Cayman Islands Deputy Governor Franz Manderson said last week there was “no support” for plans to require government workers to pay a portion of their healthcare premiums.
Mr. Manderson’s comments came in an administrative circular released to civil servants last week.
“Many of you have … shared anxieties about proposals for cost-sharing on healthcare,” Mr. Manderson’s email read, noting that any decision to charge for healthcare premiums would reduce workers’ take-home pay.
“While work needs to continue to identify proposals to tackle the very real concerns of a growing healthcare liability, I can now advise that there is currently no support for existing civil servants to contribute to their healthcare costs,” the deputy governor wrote.
The statement put paid to any notion that government would begin charging its workers for healthcare premiums by the start of 2018, as was envisioned by the former Progressives-led administration during 2015-2016.
At present, all civil servants, their spouses, underage children and civil service retirees receive 100 percent free healthcare coverage, as long as they use the public hospital system. Government taxes and fees are used to fund tens of millions of dollars each year in healthcare payments on behalf of civil servants.
An employee survey completed last year by the civil service found that pay and benefits received the lowest scores among employees who rated various aspects of their jobs and working environment.
“Civil service pay has not kept pace with the changes in inflation and we have now fallen behind by about 10 years,” the deputy governor wrote in the administrative memo.
Mr. Manderson’s comments last week left open the possibility that new civil service hires may be required to pay a portion of their healthcare costs at some unspecified date.
Financial Secretary Ken Jefferson told Legislative Assembly members in February that the proposal was still under discussion.
“It is intended that cost-sharing would only apply to civil servants at a future hire date and, to the best of my knowledge, that hire date hasn’t been decided,” Mr. Jefferson said at the time.
He added that the government believed that the public recognized the serious issues faced in continuing to provide healthcare to a population that was living longer after retirement.
He said a review of healthcare liabilities completed in late 2017 had looked at how much the government expects to owe for health costs in the next 20 years, as well as how much taxpayers are funding public sector healthcare annually. The question now is, what to do about it, he said. The numbers can look scary, Mr. Jefferson told the legislators, but he said, at this stage, the issue is not a public “crisis.”
In 2014, the government estimated its present value healthcare liability for both current and retired civil servants would be $1.18 billion over the next 20 years.
By June 2016, those future liabilities were estimated to have increased to $1.4 billion and last year, to nearly $1.7 billion.
It is not all money that is due at once, Mr. Jefferson said. However, if the healthcare costs continued to grow as expected, they could end up “overwhelming the government’s budget,” he said.