The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The proposed National Health Insurance (NHI) model could “put private insurers out of business” unless the Government’s cost estimates are accurate, the Bahamas Insurance Association’s (BIA) chairman has warned.

Emmanuel Komolafe told Tribune Business that existing health insurance companies will become ‘administrators’, rather than risk underwriters, under the Christie administration’s NHI model.

And, instead of receiving premium payments from their group and individual clients, the insurers will be given a funding ‘allocation’ from the Government’s National Health Insurance Commission (NHIC).

This allocation will be based on the size of each insurer’s ‘NHI population’, and their perceived health risks, but Mr Komolafe warned that carriers might be placed in a financial bind if claims payouts exceed their ‘allocation’.

“Under the proposed model as we understand it, the private insurers that participate are being called Regulated Health Administrators (RHAs),” Mr Komolafe told Tribune Business, “basically, administrators on behalf of the Government.

“They will get a distribution from the Government based on what population they have. And that’s why costing becomes very important.

“If we don’t get the costing right, and have certain amounts allocated per person, if the [patient] outcomes are worse than expected, the allocation will be less than the amounts paid out. That could put insurers out of business.”

Mr Komolafe told Tribune Business that the insurance industry discussed these concerns with the NHI Secretariat and implementation team several months ago, but obtained no satisfactory answers.

“What if the actuarial experience is worse than expected, if claims are worse than expected?” he queried. “We were told there’s a process whereby you apply to get a refund or some extra allocation [from the Government].

“All of that is still not clear on how that will work. Say you’re $5 million over. You’re now waiting on a Government committee, and we’re not sure how that will be estimated and assessed, what they will check to verify it, and the time they will take.”

Hence the need, from the Bahamian health underwriter’s perspective, to ensure that NHI costings and patient usage rates are accurate from the get-go, so they are not left ‘out of pocket’.

Mr Komolafe, meanwhile, added that risk adjustments for pre-existing illnesses and age was another area where the insurance industry had been unable to obtain clarity from the Government.

“There was some talk of risk adjustment from the primary care side, and how do we manage that,” he added. “All of these are details we have been trying to get down to for the last several months, but it’s not clear how that works.”

Mr Komolafe also said the ‘distributions’ insurers will receive from the NHI Commission are “not premiums in the strictest sense” because the companies are no longer underwriting the risk

Mr Komolafe previously told this newspaper that it was impossible for the Government and its consultants, PricewaterhouseCoopers (PwC) and Sanigest Internacional, to come up with an accurate costing for NHI because the private health insurance industry had yet to provide them with its claims data.

With private health insurance accounting for between 30-50 per cent of Bahamian healthcare expenditures, the BIA chairman said the sector wanted to supply its data to the Government so NHI’s costs could at least be accurate.

This, though, continues to be delayed by the Government taking its time over signing a Non-Disclosure Agreement (NDA) governing how the information is used.

Mr Komolafe, speaking to Tribune Business in his more recent interview, said: “We want to give them the data, but nothing has been transferred because the NDA has not been finalised.

“It’s not because the industry does not want to help them; it’s because they’ve not agreed and signed the NDA.”