A more sustainable health care system is possible in Malta and our health insurance providers consider Health Minister Louis Deguara's recent statements about public-private incentives to complement the present system (The Times Business, August 30) as positive indicators of government's commitment to act on that premise. For the market players and the public alike, it is a win-win situation. After all, tax reductions are always a welcome start.

The Malta Insurance Association (MIA) agrees that offering NI contribution reductions for private insurance holders will boost the health insurance sector as more members of the public will choose to benefit from this incentive. Such a scheme had become a regular item in the association's pre-budget proposals over the years and the sudden news that it is now being endorsed by the government in this coming budget was as welcome as it was unexpected. "Our members have always believed that private insurance could assume a very meaningful role, enhanced by government policy, in complementing social security medical benefits," MIA director general Anton Felice commented.

"Public-private arrangements, such as that proposed by the Health Minister, could seriously alleviate the burden from our social welfare system and also reduce the workload from public health care institutions. At the same time, it would reward insured individuals with greater choice and, more importantly, remove the discriminatory punishment of paying for medical care twice: Once through the national contributions and again for private insurance."

Private medical insurance automatically rewards you with the possibility of choosing where to seek treatment but even insurance products have their limits. Policy terms specifically state what treatments, procedures and conditions are covered. State health care does not. Private insurance cover excludes care in respect of chronic and pre-existing conditions, palliative and routine tests. Moreover, private insurance covers unforeseen illnesses and not long-term care, maternity care and screening programmes. Consider also that all local policies have limits on expenses.

"It is not likely for the state to be able to justify the withdrawal of these services. Private insurance policy is therefore hardly comparable to national insurance," Dr Felice said. By virtue of these differences, one can never be a substitute for the other. In considering such incentive schemes, private insurance schemes can only complement but not substitute state health care.

Insurance premia and NI contributions may seem similar but they are not the same. Purchasing private medical cover allows the individual to choose a distinct product and to enjoy benefits particular to that product. The premium varies as do the policy terms. NI contributions are totally dissimilar to this. Introducing tax relief at marginal rates on approved private insurance schemes is, of course, a very delicate exercise towards improved economic sustainability.

MIA is very pleased that the government is finally taking on this challenge but at the same time, it appreciates that details still need to develop through further consultation both with the public and with the market players involved.

• Mr Calleja is the communications officer for the Malta Insurance Association (MIA). The MIA is a non-profit-making organisation that represents the views and common interests of all insurance companies in Malta, both indigenous and foreign. MIA members write over 94 per cent of all life and non-life insurance business in Malta and account for a domestic premium income of approximately Lm122 million in 2006.

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