Efforts to lower taxpayer-funded healthcare premiums by encouraging government entities under private sector coverage plans to join the government-run insurer have failed, according to Cayman Islands National Insurance Company Chief Executive Lonny Tibbetts.
CINICO currently covers more than 15,000 Cayman Islands residents, including all civil servants, civil service pensioners and their families, Mr. Tibbetts told members of the Legislative Assembly’s Finance Committee Friday. However, thousands of public sector employees, including many of those working in the government’s 19 statutory authorities and the seven government-owned companies, do not use CINICO coverage. Those entities have opted for private insurance coverage.
Mr. Tibbetts said, in most cases, the authorities and companies will charge employees a percentage of monthly premiums and those workers will also have to co-pay for certain doctors visits. Civil service employees do not pay monthly premiums for their health coverage, those costs are borne entirely by government. Government healthcare managers have talked for years about getting those remaining authorities and companies to include their workers on CINICO’s plan as a way to share risk and, thereby, lower the monthly premiums the public sector pays.
However, Mr. Tibbetts said efforts to encourage this within the past year have been rejected, with the public sector entities stating government premium rates were much higher than the ones they pay now to private sector insurers.
The statutory authority and government company workers, Mr. Tibbetts said, wanted to maintain private healthcare coverage, but that would come at a cost. He said that cost, which was estimated earlier this year, was about $1 million more in annual premiums for the CINICO plan when compared with the private sector offerings.
Generally speaking, the CINICO healthcare plan, including the choice option which allows employees to visit private-sector medical practitioners, was a far better quality coverage plan than the ones offered by various private insurers, Mr. Tibbetts said.
“[The statutory authorities and government companies] all desired the plan. The problem they had was they felt the probability of a major [healthcare] event was minimal and when it did happen, they could default that individual back to the indigent plan – which falls back on the Cayman Islands government again,” Mr. Tibbetts said.
“We’ve put CINICO in an untenable position,” said Bodden Town West MLA Chris Saunders.
The current healthcare arrangement for those entities creates an even larger problem when an older employee retires and is typically offered three months of continuing health insurance coverage, Mr. Tibbetts said. After that, they are on their own to find whatever healthcare coverage is available, if any.
“The elderly people are being exposed,” Mr. Tibbetts said. “They’re being put out of the insurance plans and they’re being left on the streets without coverage. There’s nothing that forces that company to continue to insure that person [into retirement].”
Mr. Tibbetts was asked whether CINICO would support a move to a single-party insurer, making CINICO the lone healthcare insurance option in the Cayman Islands market. The idea here is that some 60,000 people in the Cayman Islands all insured under the same health plan would reduce risk and lower premiums charged to individuals.
Mr. Tibbetts said this would likely create a healthcare market where it took weeks or even months to access needed services.
“I’ve never seen a monopoly that was efficient,” Mr. Tibbetts said. “I do believe there is still a great value in having a private sector component to our market.”
Lawmakers suggested that the private sector insurers could still remain to offer choice to anyone CINICO covered, as long as they were willing to pay more for the health insurance premiums.
This would require major legislative changes and would alter the nature of the current market, where there are now nine class A insurers, CINICO included, Mr. Tibbetts said.
“[There’s] no question CINICO, with significant capitalization and resources, could be a single-source provider,” he said. “But it would require change in laws.”