Discussions on how much Cayman Islands civil servants must pay in monthly healthcare premiums will be completed by the end of the current government’s 18-month budget period in December 2017, Finance Minister Marco Archer said Thursday.
Civil service employee payments for healthcare will then begin in the next budget cycle. The next budget period begins Jan. 1, 2018, Mr. Archer said.
“That will occur regardless of which [political] administration is there,” Mr. Archer said, responding to questions about the issue from the Cayman Compass Thursday morning at the Marriott Beach Resort.
The minister told hundreds of attendees in the crowd for the government Professional Development Week event held at the Marriott that the timing – “by the year 2018” – was an important distinction. He said both the elected government and the civil service management want to have the healthcare copayment agreements in place during the 2018/19 budget to help reduce a massive, $1.18 billion future liability in the government healthcare system.
That amount, measured over a 20-year rolling period, represents the largest single financial liability the Cayman Islands government maintains, well above what it has estimated in pension costs ($200 million unfunded liability) and also more than the entire public sector debt ($593 million as at June 30).
The next government budget is a two-year spending plan which starts in January 2018. Mr. Archer said the public sector will be burdened with a staggering debt for retirees’ healthcare in the coming years if it cannot or will not get a handle on annual healthcare costs now.
Exactly how much civil servants could be charged in monthly premiums was not discussed during Thursday’s conference, and Mr. Archer said he did not want to get into the specifics of ongoing discussions at the moment. Civil servants, dependent spouses and children currently have their healthcare costs covered 100 percent by government, including monthly premiums.
The first-term minister, facing a re-election battle in George Town this May, said he realizes the decision will not be the most popular, politically speaking. But he believes the civil service management and the elected government is doing the best thing for the country’s financial future. He said he doubts future governments will have much choice in the matter, no matter who is elected.
“I know some politicians may say ‘oh no, we’re not going to do that to you,’” Mr. Archer said.
Ongoing discussions with the civil service employees association have also indicated that government workers may no longer be forced to use the government Health Services Authority for health-related services, as they are now if they want to receive free healthcare. Mr. Archer said choice of healthcare providers will be introduced as an option for civil servants when copayments begin.
Collection of bills owed to the Cayman Islands government is another area in which the public sector desperately needs to improve, the minister said.
Mr. Archer said he’s concerned that government financial statements for its entire public sector will continue to receive substandard audits and largely remain unaccountable to the public until government can properly report what it is collecting.
“For every transaction, a private business would be able to say ‘here’s a receipt, here’s a check …. That’s not the case with government, but it should be,” Mr. Archer told the Compass.
The most spectacular example of government revenue collection problems in recent years has been with the Health Services Authority, which manages the public hospital system. The authority estimated it had amassed $90 million in bad debts – bills owing for more than a year – at the start of the current year’s budget on July 1. A large portion of those debts are more than six years past due.
However, Mr. Archer said issues with “revenue completeness” go far beyond that and have been noted at various departments within every ministry or portfolio in government.
Finance Ministry Deputy Chief Officer Michael Nixon put it succinctly: “We have taken a lot for granted on the revenue side.