The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The proposed National Health Insurance (NHI) scheme will “create enormous savings for firms of all sizes”, the plan’s consultants tout in their October 2014 report to the Christie administration.

Sanigest Internacional uses a model employing three different wage levels, two different NHI contribution rates and three different private health insurance packages to come up with a conclusion that the scheme will result in reduced employee healthcare spending “in most cases”.

Its report, which presents six different scenarios for low, middle and high income wage earners, projects that NHI will deliver healthcare savings per worker ranging from $280 to $2,970 per year when compared to private health insurance.

“The savings per worker can create enormous savings for firms of all sizes, while in most cases reducing employee health spending,” the Sanigest report suggests.

“For example, taking an average worker with middle income with basic private health insurance, at a 5 per cent National Health Insurance [contribution] rate will yield $1,200 in yearly savings per employee for the company.

“If the firm was a medium-sized business, which averages 50 employed workers, it could save $60,000 a year, while a large firm with 200 employees could save almost a quarter of a million dollars. Additionally, in a scenario where an employer has a comprehensive plan now, the savings are much greater at $2,700 per employee per year.”

Many in both the private sector and health insurance industries are likely to be unconvinced by the Sanigest comparisons and analysis, and its suggestion that companies will realise savings by modifying their group health insurance plans in favour of NHI.

How the private heath insurance industry will fit in with NHI is one of the many as-yet unanswered questions, especially since the scheme - which has a $633 million price tag if implemented as a comprehensive package - appears to be nothing less than a government takeover of Bahamian healthcare.

While a payroll tax ranging from 1 per cent to 5 per cent appears to be the NHI financing method favoured by both Sanigest and the Government, the report explores various other revenue-raising options.

Levying a ‘sin tax’ on alcohol and tobacco would, the report estimates, yield some $64.93 million in NHI revenues in 2016, an estimate the report concedes is at the high end. This yield, Sanigest forecasts, will increase to $68 million in 2017 and $71.276 million in 2018, with the increases driven by economic growth.

Another option identified is a tax on auto insurance premiums. With auto accidents the seventh leading cause of male deaths in the Bahamas, Sanigest said healthcare bills associated with these events were likely relatively high.

There were 10,000 motor vehicle accidents reported in the Bahamas in 2013, implying that more than one person was involved in a crash every hour.

Taking the World Health Organisation’s (WHO) estimate that car accidents cost countries between 1-3 per cent of their gross national product (GNP) as a benchmark, Sanigest suggested these cost the Bahamas $90 million in health costs and lost economic productivity.

Levying a 10 per cent premium tax on the estimated $69.404 million in auto insurance premiums forecast for 2016 would provide $6.94 million for the NHI catastrophic insurance fund, the report forecasts.

With the Ministry of Tourism seemingly digging its heels in against increasing the departure tax on stopover visitors, Sanigest estimated that more than $51 million per annum could be raised from an extra $10 levy on cruise ship passengers, assuming a 3 per cent growth in arrivals.

Adding 0.5 per cent, 1 per cent and 1.5 per cent to general insurance premiums was also considered, with annual yields estimated at between $5 million and $7.95 million - similar to the 10 per cent auto tax option.

Sanigest’s report also recommended increasing work permit fees for the estimated 4,000 foreigners hired as domestic helpers by a flat $1,600, something that will generate around $6.5 million annually.

It suggested this was necessary to prevent such workers from becoming a burden to NHI, because their employers - individuals and households - often did not pay National Insurance Board (NIB) contributions on their behalf.