Spike in health insurance costs

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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.

Mervyn Conolly, Superintendent of HIC

Published 26th March 2013, 2:33pm

By: James Whittaker | james.whittaker@cfp.ky |
Caymanian Compass
08 March, 2013 

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.