The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s push to implement National Health Insurance (NHI) by January 2016 is “discomfiting” to the private sector because most of the key details are still unknown, Tribune Business was told yesterday.

Derek Osborne, chair of the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) newly-formed NHI review committee, said the absence of firm specifics on the scheme made it difficult to currently predict whether the Bahamian economy can absorb it.

“It’s certainly concerning that there’s talk about implementation in January without many of the details yet being shared with the stakeholders,” Mr Osborne told Tribune Business.

“The Chamber is at the table with the [NHI] advisory committee, but most of the details have not been forthcoming. It’s discomfiting that January 1 is being spoken about as the implementation date when many things are unknown or still being worked on. Many, many things have to be decided.”

The only ‘known’ element to-date is the vague comment by Dr Perry Gomez, minister of health, that NHI will be financed through unspecified taxation.

The first version of the NHI plan proposed that it be paid for via increased National Insurance Board (NIB) contributions. The increase was then pegged at 5.3 per cent, split 50/50 between employer and employee, meaning NIB contribution rates would have increased by 2.65 percentage points.

That, though, was when the NHI scheme was forecast to cost $235 million. The Government’s forecasts now suggest implementation of a fully-fledged plan in ‘one shot’ will cost between $500-$650 million.

The key for the business community is to find out how much NHI is projected to cost, how it will be financed, and how much they and their employees will have to pay as a result.

The longer the ‘information vacuum’ and uncertainty persists, the greater the impact on individual companies and the economy, as firms will likely postpone any investment/expansion plans and new hires.

This is also taking place against a backdrop of improving, but mixed, economic signals, with the positives from Baha Mar’s opening and other investment projects, plus reduced global oil prices, being countered by Value-Added Tax (VAT), NHI’s looming shadow and structural problems with the Bahamian economy.

Mr Osborne, who was formerly the National Insurance Board’s (NIB) in-house actuary, told Tribune Business that he was “on the other side” under the first Christie administration, helping to craft the first proposal.

Pointing out that the NHI team had “acknowledged” many details had yet to be pinned down, Mr Osborne said issues to be determined were whether the scheme should be implemented in ‘one shot’; if the benefits package would be small initially; and whether there would be any “ceiling” on taxation contributions.

And Mr Osborne said it was not a certainty that the tax burden faced by working Bahamians and companies would be greater, as there were “many ways of financing NHI”.

He added that the funding could come from a payroll tax or general taxation, for example, while the Government might also reduce other taxes to compensate.

“There’s too many unknowns for us to make an informed decision as to whether it will hurt businesses, hurt the economy, at this time. It’s really too early to tell,” Mr Osborne told Tribune Business.