Employers cut staff insurance amid soaring health costs

FRIDAY, AUGUST 12: Employers are opting for cheaper medical insurance packages with less cover in a bid to cut the spiralling cost of healthcare.

The Bermuda Health Council has warned the cost of healthcare could hit $1.5 billion by 2020 — double the $628 million dollars spent in 2010, which was equal to 11 per cent of the island’s gross domestic product.

This equates to $22,600 per person a year, compared with the 2010 average cost of $9,734 per person.

Economise

Up to 15 per cent of costs were spent on overseas care, while private local providers took a 24 per cent slice of the overall expenditure.

The cost of prescriptions was seven per cent, while the Bermuda Hospitals Board accounted for 40 per cent of spending.

Martin Law, chief executive of the Bermuda Employers’ Council, said: “Insurance companies are now offering packages which are lower cost, there is no doubt about that, and some companies are having to consider that.

“Some are definitely saying they can’t afford the current packages and that they will have to get cheaper ones.

“That means employees may not get dental or a chiropractor — the ‘nice to have’ stuff — and will get a health package cut to a basic model. The ease of access to overseas treatment may not always be there, either.

“Healthcare is a big cost for companies and they have to look at ways of cutting costs.”

Mr Law added employees — who share healthcare costs 50/50 with their employers — were also feeling the strain.

He said: “The cost of healthcare is an issue — employers are concerned about attempts to reform the healthcare system basically because, at this point, it’s un-costed.

The Health Council’s projected figures for 2020 are based on spending continuing to grow at the rate of the last few years and on current population figures.

Up to 70 per cent of healthcare funding came from the private sector ($438 million), the rest ($190 million) from the public sector. Zane DeSilva, Minister of Health, has said the reforms of the National Health Plan will be “wide-ranging and profound”.

“As they are based on the core values of equity and sustainability, I have utmost confidence that they will bring about long-acknowledged, and much needed improvements in our health system.

“It will require all of us pulling together to contain the growth in healthcare costs and make the system affordable for all.”