiscal year."

Mr. Roban said the catch-up in claims payments resulted in HIP's loss ratio, the proportion of claims to premium income, to quadruple to nearly 450 percent.

This means that for every dollar in premiums received HIP paid out nearly $4.50 in claims.

"Obviously this is a one-off event that will not be repeated because we will not allow HIP to fall this far behind again," he added.

"Consequently, HIP's reserves have declined some $5.4 million or 57 percent to just over $4 million as at March 31, 2009."

Mr. Roban said HIP's surplus had been artificially inflated in previous years due to the poor claims payment system.

The Ministry has had external actuaries examine the books and give advice on how to ensure HIP is sustainable, he said, and that premiums would reflect that. In 2009 it rose 10 percent to $241.15.

The Department of Health also covers the Hospital Subsidy, which accounts for 47 percent of the Ministry of Health's total $181 million budget.

The subsidy covers a portion of the cost of hospital services for the elderly, homeless and residents under 16 as well as geriatric care and dialysis.

In 2010 it will be allocated $86 million, the same amount it was allocated in 2009, despite the fact that it overran its budget last year by $15 million. It is the fourth year the subsidy has cost more than budgeted for.

In 2009 the subsidy for Bermuda's elderly accounted for $8 million of the $15 million overrun, Minister Roban said this was most likely a result of "increased utilisation".

And speaking of the entire subsidy overrun he said: "This change is largely due to the increase in the Bermuda Hospitals Board fee charges that came into force in April 2008"

With the allotted time for Health drawing to a close Minister Roban moved on to FutureCare, Government's compressive health plan for seniors.

The first phase was implemented last year and saw approximately 30 percent of the Island's seniors eligible to join. At the time the Opposition said it was not going far enough and seniors had been kept in the dark about the eligibility criteria.

Last month it was announced that phase two will see anyone 70 or older eligible and anyone turning 65 this year. The third phase, open April 2010, will see all Bermudian seniors eligible.

Yesterday, Minister Roban estimated that 45 percent of the 5,471 individuals who fall in the phase two age brackets will enrol in the programme. This is because some were already admitted in phase one, are already on HIP or will choose to stay on their private major medical plan.

Minister Roban said the sustainability of FutureCare was very important: "In looking at the premium for phase two we considered the sustainability of the Plan and looked at the total cost of the plan which is approximately $1074 per month or $12,888 per year.

"We also noted that persons who qualify for Financial Assistance will continue to be enrolled in the Plan. This ensures that those with the greatest need continue to receive health insurance coverage.

"When we consider the cost of [private] major medical coverage, the range is in the region of $12,000 — $18,000 per year. Translated, that is a range of $1,000 — $1,500 per month. Both of which are more expensive than the proposed FutureCare premium.

"The Government has also been accused of discrimination against persons 66-69 years of age.

"We have made it known since Budget Day 2009 that FutureCare will be a phased programme. We have looked at the phasing of the plan to meet the greatest need in both coverage and numbers."

With five minutes remaining Mrs. Jackson stood and said it was important the listening public realise she had been left so little time to reply to this section of the Budget, while the Minister had spent 45 minutes discussing it.

"They don't want people to know they cannot afford FutureCare," she said. "It is unaffordable and discriminatory.

"It started with a promise by the Premier for affordable health care for all seniors but now 66-69 years olds cannot have it."

Minister Roban stood on a point of order and said FutureCare had been announced in 2009 as a phased plan.

Mrs. Jackson said the reason it was phased in was because Government could not afford to have everyone join at once, at which point Wayne Furbert, who chaired the debate, struck the gavel marking the end of the debate.

He then suggested that the Opposition would have better used its time if it had kept its questions until all briefs had been read instead of asking them after each brief.

n See tomorrow's Gazette for more on the health debate