The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s assumptions about National Health Insurance’s (NHI) impact on private insurers are “misplaced, unrealistic and disconnected from reality”, it has been warned, amid fears it is mounting a “hostile takeover” of the sector.

Rhonda Chipman-Johnson, the Bahamas Insurance Association’s (BIA) co-ordinator, told the Ministry of Health’s permanent secretary via a July 27 letter that his previous correspondence had “done nothing to allay” private health insurers’ concerns that they will have little to no role under the NHI model proposed by the Government and its consultants.

She told Marco Rolle that the Government’s conclusions about NHI’s likely impact on private health insurers was “flawed”, and showed “a total lack of understanding of the industry” via contradictory statements in his July 25 letter.

Ms Chipman-Johnson also pleaded that the BIA, and those it represents, be given until end-August 2015 to respond to NHI’s proposed Vital Benefits Package and the new primary healthcare model it would impose.

The Government initially gave the Bahamian insurance industry just six days to review these proposals, seeking a response by July 24 despite providing the sector with the relevant documents just six days earlier.

Mr Rolle, in a communication seen by Tribune Business, gave the insurance industry until next Friday, August 7, to respond.

“With regard to your request to extend the period for consultation, regrettably the timelines are very short, as we must keep to our implementation plan,” Mr Rolle said.

“We realise that the proposed timeframe is ambitious. However, we believe there is no perfect timing or mechanism to launch national health......”

In response, Ms Chipman-Johnson said that while the BIA appreciated the extra two weeks’ to provide feedback, “this time period is simply insufficient”.

“The BIA has patiently waited for almost a year to be provided with the proposed benefits package, while the Ministry of Health and Sanigest have developed the package in isolation without any input from the BIA,” Ms Chipman-Johnson wrote.

“It is only fitting therefore that the length of the consultation period is in line with international best practice, and takes into account the magnitude of universal health coverage in the Bahamian context and the serious consequences it has for the private health insurance sector.”

Outlining the Government’s vision for the role played by private health insurance underwriters, such as Colina, Family Guardian and Atlantic Medical, under NHI, Mr Rolle pledged that consumers would still be able to choose their insurer and policy type while being protected from “financial ruin”.

He explained that both private health insurers, and “the public health insurer”, would offer the Vital Benefits Package - the core, basic benefits under NHI.

“Given the multi-payor design, disruption to private health insurance employment will be minimal, and all actors currently in the system will have opportunities in the new universal system,” Mr Rolle argued.

With NHI expanding coverage to 100 per cent of the population, Mr Rolle said private health underwriters would enjoy increased opportunities to sell supplemental insurance policies.

Transaction costs would fall from selling the Vital Benefits Package, he added, while the value of the private health insurance market would increase, creating more sector employment.

“The current size of the private health insurance market is estimated to be approximately $270 million,” Mr Rolle wrote. “Under the full benefits package, NHI is estimated to cost $400 million.

“Assuming the private health insurance companies receiving at 75 per cent market share, that would raise the value of just the NHI policies being insured through private health insurance companies to $300 million - on top of which would be the supplemental insurance market.”

Mr Rolle said the NHI benefits package would be rolled out gradually, and the scheme would enable private health insurers to develop plans with “higher margins” by taking “most of the financial burden” on itself.

In response, Ms Chipman-Johnson expressed on the BIA’s behalf particular unease about the creation of a ‘public health insurer’ that would compete with, and potentially replace, the private sector.

“We would also like to state that the BIA strongly opposes the establishment of a public (government-owned) insurance company and the hostile takeover of our industry,” she warned.

“The content of your letter does nothing to allay the concerns of the BIA and our members that there will be a viable role for the private health insurance sector under the universal health coverage model proposed by the Ministry of Health and Sanigest.

“The details provided to us on the approved hybrid, multi-payor model and the establishment of a public health insurer further confirms the intention of the Government to nationalise the private sector. The proposed framework effectively transforms private health insurance companies into administrators for the Government.”

Ms Chipman-Johnson pointed to “contradictory” statements in Mr Rolle’s letter, where he initially said there would be “minimal disruption” to private health insurance employment, only to several paragraphs later suggest jobs would increase.

“It is our view that your assumptions are misplaced, unrealistic and disconnected from reality,” the BIA co-ordinator said.

“Additionally, your subsequent conclusions on the impact on the private insurance market are flawed and demonstrate a total lack of understanding of the insurance industry in the Bahamas.”

Ms Chipman-Johnson also called on the Ministry of Health to detail what benefits packages would be rolled out when, and how, given that this was “extremely important” to private sector planning.