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Health reforms likely to cause rise in insurance premiums - 2/12/2003

Daniela Xuerbe (Malta independent)

The planned reforms in the health service system could lead to an increase in the rates of private medical insurance premiums.
In his budget speech last Monday, Finance Minister John Dalli said measures will be taken so that those who have medical insurance, victims of accidents covered by insurance, and foreigners, even those covered by a bilateral protocol, but who are also covered by insurance will be billed for hospital treatment.
Speaking to The Malta Independent on Sunday, Minister for Health Louis Deguara said the reform is based on the principle that insurance companies will be asked to foot the bill for those who have private health insurance and received medical services at St Luke’s Hospital.
Trying to strike a balance between support and viability in the health system, the reform will differentiate between those who can afford private health insurance and those who cannot. The former will compensate for the latter and this will ensure a health system of solidarity and equity.
“If there are people who can pay for their health care in the private sector, they will be helping those who cannot – the idea is that some of the burden is taken off the public sector.” Dr Deguara said.
As the number of medical claims made to insurance companies escalate, many fear the reform plans when implemented will lead to a rise in the rates of premiums for private health insurance – a great possibility.
This newspaper has been informed that The Malta Insurance Association will shortly announce its official comments about the implications of the budget.
Meanwhile insurance companies are discussing the ‘possible’ outcome of the budget, but are unable to take any decisions until the government officially announces its plans.
Lino Ferris, general manager at Elmo Insurance, agents for Exeter health care insurance said the cost of claims has been rising over the years. It is also a known fact, he said that insurance companies earn little profit from health insurances. “Effectively,” he said, “if claims increase, premiums might also.”
Unlike other health insurances, Exeter policy holders are not offered cash benefits if they opt to use the government’s health service instead of a private one – a service they pay for.
Offered by some insurance companies, this incentive is referred to by Dr Deguara as an “abuse of the health system”.
“Some insurances encourage policy holders not to use the private sector for treatment, they offer them cash benefits for doing so (around Lm15) if they opt to use the services at St Luke’s,” explained Dr Deguara. “Insurances do this because if someone goes to a private hospital the cost is much, much more. This situation has to change.”
Walter Camilleri, chairman of Atlas Holdings Limited agents for PPP health care insurance said when the official government plans are announced the insurance industry will do its utmost to meet the country’s insurance needs.
“But one thing cannot be avoided; if the government’s plans require additional insurance services to be provided, or additional costs to be incurred, these must be funded out of the premiums collected,” said Mr Camilleri. “When these plans are made public the insurance industry will do its best to comply, both in the interests of the country in general, and of its policyholders in particular.”
Mr Camilleri said the government must have already envisaged the consequences of the reform plans and how to tackle them.
“For example how to avoid the situation where provident taxpayers or employers who protect themselves with insurance will be asked to pay for hospital treatment, while perhaps more affluent, but less provident, taxpayers or employers without insurance protection will have full – and free – access to hospital services,” he said. “The situation would be blatantly unfair and discriminatory, and I have full faith that solutions will be found.
In Malta private medical insurance companies do not cover all services provided at St Luke’s. However, according to the reform plans, Dr Deguara said insurance companies will have to cover services which they did not in the past.
“If a company is taking the risk to insure a person, then the insurance has to cover him for everything,” said Dr Deguara. “However we are not promoting the concept of insurance for everyone. We know there are a number of people who cannot afford medical insurance. We also know that if a person has already suffered a medical condition, he will not be able to get medical insurance cover for that condition. Therefore I cannot make it obligatory for everyone to have private insurance as there will still be a sector of the population who cannot be fully covered by insurance.”
People who have full medical insurance may need to use the casualty service which is not provided in the private sector. As the only Casualty Department is at St Luke’s or the Gozo General Hospital, insurance companies will be billed for medical treatment received by their insurers.
Curbing abuse in the health system, continued Dr Deguara, also meant stopping British tour operators making a profit out of Malta’s NHS.
“Some UK tour operators offer tourists an attractive package telling them for a minimal charge they will be guaranteed health insurance, and free health care during their stay in Malta,” explained Dr Deguara.
“These tourists come to Malta assured that they have private insurance. When something happens to them they call our ministry (as the insurance had told them to do, because they are informed that the UK government has an agreement with the Maltese government and are entitled to free treatment). What this means is that profit is being made by the private health insurance but the burden is being carried by us Maltese.”
During his budget speech Mr Dalli said the health service is a current problem. He said the details of the reform in the health system will be discussed with the social partners of the Malta Council for the Economic and Social Development so that together they will find the right balance between support and viability. Referring to health insurance, Mr Dalli said when the pension reforms gets under way, health insurance will be partly paid by contribution to social security as we know it today. Details on this insurance will be given at a later date.



 
 
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