The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribbunemedia.net

Just 3 per cent of premium income typically goes to health insurers’ profits, Family Guardian’s president revealed, as he warned that National Health Insurance (NHI) could reduce available healthcare benefits.

Lyrone Burrows said Bahamians should not expect to “overnight” realise the same health care benefits coverage under NHI that they currently enjoy with private insurers.

Speaking at a College of the Bahamas NHI panel discussion, Mr Burrows also sought to dismiss the notion of significant healthcare cost savings under the NHI scheme.

“The implementation of National Health Insurance will not overnight provide you with all the benefits you would have gotten with private health coverage,” he warned.

“National Health is a journey. It’s not going to be April 2016 that you are going to be able to drop your private health coverage and get the exact same thing from the Government.

“Canada has been going through this for 65 years. When this plan comes out, what you will be getting initially will be extremely basic. There will still be the need to have supplementary coverage. That coverage, over time and over a considerable period of time, will then begin to fall away as the Government is able to gain sufficient finances to be able to increase the benefits under the National Health plan.”

Mr Burrows added: “During the period when you have a separation of the National Health benefits, however basic that is and you still have the private coverage on a supplementary basis, now you have another issue.

“Currently, when you take out private health insurance you take it out on a comprehensive basis, so they are pricing for all of the items under that coverage. When you now talk about supplementary coverage, what you are really doing would be like going to a banquet and deciding which particular pieces of food you want to try.

“When it comes to health insurance, when you start to pick particular items that you want to buy generally, what that means is that those are the things you anticipate that you would need more of,” he explained.

“When an insurance company gets to the point where you have a lower number of people selecting specific things for coverage, the actual cost of those items is going to escalate substantially. These savings that people anticipate they are going to get because they have the National Health plan, which is lower, will be eroded from the fact that these other supplementary coverages are going to go up in prices. What you will end up having is the same net position you were at before under comprehensive private coverage.”

Mr Burrows, said 75 cents of every $1 paid in health insurance premiums is actually paid out in claims, and only 3 cents is budgeted towards profits for the insurers.

He added that there are currently seven life and health insurance companies registered to operate in the Bahamas, and which collect $270 million in health insurance premiums annually - paying around $8 million of that in taxes to the Government.

Mr Burrows said 115,000 Bahamians have health insurance coverage through private plans, with civil servants accounting for another 62,000 persons covered. Still, he noted that 50 per cent of this nation’s population has no health coverage.

Mr Burrows said the Bahamas Insurance Association (BIA) has serious concerns over the figures produced by Sanigest, the Government’s NHI consultant.

“The BIA pooled its data and determined that, at minimum, the cost to implement the expanded benefits package would approximate $965 million,” he said.

“This is a whopping $295 million difference from that of Sanigest.”