The government has pushed back an important one, delaying the enactment of much-needed reforms to public healthcare — namely, making Cayman Islands civil servants pay for some of what they receive — until well after the May 2017 general election. In other words, the Progressives kicked the can down the road for some future administration to deal with.
In doing so, this government has signaled that, when it comes to addressing serious structural problems with public finances, they are content to dabble at the margins.
For those who may wonder what qualifies as a “serious structural problem,” consider consultants’ estimates that, if the Cayman Islands National Insurance Company continues with its current healthcare coverage policies, it will cause the Cayman government to accrue $1.18 billion in liabilities over 20 years — working out to $59 million per year.
To put this in perspective, the $59 million per year required to maintain CINICO’s status quo is more than central government’s combined appropriations, subsidies and “equity injections” (according to the proposed 2015/16 budget) to the following public entities: Cayman Airways, Cayman Turtle Farm, National Housing and Development Trust, Cayman Islands Development Bank, Cayman Islands Monetary Authority, University College of the Cayman Islands, National Roads Authority, Cayman Maritime Authority, CAYS Foundation, ICTA, Electricity Regulatory Authority, Cayman Islands National Museum, Cayman Islands National Gallery, Cayman National Cultural Foundation, Auditors Oversight Authority, National Drug Council, Sister Islands Affordable Housing Corporation and Tourism Attraction Board — in short, all of government’s authorities and companies that are not related to healthcare.
The issue of civil servants, their families, pensioners, indigents and others not having to pay for their CINICO plans is only one single tentacle of the healthcare monstrosity that government has created.
Other arms include the rapid accumulation of “bad debts” owed to the Health Service Authority (now approaching $80 million), the multiple lawsuits filed against CINICO for failing to make payments owed to U.S. hospitals, as well as the scandal involving the government’s CarePay contract, which, though simmering silently for some time now, possesses the most potential to boil over, messily, onto the international stage.
If someone were to conduct a study of political entities that have “failed,” be they countries or large municipalities, a familiar pattern would emerge: Empowered by organization and sheer numbers, public sector employees are able to negotiate concessions and benefits from government leaders that have no parallel in the private sector. Wary of challenging the might and muscle of a united civil service voting bloc, transitory elected officials, in turn, delay the enactment of meaningful (and painful) reforms, leaving it to some future government to clean up the mounting fiscal detritus.
We are seeing a version of this play out in Cayman, particularly in regard to public healthcare and public pensions, which are a class apart from other fiscal concerns, such as subsidies (to ensure an adequate supply of turtle meat, for example), pressing capital projects (i.e., the dump), or even massive, but scheduled, debt payments (for the more than half-a-billion dollars in outstanding central government loans).
Make no mistake, those matters are troubling, but unfunded pension and public healthcare costs are the proven country killers.