Mr. Speaker and Honourable Members of this House, I rise this morning to advise you that today I have gazetted the Health Insurance (Health Insurance Plan) (Additional Benefits) Order 2008.

Mr. Speaker, the order does not require Parliamentary scrutiny and outlines new benefits which will be added to the Government’s Health Insurance Plan (HIP).

The addition of these benefits will result in no additional increases to premiums for our HIP policy-holders.

Mr. Speaker, in response to a directive from me, the Bermuda Health Council, in consultation with the Department of Social Insurance, undertook a review and proposed a series of benefits that might be added to HIP.

However, they advised me that to ensure the financial viability of the Health Insurance Fund (HIF), the maximum anticipated cost of any new benefits must not exceed $2m.

Mr. Speaker, the figure of $2m takes into consideration deductions from the Fund for the claims back-log exercise; implementation costs expected over the next 12 months for automation of HIP functions; and the remaining amount owing in HIP claims.

As a result of their recommendation, the Government has added three new benefits to HIP.

Coverage for kidney transplants will be increased by $70,000, a basic dental benefit will be introduced and specialist visits for “medically necessary procedures” will be covered by HIP to an amount of $500 per client per year.

Mr. Speaker, Honourable members will be aware that the recently released Ombudsman’s Report noted concern about the amount reimbursed from the Mutual Reinsurance Fund for a kidney transplant.

At present, the Mutual Reinsurance Fund provides $30,000 towards a kidney transplant. As that relates to HIP, $30,000 was the total amount payable.

This in today’s climate is an unrealistic benefit for HIP policy-holders, particularly considering their financial status.

To address this concern, we are introducing a maximum HIP benefit of $70,000 towards the cost of a kidney transplant. This will be paid from the HIF as a Supplemental Medical Benefit. This supplemental benefit, when added to the Standard Hospital Benefit of $30,000, which is paid from the MRF, will provide a total benefit of $100,000 towards the cost of a kidney transplant.
This represents a significant improvement on the present maximum payout of $30,000.

HIP will also attempt to enter into an agreement with a few overseas service providers to establish a fixed total fee for kidney transplants.

Claims experience in the past five years reveals the maximum number of recipients for transplants in a single year is three. It is anticipated that the number may rise to five (5) given the new benefit.

We anticipate that the maximum annual cost of this benefit will be in the region of $350,000.

Mr. Speaker, the Government is also introducing a basic dental benefit for HIP policy-holders. We believe the estimated maximum annual cost of this benefit will be in the region of $600,000.

This estimate is based on the current premium charged by a local insurer of similar size for basic dental benefits.

Mr. Speaker, specialist services provided outside the hospital will also now be covered for a fixed annual amount of $500 for any “medically necessary procedure” that is not considered an office visit.

This benefit may be used towards eye surgery, internal medicine specialists, or other vital services currently excluded under HIP because they are professional services provided outside the hospital.
The medical cost of this benefit is difficult to estimate and will not be clear until we have the claims experience.

We believe that the cost of these new benefits can be absorbed by the HIF.

Mr. Speaker, HIP may have started as an insurance product when it was conceived, but the changes in our community in recent years have clearly shown us that its role must be more closely aligned with the social needs of our community.

The addition of these benefits responds directly to those that are most needing of the services.

Although these benefits will not address the complete needs of our seniors, they will have an immediate effect on their pocket books and their willingness to seek healthcare.

The implementation date of August 1st will allow us appropriate time to develop, consult and communicate the scope of the dental and specialist visit components of this initiative.

Mr. Speaker, as we approach the August 1st date, HIP policy holders and the service providers affected can anticipate a concerted public relations exercise to ensure that they are aware of the new benefits, how to access them and the process for reimbursement.

This is yet another example of this Government providing for the needs of those most needing in our community.

Thank you Mr. Speaker.

Minister of Health, the Honourable Nelson BA Bascome JP, MP on Friday 23 May 2008