Only half a year into the budget cycle government has run out of funding for the tertiary care for indigents, seamen and veterans that cannot be provided by the Health Services Authority.
The initially-budgeted $20.9 million for the year has already been exhausted to pay third-party medical providers both locally and abroad.
Parliament’s Finance Committee approved an additional $8 million last week, but this is not likely to be sufficient to meet current monthly running costs of $3.3 million.
Health Minister Sabrina Turner told the committee that, internationally, healthcare costs have risen and her ministry estimates annual funding needs to be between $38 and $41 million in 2022.
“We have seen an increase in this just because of the increased number of indigents since the lockdown, seafarers and veterans, as well as their dependents. But overall, the cost of tertiary health care has gone up,” Turner said.
Committee members agreed the notorious output item ‘NGS 55’ has been “chronically under-budgeted”.
The current budget allocated $20.9 million in 2022 and $21.6 million in 2023, even though last year’s estimates already projected $35 million for the annual tertiary healthcare cost for indigents, seamen and veterans.
The health benefits of indigents and the overseas benefits of seamen and veterans are managed by CINICO as an administrative service only. CINICO pays the claims and then immediately invoices the ministry of health and wellness.
While the healthcare risks are fully borne by the ministry, the government insurer still faces a liquidity risk, if government does not pay on time.
Finance Minister Chris Saunders said the $8 million should take government through the summer to next session of Parliament, most likely in September. The funding needs could be reassessed then.
MP for Red Bay Alden McLaughlin said although he was fully aware of the issues affecting this appropriation, “I think it is time that we become more realistic in the budgeting for this”.
“The bigger picture is that we have to find some way to make handling these sorts of matters more affordable. I truly hope that in the efforts to essentially broaden and redefine the role of CINICO that we can we can find something that helps here.”
Saunders said the government agreed with the Opposition on the matter. He noted that the vast majority of costs related to emergencies. Having people insured meant that government could use reinsurance to limit some of the financial impact.
In addition, the health ministry was working to encourage people to get regular check-ups so that some issues could be detected before they become emergencies, Saunders added.
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