Taxpayers’ bill doubles to insure retired civil servants

Healthcare premiums revealed

Cayman Islands taxpayers are footing nearly double the bill for retired civil servants when it comes to paying for health insurance premiums, the Cayman Compass has learned.  

According to rates provided to the newspaper as part of a recent Freedom of Information request, retired pensioner rates under the Cayman Islands National Insurance Company plans go from $870 per month for non-married individuals, to $1,306 per month for non-married people with children, to $1,741 per month for married couples, and finally to $2,176 per month for the CINICO family plan.  

Similar rates for working civil servants are $416 per month for single adults, $832 per month for married couples, $832 per month also for single adults with children, and $1,242 per month for families.  

The reason retiree premium rates are so much higher, according to CINICO chief executive Lonny Tibbetts, is because insurance companies generally place retirees in “higher risk” categories for medical treatment.  

Both civil service plans under CINICO have a $5 million maximum “lifetime limit” for healthcare coverage. There are no limits on prescription drug purchases, in-patient or outpatient care. Overseas accommodations and airfare, if the covered government worker or retiree must fly elsewhere to obtain treatment, are covered 100 percent.  

Also, neither retired civil servants or active government workers are required to make co-payments, so the monthly premiums are funded entirely by the government.  

According to an auditor general’s report released Tuesday, the government spent between $25 million and $29 million per year between 2010 and 2012 in up-front operating costs to support the government-owned Health Services Authority, which operates both Cayman Islands public hospitals, local health clinics and the George Town dental clinic.  

In addition, provision of healthcare at overseas providers has cost the Cayman Islands government between $15 million and $17 million per year in each of the last three government budget years.  

A government consultant’s report released earlier this year recommended a number of options to bolster the finances of the Cayman Islands’ public health system, including a requirement that civil servants shoulder at least some of the cost of healthcare premiums.  

“Under this option, government employees will need to co-pay for their medical insurance,” the Ernst & Young evaluation stated.  

The report also noted that CINICO is often the insurer of last resort, covering all residents in the Cayman Islands who are not offered medical insurance by private companies. In the view of CINICO staff, this allows the private sector to “cherry pick” low-risk healthcare clients while the government health system is forced to take everyone else.  

The EY report noted that there would be “significant pushback” on any proposal to require civil servants to co-pay for insurance coverage.  

Cayman Islands Civil Service Association President James Watler has maintained that civil servants might not object to paying their share of healthcare costs, but that they would likely want greater choice in medical providers.  

Now, individuals covered by the CINICO health plan can use only government medical facilities. Most private doctors and medical clinics do not accept CINICO insurance.  

Various government leaders and officials have noted in public statements over the years that “free” healthcare for civil servants is unsustainable. Former Health Minister Anthony Eden used that exact word in the Legislative Assembly during a 2009 debate. In 2011, Health Services Authority chief executive Lizzette Yearwood said some discussions were under way aimed at lowering CINICO’s costs.  

“We cannot continue the way we are going; we have to do something,” Ms. Yearwood said at the time.  

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  1. For too long the government has allowed the locally operated private health insurance providers to run what is essentially a ponzi scheme in the Cayman Islands where they cover people during the years when they are less likely to need significant medical services and not cover them when they are high risk or once they get to an age where they will need more frequent access to medical care.

    The currently retired civil servants have earned and are entitled to the benefits that they currently receive from government. These benefits were, for the most part, included as part of their employment package and the government needs to honor their commitment to these individuals.

    Going forward, the government should look at both the co-pay model and the possibility of a national insurance scheme.

  2. This is so funny but it seems people are oblivious. Why don’t we get rid of insurance companies . Sell the hospital and get medical care at a much better price. Gov’t is stuck with the bill . Then instead of paying insurance go back to what we had before. Free medical, dental and eyecare.
    The whole of Latin America is not paying this kind of money for medical treatment. Our new hospital in East End has better medical doctors and state of the art surgery . Why don’t we all go with them since they are a lot cheaper.
    If not them ,Cuba or Panama, Why do we always take the most expensive way out.
    No one in Cayman would pay these kinds of premiums, its ridiculous.
    When one thinks how long we have paid for insurance premiums and not use them except for an occasional cold, flu. How much money they have collected and not used for medical care? Could we look at a company who cherry pick and see how much they have collected and paid out? We are not getting value for money.

  3. It seems to me the facts and the rhetoric don’t agree. The govt brought in legislation in 2013 to force insurers to a) cover all local residents (that would include member of groups and individuals) and b) once these people are on cover they are not allowed to reduce benefits as one gets older. There are also rules around what conditions one can exclude and/or the price they can charge. The problem from my experience is the Health Insurance Commission seems to use the enforcement of these rules sparingly and seems to have its preferred insurers to whom the rules don’t seem to apply. Try and get cover from Generali and they will tell you they only cover big groups, which is against the Law as far as I can tell.

  4. Sadly, this is only going to be the tip of the iceberg that could well sink the country.

    I agree that the retired civil servants should have some support from us.

    I disagree to the extent of what is in place now.

    In 2004 Shaw Miller indicated that the total bill to cover retired civil servants was estimated to be 665m. Using a medical inflation rate that is lower than what is actually happening in the US that amount in 2014 grows to 1.1b and likely we will have to pay that out over 30-40 years.

    This bodes three thoughts: 1. How many people does that cover anyway? 2. Wasn’t the great expansion of the civil service not occur AFTER 2004? 3. How much have we set aside to pay for this upcoming crippling expense? Not one dime.

    This is the single greatest threat to the viability of the country, yet few even know about this or are talking about it.

    Good work Compass, we need to bring this out into the open so we can get a handle on it, and start preparing.

    Folks we have not seen anything yet.