New basic insurance plan in place

A new version of the standard health insurance contract comes into effect from Friday, 1 March. 

The new standard contract, known as SHIC, will form the base for all other health insurance plans, meaning that people on more expensive and extensive plans will also see a rise in the cost of their premiums. 

Health insurance policies that are renewed over the next year will be impacted by the changes to the SHIC plan. 

Health minister Mark Scotland admitted that the changes to the SHIC plans will mean that people on those plans will be paying higher premiums, but said that the additional benefits would be worth the increased monthly cost of the plan. 

While the premium and benefit increases will come into effect upon the renewal of health insurance plans, from 1 March, insurance policy holders will see at least a $5 increase on their current contracts to help offset some of the cost government spends on healthcare for indigents – people without healthcare coverage. Those contributions will be added to the Segregated Medical Fund, which helps pay for indigents’ medical bills. The contribution for indigent care is doubling from $5 to $10 for individual plans and from $10 to $20 for family plans. 

Almost one-fifth of the Cayman Islands government’s budget goes towards healthcare costs. Of that amount, 22 per cent is spent on indigent care – about $20 million a year. The Health Insurance Commission currently collects about $2.4 million a year from the individual and family plan contribution. That amount will double to about $5 million a year under the amended law. 

Mr. Scotland said he had already started receiving concerned calls from members of the public who had been informed by their insurance companies that their premiums were going up. Referring to one case where a caller said the premium was going up by 40 per cent, he said he urged he caller to “read over what the new benefits are because the benefits are really commensurate with the increase in premium, which is split between the employer and employee”. 

“We are cognisant of the fact that this comes at a time when it’s difficult financially. We could delay it and delay it, but we believe the insured population deserves an improved benefits plan so they can be paying for a health insurance plan that is useful to them and is beneficial.  

“When you talk about $25,000 hospitalisation benefit now for most conditions and procedures, you have people not accessing healthcare because the benefits of the plan are not adequate and people are putting off procedures because of that. That is prolonging and procrastinating and delaying healthcare costs that will grow and grow. If you put off a procedure and wait six months or a year, it will ultimately cost more and you’ll be in a much more serious condition later on, from a health perspective,” he said. 

Under the existing regulations, the SHIC contract covers only $25,000 per episode of illness, a stipulation which has been removed in the revised version. The new version retains benefits of $100,000 per year in medical fees and $1 million during the lifetime of the policy. 

The amended SHIC plan will cover 80 per cent of $400 for doctor office visits, radiology and laboratory work for diagnostics and physiotherapy with physician referral, compared to the current benefit is just $100 per year for those services. 

The new SHIC plan will also cover wellness benefits, including routine physicals, annual exams, nutrition counselling and one dental examination, up to 80 per cent of $200 per year. There was no provision for wellness benefits is the previous plan. 

Other items that are covered include 80 per cent to the coinsurance maximum and thereafter 100 per cent up to $25,000 per lifetime for inpatient mental health care and 100 per cent of the first $4,000 outpatient services for emergency medical care, including medication and ambulance provision, and then as per applicable benefit category. Air ambulance use is also fully covered up to $15,000 per annum, based on medical necessity. 

While the government regulates the SHIC plans, it does not regulate other plans offered by insurance companies, but Mr. Scotland said stronger regulation of other plans may come eventually. 

“People might say it should be regulated, and probably so. I think our next step will be towards more regulation. Right now, we only regulate the standard plan but we probably should look at more regulation across health insurance in general,” he said. 

The health insurance law’s regulations apparently will make it more difficult for an insurance company to turn down applicants with pre-existing conditions or to refuse to insure a person on any grounds. 

A health insurer will have to present a case to the Health Insurance Commission if it wants to refuse to insure an individual. Prior to 1 March, if two insurance companies turned down a person for coverage, that person would be deemed uninsurable and would then be liable to be covered under the government’s Cayman Islands National Insurance Company, with their premiums paid for out of the public purse. 

Under the revised law, a private insurer must give a reason to the Health Insurance Commission why a person seeking insurance coverage has been turned down. The insurance company will have the option of covering a high risk individual at an elevated premium for the SHIC plan, but if the premium increases by more than 200 per cent from the standard cost, the insurer must get the approval of the Health Insurance Commission. The commission will have final say on both matters. 

Mr. Scotland said the number of people in the Cayman Islands who have health insurance continues to increase and as of last month, there were more than 50,000 people with insurance. “It shows that even in austere times, people are keeping their health insurance. If you add to that the number of indigents, which is about 1,000, we’re talking about 2,000, or 4 per cent, of our population without health insurance. Having a law that is 96 per cent compliant – that’s a fairly high number,” the minister said. 

The Cayman Islands has had mandatory health coverage for all employees since 1997.  

Of those 2,000 or so who are without insurance for a variety of reasons, those who do not have insurance because an insurance company has refused to insure them may be covered under the amended regulations. “In terms of the numbers of uninsurables, and the number would not be all that 4 per cent, but with the new amendment, the ability for insurers to deem you high risk or uninsurable becomes a lot more difficult, so the number should go down,” Minister Scotland said. Under the new regulation, employers must offer health insurance coverage to employees for up to three months after they leave their job or for a shorter term if those employees are employed, and therefore insured, elsewhere in the meantime. 

The amendments also bring higher fines for employers who make unlawful deductions for health insurance from their employees.  

Under the law, the Health Insurance Commission will have the authority to enforce administrative fines on insurance companies that do not comply with the Health Insurance Law. 

The regulations were passed into law in the Legislative Assembly in September last year. 

Almost one-fifth of the Cayman Islands government’s budget goes towards healthcare costs. 

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