Health insurance companies are currently researching the impact of proposals to reform the industry according to an executive.

Argus Group's Chief Executive Officer Gerald Simons said his company has six people looking at the proposals made in the Bermuda Health Council (BHeC) report. He added that other companies were doing the same. In early July the BHeC released a consultation paper recommending how the regulatory framework for private health insurance companies could be enhanced. Suggestions included creating a more "robust" Standard Hospital Benefit and requiring all private insurers to provide the same basic package at the same price to everyone regardless of age or pre-existing condition. The aim is to ensure everyone in Bermuda has access to basic health care.

What these proposals mean for the industry, and the price of premiums, is still not clear Mr. Simons told The Royal Gazette. The private health companies have yet to sit down with the BHeC, but he said they were looking forward to the consultation process. "Some of the proposals in its consultation paper, such as transparency and fairness in dealing with policyholders and paying claims quickly, we fully support," he said. "Others will require considerable analysis and study."

Mr. Simons said health insurance has become a more hot button topic for a variety of reasons including the state of the economy, an ageing population and health inflation.

In 1971 the Health Insurance Act passed requiring employers to provide a minimum level of health insurance to their employees, known as the Standard Hospital Benefit (SHB). This covers public ward hospital care, certain outpatient services such as laboratory tests, the ambulance service and care at the mental hospital. The first year it was implemented the SHB cost approximately eight dollars a month, half of which was paid by employers.

Last year the SHB increased by 13 percent to $236. This increase happened at the same time many industries were implementing wage freezes as a result of the recession, the increase of the SHB happened at the same time taxes such as payroll increased. Thus, people were paying out more for insurance while they were earning less. Government's subsidised comprehensive health insurance scheme for seniors, FutureCare, has also drawn more focus to the issue.

Argus insures 22 percent of Bermuda's elderly population while FutureCare covers 33 percent according to statistics released in May. Government's scheme sees eligible seniors pay between $300 and $600 for comprehensive health coverage. In private companies they would be required to pay more for similar coverage. Statistics show that the majority of claims an individual makes are made within the last few years of life. Members of the Opposition have said the current state of FutureCare is unsustainable and will seriously undermine Bermuda's financial stability.

In addition Bermuda is starting to see the impact of health inflation. For years Bermuda's thriving economy meant increases in health costs were absorbed because people were earning more. However, now it has caught up and Bermuda is experiencing what other Western countries have for the last decade. Much of the increase in health care expenditure is due to factors such as increasing consumer expectations and greater utilisation of services. Bermuda's use of tertiary care in top US hospitals has also driven up costs, last year the cost grew by 40 percent.

Over the coming months as the consultation process begins between private insurers and the Government many of these issues will come to the forefront. "What is important is we get it right," he said. "Our company helped the policyholders of British American after the company went bankrupt and we would not want that for anyone else.".