Alert over cost of health insurance

ABU DHABI // The soaring cost of health insurance is crippling employers and threatening job creation and salary levels, a new study suggests.

The overall cost of premiums rose from Dh9.9 billion in 2013 to Dh11.1bn in 2014, an increase of more than 12 per cent, according to the Insurance Authority.

Pacific Prime, the health-insurance broker, says premiums increased by 9.5 per cent last year and have risen by an average of 10 per cent a year for the past five years. In contrast, annual inflation is about 2.5 per cent.

The cost of premiums is also outstripping the cost of healthcare itself, which is estimated to have risen by about 9 per cent a year between 2008 and 2013.

“This is an increasingly serious concern to employers as a growing proportion of the total cost of employment,” says the study, carried out by the research company YouGov for International SOS, a medical and travel security risk services company.

The study also suggests that hardly any patients know how much their treatment costs, which is indirectly increasing the cost of insurance.

“Rising healthcare costs concern everybody,” said Des Donnelly, corporate development director at International SOS. “Healthcare inflation threatens job prospects, pay rises and bonuses.

“Unfortunately, few people seem aware of this, and those who are have little information to manage their own impact on this issue.

“The lack of initial medical advice, and of referrals to an audited network of clinics and hospitals, drives up the number and cost of medical-treatment claims for insurance companies, and this inflates employers’ premiums year after year.”

Most people choose a healthcare provider based on word of mouth and previous experience, but patients need more information to make an informed choice that also takes cost into account, the study suggests.

“Just because a hospital looks fantastic and has shiny equipment does not mean that health outcomes for patients will be the best,” said Dr Fraser Lamond, regional medical director at International SOS. “However, it does often mean that treatment costs can be sky high.”

“There is a real need to understand the quality and reliability of the health care itself first when selecting healthcare providers,” Dr Lamond said.

“That will lead to better outcomes for patients and lower costs for society.”

Mr Donnelly said the overall cost of premiums would increase this year as Dubai introduced compulsory insurance.

Dubai Health Authority also requires that existing medical conditions be covered by insurance policies.

“The DHA mandate is good news for individuals, of course, but it does mean that businesses will have to carefully consider the implications on costs, as they will have limited flexibility to spend on other things such as hiring, bonuses and salaries,” Mr Donnelly said.

“The cost of health insurance is rising faster than salaries and rents.”

The main solution to rising medical inflation, he said, was to “make sure individuals get the best quality health care for the best cost”.

“If we can get this cost under control, businesses would be able to expand salaries, pay bonuses and employ more people,” he said.

For the study, YouGov surveyed 700 expatriates and Emiratis.

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Health insurance needs to be affordable, says Indian expat

Umaima Tinwala, Indian expatriate living in Dubai, 38, media professional, was diagnosed with stage one of breast cancer in 2014 and finished treatment in 2015.

Ms Tinwala had to get a lot of her treatment in India and had to carry her medicine from India to Dubai.

“I never had health insurance from my company. My husband has his own technological firm, and he bought the insurance for me and my daughter. When we tried to renew it in 2014, we got a quotation for double the amount we had the year before.  We opted to not take the insurance as we realised that it was not covering eyes and dental and we were paying cash for this as our daughter needed it.”

“While one vial of medicine I needed cost equivalent to about Dh 3,000 in India, it cost Dh 12,500 in UAE. The cost is staggering. It’s completely unaffordable,” she said.

“Health insurance is compulsory but it also needs to be a little more affordable. If there is a government entity that provides insurance at a low cost, it would help,” she said.

“The smaller companies can’t afford the health insurance and they pass on the cost to the employees. The employees are afraid to bring this up as they think they can lose their job,” she said.

“We chose a company and mid-way through the policy they took out Zulekha Hospital and this was the most convenient hospital for us.