Cayman Islands residents on the standard healthcare plan can expect premiums to go up by at least 50 per cent over the next year.
The cost increases, a result of legal changes mandating improved coverage, will be rolled out over the next 12 months as policies are renewed.
A range of additional benefits have been added to the Standard Health Insurance Contract, the basic minimum coverage plan that every policy must include.
The costs associated with those added benefits could even see some premiums double in price depending on risk factors and the type of coverage plan, the Health Insurance Commission has said.
The exact amount that each policy will increase will vary depending on risk factors and the level of coverage. About one in three Cayman Islands residents are on the basic plan (SHIC) and they will see the most significant increases.
Policyholders with more expensive and sophisticated coverage are also likely to see some increases as a result of the legal changes but they are not expected to be on the same level, unless other factors are involved.
Mervyn Conolly, superintendent of health insurance with the commission, which acts as a watchdog for the industry, said the basic coverage plan had to be improved and updated because it was not meeting people’s needs. He said it was reasonable to expect cost increases as a result of the improved product.
Approved insurance companies are required to file any increases in the standard premium rate with the HIC. They must get approval from the commission before they can legally introduce cost increases.
Mr. Conolly added: “Because the benefits have increased, we expect the contribution from the employee will increase by as much as 70, 80, even 100 per cent in some cases. We expect it will go up by at least 50 percent in most cases.”
But he said anyone who felt their premium increases were unreasonable could file a complaint with the HIC and it would be investigated.
“If the policy has gone up by 100 per cent or more, with no obvious explanation, then those individuals should be submitting that to my office. If it seems excessive, then people can go ahead and contact us.”
He said the range of coverage now included meant that policy holders were still getting a good deal.
At the moment, the basic policy is available for around $80-a-month. A 50 per cent increase, for example, would see that rise to $120. With employers bearing 50 per cent of the cost that would mean $20 less in the monthly pay packet.
Speaking to the Compass last week, Health Minister Mark Scotland said the improvement in coverage was worth the increase.
“We are cognizant of the fact that this comes at a time when it’s difficult financially,” he said. “We could delay it and delay it, but we believe the insured population deserves an improved benefits plan so they can be paying for a health insurance plan that is useful to them and is beneficial.”
Some policyholders on a variety of different plans say they have already been stung by increases of more than 100 per cent.
Morne Botes, 34, said his policy with Fidelity had gone up from $5,600 annually to $13,600 – an increase of 144 per cent.
Mr. Botes, whose 4-year-old son, Carter, had to be flown to Miami for treatment after suffering a seizure in 2011, was told by the insurance company that the increase was down to a combination of the new coverage, other upgrades to his plan and the fact that he had a significant loss ratio over the past year.
Mr. Botes said he was concerned that his policy could be increased by so much in a year. The South African businessman, who has taken early retirement with his family in the Cayman Islands, said his son had since been diagnosed with autism. The therapies for autism are not included in his plan.
He said he could afford the increase, but was concerned that others might not be able to.
“We really just had one claim for when my son had to go to Miami after having a seizure,” he said. “To put up the policy by this much on the basis of that one claim doesn’t seem fair.
“I can live with the $13,000, but where does it stop. What happens if they put it up another 100 per cent next year. I would have thought there would be a maximum percentage they could push it up in a year.”
Fidelity declined to comment on the case.
Mr. Conolly, of the HIC, said the commission, based on the first floor of the government administration building, would investigate any complaints about excessive increases.
Related Videos
We are once again looking at the profit of the insurance companies being a basic right when health care for the people should be the priority. socialized medicine is the answer. Look at the statistics of overall healthy of populations with that system vs the systems controlled by greed and it is and easy choice.
There is something inherently wrong with insurance company adjusting cost of coverage based on events like the one described – having a seizure. Yes, they see increased risk and they want to charge for it, but risk in first place is the reason why you ever come to insurance company – you want to pay fixed amount to avoid risk of going bankrupt. If all company does is collect cash from you, but whenever they see more risk they start collecting more – why would you need such insurance (would you call it insurance at all)? It fails the whole idea of coverage from risk.
The only reason why high premiums are explainable – is for low probability but extremely high cost events. In normal situation healthy person does not incur even a fraction of amounts paid as premiums. And the explanation always was that IF you get something serious YOU’ll be covered. So they say IF you get something serious YOU’ll pay more for it. Does it make sense?
You should also differentiate between conditions preventable by person and not preventable by person. Charging more for car insurance for person being a reckless driver (proven record of minor incidents or collection of tickets) is reasonable, because person could prevent it by changing behaviour. Assuming that driver is reckless because he is below 21 is statistically reasonable, but extremely unfair. Same with health – charging smoker more is reasonable, charging person who just had a seizure – statistically reasonable, but not fair. By not fair I also mean that it undermines the whole idea of insurance. I know that this is reality, but I think insurance companies must be prohibited increasing costs for something which is beyond control of their client. This is why it is called insurance after all.
Another idea that bugs me is that in case something bad happens to expat (like cancer or HIV) – you’ll get kicked of work permit and off the island. The question is – how easy it will be to get covered by your insurance in your home country? E.g. in my home country basic medical coverage is declared free officially, but does not work this way in reality. Would insurance company decline coverage on basis that I can get it free, when in reality I can’t? Would they try to drop coverage the moment you leave island? Considering most reasonable explanation for high costs – that this is to cover low probable but very cost events – this is exactly the situation with low probable but very costly event – you again have situation of paying for you don’t know what.
Ask yourself these questions and think a little bit about fairness and general purpose of insurance.
Dear Readers,
When I inquired to Fidelity on why my policy is going up this was the response, take note that of the 15000 in claims, 12 000 was my son’s one visit to Miami Children’s Hospital of which we had to co-pay 8000.
From Fidelity:
Please be advised that the increase in your annual Health Insurance Premium was due to the following reasons:
1. Your loss ratio for the past year was 375% (Annual premium collected was US5,548.00; claims paid for the year US15,591.00)
2. Due to the increase of the benefits of the Standard Health Insurance Contract gazette published in The Health Insurance Law (2011 Revision) The Health Insurance (Amendment) Regulations, 2012, rates were increased on all plans as the Standard Plan is the base plan of all supplemental plans.
3. The benefits of the Individual Platinum Plan were upgraded to be in line with the market trend. The main upgrades of the plan are as follows:
a. Lifetime maximum increased from US1.2 million to US2 million
b. Congenital abnormalities and Premature Birth Lifetime maximum of US250,000.00
c. Organ Transplant Lifetime Maximum of US500,000.00
d. Repatriation of mortal remains of US12,000.00
e. Prenatal care of US2,500.00 (previously US600.00)
f. Prosthetic and durable equipment at Lifetime limit (previously not covered)
g. Preventative Care at an annual maximum of US500.00 (previously not covered)
My loss ratio is not my problem. My loss ratio is problem of probability models used by insurance provider when pricing the service in very beginning.
That’s very nice of insurance companies to spit in your face phrases like
Your loss ratio was 375%.
It’s like saying
You came to us promising returns and turned out to be another #censored#.
Regarding Huh’s comments.
I have a US business that has seen a 20% increase in health insurance for my employees last year, and this year the cost has increased 22% and the benefits were reduced. Next year another 20% increase is expected. This is all in the face of obama care which has effectively socialized health care in the US. I assure you socializing health care is not the answer. Look at a chart of health care costs in the US since Medicare was legislated. Costs have soared 440%. Before the government got involved in health care anyone could go to a doctor, or a doctor might even come to you, and be treated for a tiny fraction of todays cost. Doctors could not ask so much for treatment because the people did not have the money to pay. A classic example of free markets. Unless you enjoy slavery to your government, your better off with free markets.
For those of us who already pay these stupidly high rates and make no claims this is not acceptable! I don’t claim yet my insurance costs are going up! It should go down!!!
What is the actual value comparison between US and CI health insurance coverage?
The commission’s negotiators are not doing too good with this issued. Let’s bring more insurance companies into the market for more competition. Let’s our hospitals purchase internationally approved equipment and drugs from India and China. Let the existing suppliers know that they are not the only ones and if they don’t take seriously, they will loose our business.
The local health insurance companies has to study the ones in Europe. There it is mandatory by law to have health insurance. There everybody pays the same for the basic coverage and if one wants some add-ons you can do so by paying for the ones you want.Everybody pays the same for what-ever they add on. It is against the law to even ask if the insured person has any pre-excisting conditions. It is a pool of people in the insurance and everybody pays for everybody. No matter how expensive one person is, the premium remains the same, as one pays for the other. Nobody wants to be sick and one have a health insurance for the unexpected. All insurance companies want to collect and not to pay and this what they all are doing especialy here in Cayman Islands.
Here you pay a lot and the insurance companies pays what-ever they feel like paying you back, as they hide behind the so called the customary price.
They charge 2013 premiums and yet they want to pay back prices that were agreed upon by the Government in 2006/2007. As long as our government does not change those prices, the insurance companies will keep on paying these low prices back to you. Even if you go to the hospital doctors, they still do not pay you back the charged amount, as they say that the doctors charged too much. If this practice continues much longer it will become impossible for the companies and employees to pay these absurd prices for health insurance.
I am 1 person (with no pre-excisting conditions) and I pay CI.8,760.– per year. Deductible of CI..500.–per year and a co-payment of 10 to 20% and on top of all this, I still have to pay any difference to either the doctor or hospital that the insurance company does not pay. This adds up to me paying for health over CI..10,000.– per year roughly. Who can afford this!!!! The Government has to step in and change this practice. If the health insurance company cannot stand the heath, they have to get out of the kitchen. I have no sympathy at all for these insurance companies. WE NEED CHANGE.
Insurance company are controlling the health care market, they increase malpractice premiums for doctor to ridiculously high rates which means the doctors have to increase their fees to pay them and in turn the same insurance company increases the premiums of the patients due to this while decreasing benefits and raising copays
Just a quick overview of how it works in the UK.
Everyone (earning above a certain threshhold) pays 11% National Insurance. That is matched by the employer.
It is a government system so no shareholders to satisfy, nor do the figures go up for any individual who made a claim – always 11 percent of your earnings.
OK so National Insurance also covers the state pension.
So about a fifth of your entire earnings is required to provide health care and pensions.
The system is available to all and free at the point of delivery (and includes dental care too.
Problem with health care is people want less when they have to pay for it, but more when they need to use it.
If Cayman can improve the level of Medical care, then the market for treating US patients could be far bigger than just the Shetty Hospital, with the spinoff of better treatment for those here. Improving infrastructure could reduce the number of emergency flights to Miami and reduce those costs.
There has long been talk of a third pillar to the Cayman Economy and health care could become that, provided the Government and Insurance Companies dont take too big a slice of the Pie.
Here is another anomaly with the insurance law. A prior employee was rolled over, went to his home country for a year and now came back to work for another company
His new employer sought to provide him with basic insurance coverage as required by law. It so happened that the new employer is using the same insurance company which insured the worker for 7 years prior to the rollover. Upon application the insurance company accepted to insure the worker but excluded from coverage in perpetuity all potential complications that may or could arise from all the conditions they were aware of, despite a number of doctors concluding that the employees medical conditions were categorized as one off, and not subject to future reoccurrences, side effects etc.
I simply find this unfair to the employee. Any thoughts?
Anyone else notice the dubious math?
Paid in – 5,548
Paid out 15,591
Ratio of 15,591 to 5548 = 2.81 to 1 or 281 percent NOT 375
375 of 5548 would give 19,418 – so where’s the missing 3,827.
Surely fairer to consider the ‘loss ratio’ over more like a 5 year period.
Hey wait, I haven’t claimed in the last 5 years, but my premium doesnt ever decrease – isn’t that a touch strange?
In the UK we have insurance companies called Mutual Insurance companies – at the end of the year, any ‘profit’ is repaid back to the policy holders in the form of a dividend. i.e. the policyholders ARE the shareholders
Are such companies allowed in Cayman?