Recent statistics show that only 8 per cent of the Maltese population benefit from an extensive refund plan. What keeps this percentage low? Is it a matter of culture, product, general disenchantment with health insurance providers ...?
Yes, currently only around 8 per cent benefit from schemes that offer direct settlement possibilities, often on a full refund basis. This means that the remaining customers have a basic limited benefit insurance policy which may not cover the full cost of their medical expenses. There are a number of reasons why this is so. Firstly it has become a culture for most employers to insure their staff on a basic scheme only, mostly to fulfil their minimum obligations under prevailing collective agreements. A second reason is the public's perception of the cost of a full refund scheme.
I consider health insurance to be a necessity, and if one chooses to get insurance then buy a good one, preferably on a full refund basis. The cost of health insurance reflects current medical costs on the island and is certainly not prohibitive, given the peace of mind it creates. A single claim for common surgical procedures like appendicectomy, colonoscopy or hernia could be several times the cost of an annual premium paid.
Our future health is unknown and so are our future costs of treatment. An uninsured person would have to save up to cater for future eventualities. On the other hand, an insured person has converted the future unknown cost to a fixed and known cost (the insurance premium), enabling the person to enjoy his earnings with the comfort of health protection in place.
Many would argue that high medical expenses are harming your sector. Health insurers repeatedly blame lack of cost controls on medical tariffs and fees for their lack of competitive prices. Do you subscribe to this view? What remedies are there, if any?
The escalating costs of medical treatment do in fact affect the price of health insurance and pose a burden on patients who are uninsured. But allow me to outline some reasons why insurers are paying higher costs for treatment.
Medicine and medical technology are very dynamic. New treatments and equipment are expensive and as these are introduced in Malta insurers are faced with new costs for new treatments, which at some point need to be costed into the insurance premium. To take an example, the costs relating to advances in keyhole surgery are increasing due to the high cost of disposable equipment.
Furthermore, from year to year insurers are experiencing a marked increase in the number of patients who avail themselves of private healthcare. This trend comes as no surprise and probably will not change. Insurers suffer directly from this when the cost of certain procedures becomes too high by Maltese standards.
Insurers pay claims on the principle that costs incurred are fair and reasonable, and this is usually determined by reference to what is normally paid for the procedure both locally and abroad. The absence of local, up-to-date, official tariffs does not help in these cases and this also directly affects uninsured patients paying privately for medical services. We are also currently experiencing a nationwide changeover of currency to euro and it is important for insurers and patients to ensure that fees being charged for medical services are equitably converted.
I would say that over 95 per cent of health claims are settled without any problem but there are instances where insurers question whether a particular fee is fair and reasonable. Again, in most cases these differences are clarified and resolved if a particular medical professional fee is higher than the norm due to medical reasons. The scenario that hurts the industry occurs when there is no explanation for a particular high cost for a particular treatment and insurers have to pay the claim on the grounds of what they consider to be in line with the health insurance policy terms and conditions. It is fair to say again that these cases are an absolute few, but unfortunately are the ones that do most harm to the industry.
Prior to the presentation of the budget, Health Minister Louis Deguara suggested that there might be reductions from NI contributions for private insurance holders. How much of a boost would this be to the health insurance market if it ever materialises?
In Malta we have a situation whereby some people are paying for health care both through private medical insurance and through national insurance contributions. In my opinion, the minister's suggestion would be a welcome proposal to eradicate this anomaly. However, due to some exclusions, private insurance cannot be a complete substitute for national insurance. These include pre-existing conditions, chronic conditions and routine treatments. That is why MIA has on many occasions stated that private insurance can only have a complementary role in this scenario.
The reality is that while insurers have to fulfil their obligations under the insurance contract, their social responsibility is different from that of government. Offering incentives to buy private health insurance as complementary cover will definitely boost the industry and that is undoubtedly positive.
As yet, this suggestion has not been followed up. It is perhaps very early to comment further as no official proposals have been made public. While we encourage this proposal to be developed further, members of the insurance association are eager to participate in future discussions with government in good time before such measures are implemented.
A considerable number of employers are now buying group policies as benefits for their employees. Would it be correct to assume that these employers are buying the most basic cover (which often covers little more than partial private clinic expenses)?
It is fair to say that the majority of insured persons originate through some form of company-paid health insurance scheme. Normally the employer pays the applicable premium. As a starting point, this is to be applauded because at the end of the day the employees are the best asset of a company and their health and well-being should always be preserved.
From my experience, companies normally insure their staff on a basic scheme. This provides some insurance compensation but in most cases does not provide for full compensation. Very often it is left to the individual employee to fork out the uninsured portion of the claim. This does create some dissatisfaction for the employee, particularly when he was under the impression that he enjoyed a higher-ranking scheme.
It is a fact that individual premia for a group of persons are significantly discounted and such discounts could be enjoyed even if all the group were insured on a full refund scheme. The current trend is for employers to leave it up to the individual employees to decide whether or not to upgrade their insurance coverage. This is not ideal because the cost to the individual would be higher than if the whole group were on a higher scheme together, as from day one.
I would encourage employers and unions to move away from basic health insurance schemes to full refund schemes. This is most certainly a step which could be considered at the next renewal of the particular employee scheme.
Yes, currently only around 8 per cent benefit from schemes that offer direct settlement possibilities, often on a full refund basis. This means that the remaining customers have a basic limited benefit insurance policy which may not cover the full cost of their medical expenses. There are a number of reasons why this is so. Firstly it has become a culture for most employers to insure their staff on a basic scheme only, mostly to fulfil their minimum obligations under prevailing collective agreements. A second reason is the public's perception of the cost of a full refund scheme.
I consider health insurance to be a necessity, and if one chooses to get insurance then buy a good one, preferably on a full refund basis. The cost of health insurance reflects current medical costs on the island and is certainly not prohibitive, given the peace of mind it creates. A single claim for common surgical procedures like appendicectomy, colonoscopy or hernia could be several times the cost of an annual premium paid.
Our future health is unknown and so are our future costs of treatment. An uninsured person would have to save up to cater for future eventualities. On the other hand, an insured person has converted the future unknown cost to a fixed and known cost (the insurance premium), enabling the person to enjoy his earnings with the comfort of health protection in place.
Many would argue that high medical expenses are harming your sector. Health insurers repeatedly blame lack of cost controls on medical tariffs and fees for their lack of competitive prices. Do you subscribe to this view? What remedies are there, if any?
The escalating costs of medical treatment do in fact affect the price of health insurance and pose a burden on patients who are uninsured. But allow me to outline some reasons why insurers are paying higher costs for treatment.
Medicine and medical technology are very dynamic. New treatments and equipment are expensive and as these are introduced in Malta insurers are faced with new costs for new treatments, which at some point need to be costed into the insurance premium. To take an example, the costs relating to advances in keyhole surgery are increasing due to the high cost of disposable equipment.
Furthermore, from year to year insurers are experiencing a marked increase in the number of patients who avail themselves of private healthcare. This trend comes as no surprise and probably will not change. Insurers suffer directly from this when the cost of certain procedures becomes too high by Maltese standards.
Insurers pay claims on the principle that costs incurred are fair and reasonable, and this is usually determined by reference to what is normally paid for the procedure both locally and abroad. The absence of local, up-to-date, official tariffs does not help in these cases and this also directly affects uninsured patients paying privately for medical services. We are also currently experiencing a nationwide changeover of currency to euro and it is important for insurers and patients to ensure that fees being charged for medical services are equitably converted.
I would say that over 95 per cent of health claims are settled without any problem but there are instances where insurers question whether a particular fee is fair and reasonable. Again, in most cases these differences are clarified and resolved if a particular medical professional fee is higher than the norm due to medical reasons. The scenario that hurts the industry occurs when there is no explanation for a particular high cost for a particular treatment and insurers have to pay the claim on the grounds of what they consider to be in line with the health insurance policy terms and conditions. It is fair to say again that these cases are an absolute few, but unfortunately are the ones that do most harm to the industry.
Prior to the presentation of the budget, Health Minister Louis Deguara suggested that there might be reductions from NI contributions for private insurance holders. How much of a boost would this be to the health insurance market if it ever materialises?
In Malta we have a situation whereby some people are paying for health care both through private medical insurance and through national insurance contributions. In my opinion, the minister's suggestion would be a welcome proposal to eradicate this anomaly. However, due to some exclusions, private insurance cannot be a complete substitute for national insurance. These include pre-existing conditions, chronic conditions and routine treatments. That is why MIA has on many occasions stated that private insurance can only have a complementary role in this scenario.
The reality is that while insurers have to fulfil their obligations under the insurance contract, their social responsibility is different from that of government. Offering incentives to buy private health insurance as complementary cover will definitely boost the industry and that is undoubtedly positive.
As yet, this suggestion has not been followed up. It is perhaps very early to comment further as no official proposals have been made public. While we encourage this proposal to be developed further, members of the insurance association are eager to participate in future discussions with government in good time before such measures are implemented.
A considerable number of employers are now buying group policies as benefits for their employees. Would it be correct to assume that these employers are buying the most basic cover (which often covers little more than partial private clinic expenses)?
It is fair to say that the majority of insured persons originate through some form of company-paid health insurance scheme. Normally the employer pays the applicable premium. As a starting point, this is to be applauded because at the end of the day the employees are the best asset of a company and their health and well-being should always be preserved.
From my experience, companies normally insure their staff on a basic scheme. This provides some insurance compensation but in most cases does not provide for full compensation. Very often it is left to the individual employee to fork out the uninsured portion of the claim. This does create some dissatisfaction for the employee, particularly when he was under the impression that he enjoyed a higher-ranking scheme.
It is a fact that individual premia for a group of persons are significantly discounted and such discounts could be enjoyed even if all the group were insured on a full refund scheme. The current trend is for employers to leave it up to the individual employees to decide whether or not to upgrade their insurance coverage. This is not ideal because the cost to the individual would be higher than if the whole group were on a higher scheme together, as from day one.
I would encourage employers and unions to move away from basic health insurance schemes to full refund schemes. This is most certainly a step which could be considered at the next renewal of the particular employee scheme.