Private health costs, insurer earnings soar

Earnings for Cayman’s private sector health insurers nearly quadrupled in one year following changes made to the islands’ standard health insurance contract rules, members of the Legislative Assembly’s Public Accounts Committee heard Wednesday.

At the same time, committee members said monthly premiums paid by private sector employees for healthcare coverage went up by an average of between $1,000 and $2,000 per year.

The numbers do not include public sector employees or retirees who are fully covered under a healthcare plan maintained by the government. The government plan does not charge monthly premiums to civil servants, their dependents or retired civil servants.

Bodden Town West MLA Chris Saunders noted the Cayman Islands Monetary Authority annual reports for each year since 2011 showed significant increases in earnings for the health insurance sector, going from about $4 million in 2011, to $10.8 million in 2012, to about $14 million in 2014 and a sudden jump to $51.5 million by December 2015.

Those earnings are calculated after subtracting premium payouts, underwriting costs and other staff costs, the figures for which are provided each year to CIMA by the nine private sector insurance companies operating in Cayman.

“What is happening?” Mr. Saunders asked Health Insurance Superintendent Mervyn Conolly during Wednesday’s proceedings. “I am really uncomfortable seeing … profits jumping up in one year on the backs of the consumers of this country.

“Bear in mind, this is 2015 numbers we’re looking at … I dread to see the numbers for 2016, 2017,” Mr. Saunders said.

The Public Accounts Committee was reviewing CIMA reports for the 2015/16 fiscal year, the latest available.

Mr. Conolly said Mr. Saunders’s calculations showing how much healthcare costs had increased for private sector employees were correct.

“It is also very disconcerting for us at the Health Insurance Commission,” Mr. Conolly said. “It’s clear that the premiums [the insurers] are collecting [have] been significantly increasing.”

Mr. Conolly said a major change to Cayman’s Health Insurance Law was made in 2013, eliminating four separate plans the Health Insurance Commission regulated and replacing them with one basic coverage plan, known as the standard health insurance contract.

If any employer or any individual wishes to obtain additional insurance coverage outside of the standard contract, they can do so. However, the Health Insurance Commission is not able to regulate the rates charged for those additional coverage plans, Mr. Conolly said.

The premium rate for the standard health insurance contract has not changed since 2013, he said.

Mr. Conolly did note that about 80 percent of the private sector health insurance contracts now operating in Cayman opted for additional coverage in some form. He also agreed with Public Accounts Committee members that companies could charge whatever the market would bear for those additional services.

“Year-on-year for those supplemental [health] plans, the approved insurers are automatically implementing an increase in the premium,” Mr. Conolly said.

There is another side to the story, the superintendent said, when it comes to considering whether additional regulation should be brought to bear on the local healthcare market. “There would be some implications if we restricted the plans that the insurers could offer … mainly in the area of choice,” he said.

Cayman’s current range of healthcare provider options could be affected if government took stricter regulatory control of additional health insurance plans, Mr. Conolly said.


  1. If Mr Connolly and his fellow civil servants were restricted to the benefits of the SHIC (albeit without having to pay anything), they would all resign en masse. Just to give one example of the paucity of coverage, a mental health patient admitted for treatment on a single occasion, for a month, would be without coverage for the rest of his life, having exceeded the lifetime limit.

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