On our return home ten days ago, we were greeted by the Compass headline ‘Ridley: No obvious benefit to CINICO’.
What followed was an account of The Cayman Islands Monetary authority Chairman, Tim Ridley’s address to a luncheon as part of the Insurance Week’s events.
I entirely agree with Mr Ridley in his assessment of CINICO’s position. The original formation of CINICO was well intentioned. But it will always require heavy Government subsidy in its present form.
As long as the client base consists of only the high risk portion of our population, it will continue to lose large amounts of money on a regular basis.
To quote Mr Ridley, the current health insurance position in the Cayman Islands is ‘unsatisfactory, costly and inefficient’. It certainly is. However, like anything broken, it can be repaired. And in this case that can be achieved without any undue expense.
Last month I received information I had requested from an insurer with whom I was associated for sixteen years. As a matter of course, they separate health claims by age group. The 2006 claims utilisation for those over 60 years of age was 4.7 times that of those under 40. They were also able to say that a large group consisting only of those over the age of 60 had a claims ratio of more than three times that of a group made up of all ages.
What does that tell us? CINICO can therefore not only break even, but increase its benefits substantially without raising premiums. How? Let CINICO provide standard health insurance benefits to the entire population. It then insures the young and the old and its claims ratios drop dramatically.
Insurance companies would no longer have the ability to pick and choose only the good risks leaving the rest for Government. Everyone would be guaranteed full coverage. Problems such as portability of benefits would be eliminated.
It will be necessary for CINICO to expand considerably. That expansion should include a local claims department. The cost of this would actuarially be calculated as part of the premium and not be an expense to Government. This would ensure the hospital and local providers are paid promptly.
Having spent more than twenty years in the group health business, let me assure you it is profitable. CINICO does not seek to make a profit and this fact also would lead to higher benefits or lower premiums for everyone.
Civil servants and those others who Government now provides benefits would not lose any cover at all. Premiums would be paid on their behalf. Those premiums would be far less an expense to Government than providing benefits through CINICO today.
Mr Ridley, you have hit the nail on the head. Overhaul the present health care system in the Cayman Islands. Obtain IMPARTIAL professional and actuarial advice. The benefit to our community would be immeasurable.
J.W. ‘Bill’ Rewalt
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