NHI - The General Idea

The details of the Government's National Health Insurance (NHI) plan have not been made public, however based on information gleaned from "consultative" meetings, town meetings, the news media and the proposed NHI legislation we can get a general idea of how NHI is expected to operate. There are gaps in the information provided in this article, and until the NHI regulations are finalized this outline is subject to change.

     NHI is Not Designed to Cover the True Costs of Health Care
Taxes and fees collected by Government are deposited into the Public Treasury and these monies are known as the Consolidated Fund. Government currently allocates approximately 15% of the Consolidated Fund for health care and related activities which amounts to over $200 million per year. After the implementation of NHI, Government still intends to use the Consolidated Fund for capital expansion and improvements of public health care facilities, i.e. building, equipping, and maintaining Government clinics and hospitals. NHI funds will be used to cover only the cost (salary) of the health care provider and the specific medications and supplies used for the treatment of the patient.

Since health care providers in the private sector must take capital depreciation expenses, maintenance, and the dreaded 'P' word - Profit, into consideration in determining prices, it will always cost more in the private sector for health care than the amount that will be recovered by NHI payments. Therefore, the only "free" health care services will be though public sector facilities, provided that only the bare-bone necessities are utilized, such as the public ward. If you want a private room in the Government hospital under NHI you will have to pay for the privilege.

The Government expects to recoup $18 million per year for health care services provided by the public sector to persons not covered by NHI. It is hoped that the amount charged to persons not covered by NHI will be based on true costs which includes capital depreciation and maintenance expenses; otherwise our tax dollars will subsidize the health care costs of these individuals.

Speaking of taxes, let's call a spade a spade. Government imposed mandatory deductions from employees and contributions by employers based on pay are a tax, a payroll tax to be precise. We already have a payroll tax for National Insurance and NHI will be another payroll tax. It is important to note that payroll taxes are not paid into the Consolidated Fund. National Insurance contributions are paid into the National Insurance Fund and NHI contributions will be paid into the NHI Fund. The respective legislations provide mechanisms for the disbursement of theses payroll taxes which are not to be commingled with each other or the Consolidated Fund.

     Who Will Pay and Who Will Be Covered
Payments into the NHI Fund will be made by employers, employees, certain persons receiving pensions, voluntarily insured persons and Government. Except for voluntarily insured persons, payments to the NHI Fund are mandatory. Employees covered by NHI will receive dependant coverage for their non-working spouse and children under the age of 18 years, unless those children attend full time studies at an educational institution which increases the age limit to 25 years. Working spouses are required to pay for their own NHI coverage. The cost of NHI coverage for employees will be 5.3% of wages up to a ceiling of $5,000 per month. The cost is split between employees who will have payroll deductions of 2.65% from their wages, and employers who will have to match employees' deductions with a contribution of an equal amount.

Self-employed individuals will be required to pay 5.3% of the average or mean wages (not yet determined) earned by self-employed persons in their category or profession up to the $5,000 ceiling. Depending on the amount received, persons receiving a pension may have to contribute to NHI at the rate of 2.65% up to the $5,000 ceiling. If the pension received is below a certain amount contributions will not be required.

Government will pay from the Consolidated Fund NHI contributions for children not covered as dependants, indigent persons, invalids who are permanently incapable of work, and any other class of person as may be prescribed (i.e. provided for in the NHI Regulations). In order to provide universal coverage Government will be required to provide coverage for the unemployed and the elderly who do not receive pensions, so presumably these groups will be included in the NHI Regulations when written.

In order to determine the solvency of NHI, actuarial reviews will be performed on a regular basis. The first actuarial review of NHI is scheduled for the 31st of December, 2008, then every three years thereafter. Depending on the actuarial results, the contribution levels for NHI may need to be increased. In other words, the mechanism is being put in place to increase the 5.3% contribution rate for NHI as early as 2009.

     NHI Registration, Deductions and Contribution Payments
The NHI Scheme will be managed by a Government corporation to be known as the NHI Commission, similar to the way the Government corporation National Insurance Board manages the National Insurance Scheme. In order to receive NHI coverage, individuals will need to be registered with the NHI Commission. It is not yet known whether an individual's National Insurance (NI) number will be used for NHI, or if a new number will be issued that will be used by both NHI and NI, or if a separate number will be used by NHI and NI numbers remain unchanged.

NHI will add a new level of complexity to an employer's payroll system regardless of whether their payroll system is manual or computerized. Many computerized payroll systems will need to be modified to include in its programming the extra fields for NHI employee deductions and employer contributions utilizing the correct percentages and ceiling for NHI contributions, and possibly a new or separate NHI identification number.

Although the National Insurance Board will be responsible for collecting NHI contributions, it is not known whether one contribution form (such as a modified NI C-10 form) will be used to report both NI and NHI contributions or whether separate forms will need to be produced for each of these payroll taxes, however there will need to be two checks, one made out to the National Insurance Board and the other to the NHI Commission so that the funds are not commingled. When NHI is implemented, NI deductions/contributions of 8.8% and NHI deductions/contributions of 5.3% will result in payroll taxes in The Bahamas of 14.1%.

     Accessing Health Care Services
All public sector health care providers and facilities will be required to be part of the NHI network, while private sector health care providers and facilities will have the option to enter into contracts with the NHI Commission in order to be part of the NHI network. It is important to note that under NHI "health care provider" and "health care services" are narrowly defined, therefore holistic and naturopathy health care services will not be covered. In addition, a number of conventional health care services will not be covered by NHI, such as dental and optical services, as well as long term geriatric care.

When an individual is registered by the NHI Commission as an insured person, a "smart-card" will be issued to the individual. The smart-card will be similar in appearance to a credit card, showing the insured person's name and NHI number. The smart-card will also contain a magnetic strip on the back that can be electronically scanned. Health care providers and facilities will be issued NHI scanners that will be networked with the NHI database in order to verify the individual's coverage and to charge NHI for health care goods, treatments and services provided to the insured person.

It is expected that the utilization of NHI will be a stringent process based on predefined criteria. Except in urgent situations requiring a visit to the Emergency Room, the initial use of NHI will be through a General Practitioner (GP). Going directly to a Specialist may result in the patient having to pay the difference between the Specialist's rate and the rate that would have been charged by a GP, or possibly even a denial of payment from NHI resulting in the patient paying the full amount of the Specialist's charge. Referrals by the GP to Specialists and other health care providers will have to be in accordance with the regulations of NHI in order for the patient to get full coverage from NHI.

Patients who use private sector health care providers and facilities that are part of the NHI network will have to pay the difference between the amount reimbursed by NHI and the price of the services charged by the private sector provider and/or facility. This difference would be payable by the patient or the patient's private health insurance, or a combination of both.

There doesn't appear to be any mechanism for individuals to be reimbursed for paid medical services. It looks as if all NHI payments will only be made directly to health care providers and facilities that are part of the NHI network or referred through NHI.

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