The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian insurance industry has warned the Government that National Health Insurance (NHI) costs will be “more than double” the suggested $400 million, adding that the scheme’s implementation as-is will have “consequences of catastrophic proportions”.

The Bahamas Insurance Association (BIA), in a July 27 letter to the Ministry of Health’s permanent secretary, Marco Rolle, said it came up with an annual NHI cost of $947.3 million by using the Government’s own healthcare example of Aruba.

Mr Rolle, in a July 25 letter to the BIA, suggested it look at Aruba as a model of a jurisdiction with similar per capita spending and a universal health care system with more generous benefits than those proposed under NHI,

Taking him at his word, the BIA obtained data from a presentation by Aruba’s chief medical officer that showed 2012 healthcare system spending was equivalent to $197.4 million in US dollar terms.

Given that the Bahamas’ population is 3.6 times’ greater than Aruba’s, Rhonda Chipman-Johnson, the BIA’s co-ordinator, told Mr Rolle that multiplying the $197.4 million by this figure meant “we in the Bahamas should expect annual healthcare expenditure of approximately $713.8 million”.

And, taking the National Insurance Board’s (NIB) administrative costs as a percentage of contribution income, 24.65 per cent, the BIA came up with $947.3 million as the total annual healthcare expenditure under NHI.

This figure falls in the middle of the BIA’s previous $895 million to $965 million cost estimates for NHI.

“The Aruban experience seems to support the BIA’s contention that NHI in the Bahamas, based as it is on a comprehensive set of benefits with limited cost sharing and delivered in part by a public insurer, will cost more than double the $400 million cost estimate stated in your letter,” Ms Chipman-Johnson told Mr Rolle on the BIA’s behalf.

She added that other consultants hired by the Government had described the proposed NHI benefits package as too generous, and added: “This makes it unaffordable and unsustainable.

“When this is considered in the context of the current state of the Bahamian economy, we submit that the implementation of universal health coverage as proposed by the Ministry of Health/Sanigest would have consequences of catastrophic proportions for the Bahamas.”

Mr Rolle, in his July 25 letter to the BIA, had expressed optimism that the Government would be able to contain NHI costs based on benefits package design and what had been excluded from coverage.

“The assumptions used differ significantly from your assumptions regarding private health insurance rates and rules, as the Vital Benefits package will be delivered under very different conditions,” Mr Rolle wrote.

This drew a scathing response from Ms Chipman-Johnson and the BIA, who referring to the Government’s Costa Rican consultants, said: “We maintain that the costing conducted by Sanigest is actuarially invalid and grossly underestimated.

“Our position is supported by real claims data, our review of the proposed exclusions and the lack of specific details and evidence on how healthcare costs will be reduced in the Bahamas.”

Ms Chipman-Johnson pointed to the House of Assembly communication by Dr Perry Gomez, minister of health, in which he said total healthcare spending - private and public - in the Bahamas was $800 million, without including co-payments and ‘out-of-pocket’ expenses.

“The costs expressed in your communication are totally out of line and completely unrealistic,” the BIA co-ordinator warned. “It is time that the Government got real and stopped playing politics with this most vital of all social programmes intended to be placed upon the Bahamian public.”