National Health Insurance - Comments and Concerns

One of the biggest fears faced by most people is that they may be involved in an accident or contract a disease or illness that requires extensive medical intervention that could cost tens of thousands or even hundreds of thousands of dollars to treat. The concept of a National Health Insurance (NHI) plan that would cover all the medical costs of such an accident or illness is a reassuring one that provides ease of mind regarding the financial aspect of such an event.

The government of The Bahamas does have a duty to its people to examine the issue of health costs and deserves to be lauded for appointing The Blue Ribbon Commission and seriously considering its report On National Health Insurance. The cost of health care is a very important issue and it should be noted that government's budget on health related matters during the 2005/2006 fiscal year exceeds $200 million.

However there are a large number of critics of the Commission's report On National Health Insurance due to concerns that are contained in the report and concerns that are not mentioned in the report. Some of these critics have been vocal and others have not (at least not yet).

     Cost of National Health Insurance
The estimated total cost of the National Health Insurance plan is $234 million per year. This figure was determined by taking into consideration factors known by the members of the Commission during the time that the report was written. It is felt by many that this figure is too low as several factors were not incorporated into the equation and insufficient research was done regarding health costs in the private sector. For example, what consideration was given to those persons who did not seek medical care due to their financial inability to pay for treatment, or those who sought medical care but were unable to afford the cost of the procedure recommended by their physician? What about those who have health insurance outside of The Bahamas (which is contrary to our laws, but is done by some nevertheless) and received treatment outside of The Bahamas?

As previously stated, government subsidizes a lot of health care cost in The Bahamas, but even the huge amount they spend is insufficient in many cases, therefore even public sector costs may be under quoted in the NHI report. One example of this is government dialysis patients. For those whose kidneys have failed, dialysis is required to keep them alive and this treatment is very expensive. The normal dialysis patient usually requires dialysis three times a week with each session lasting between three to four hours. There are times when government dialysis patients are scheduled only twice a week with sessions that last only one and one half to two hours. This is due to the fact that dialysis equipment is very expensive and there are a limited number of dialysis machines available for government patients.

     Payment for National Health Insurance
Once implemented, NHI will be mandatory with legislation more than likely designed to make it a criminal offence if NHI payments are not made. Employees will be required to pay 2.65% of their earnings through payroll deductions and the employer will be required to contribute an equal amount representing a total of 5.3% of the employee's wages. Unlike National Insurance which is capped at $400 per week ($1,733.33 per month), NHI will be capped at $5,000 per month ($1,153.85 per week). Self-employed persons will be required to pay 5.3% of their earnings, pensioners will be required to pay $1 per day, and government will pay for those who are indigent plus provide other subsidiaries. Like any other employer, government will also be required to pay the employers portion of NHI for all its employees. It is anticipated that the funds generated through these methods would be enough to cover the costs of the NHI plan.

The Blue Ribbon Commission did not conduct a study on what the economic impact would be to the local economy under this plan, however it is of paramount importance to determine whether or not The Bahamas can afford NHI in this form. It is vital that both the public and private sectors research this issue to ensure that it is economically viable prior to implementation. However, it does not take an economist to realize that pensioners on a fixed income would find it difficult to stretch their budget to include an extra $30 a month in expenses.

One of the facts of life is that medical costs rise faster than the rate of inflation. This is due to technological advances and innovations that cause the cost of treatment to go up, however the end result is that life expectancy is increased and quality of life is improved. In order to keep up with the ever expanding new medical information as it becomes available, any doctor worth his or her salt is involved in a continual education process through study of journals and texts, as well as seminars and workshops.

How will the NHI plan deal with increased medical costs as time goes by? Will the level of contributions from employers and employees be increased? If so, when will these increases be put into effect and by how much?

     Coverage of National Health Insurance
NHI proposes a comprehensive package that will cover health care services for primary care visits, specialist visits, accident and emergency visits, inpatient medical and surgical care, inpatient mental health care, home health care visits, laboratory and diagnostic services, prescription drugs, emergency airlift and transportation, and overseas catastrophic care that is not available locally. The details on how this comprehensive package will be provided is not included in the Commission's report, which implies that these services would be provided entirely free of charge.

There is no private group health insurance plan that offers these types of benefits. Even the most comprehensive group health plan requires the patient to pay a deductible before any benefit is given by the insurance company, then an out-of-pocket amount has to be paid as a percentage of costs (usually 20%), after which the insurance company pays 100% for major medical, provided the facility and physicians are in the insurance company's network. In cases where the cost of a procedure is more than the "customary" cost determined by the insurance company the benefit paid is limited to the "customary" amount. In addition, there are a number of medical services that do no fall into the category of major medical, such as air ambulances, physical therapy, etc. and in these cases the insurance company will only pay a percentage of the costs and usually caps the total amount they will pay for these services. Then there is usually a limitation on the amount of payments that will be made by the insurance company per individual such as $1,000,000 in lifetime benefits. The truth of the matter is that even those with "good" group health insurance policies find themselves in so much medical debt for items not covered that they resort to fund raising activities such as cookouts to service their debt.

Will NHI require any kind of deductible, out-of-pocket, or lifetime limitation? Is it required that a treatment or procedure be deemed "medically necessary" in order to be covered by NHI, and if so who will make this decision?

NHI's policy will be to invite all private sector providers to join the NHI network of services and will reimburse the private providers at the same rate as the public sector. Private providers will have the option of charging a co-payment to the patient, to be paid for through out-of-pocket payments or supplemental private health insurance.

Will NHI produce a two tiered health system in The Bahamas, one being the public sector and the other being the private sector, similar to the Bahamian education system?

     Administration
In January of 2004 the Blue Ribbon Commission completed its report On National Health Insurance. In their report the Commission recommended that NHI should be administered by the National Insurance Board. The Commission raised the point in its report that, "The NIB is currently operating with approximately 17% administrative overheads. A NHI system will not be feasible with that high an administrative burden. The cost of administering the NHI system should be less than 10% of the income of the system."

In the time since the report was completed it has been revealed that the administrative cost of NIB now surpasses 20%. How can a feasible NHI plan be implemented with administrative costs that are double the recommended amount?

     Closing Comments
This article is by no means comprehensive or exhaustive as there are many other concerns that have not been mentioned. It is expected that NHI will be a hot issue in the coming months, so you can expect more articles in BECon's News Bulletin concerning NHI in the near future. Final comment: If the goal of NHI is to have an affordable plan that is sustainable it may be that the current NHI proposal may turn out to be neither.

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