New UAE insurance law: Will northern emirates get a wave of investments on specialty hospitals, clinics?
An additional 1m residents will come under medical insurance from January 2025
Dubai: With the UAE extending compulsory medical insurance for all private sector employees, the healthcare sector in the northern emirates could be in for a substantial increase in private sector led investments.
While Abu Dhabi and Dubai already have private sector hospital operators with entrenched presence, the same will now happen across the other emirates too, say industry sources. Currently, government-owned or government-affiliated healthcare operators dominate those markets.
“There have also been cases where residents in a northern emirate would seek treatment at a private healthcare facility in Dubai,” said a senior industry source. “Because there is the impression that doing so could lead to lower cost of treatment, or simply because there was no private sector option available in the other emirate.”
What will change now?
Effective January 1, 2025, all private sector employees in the UAE will need to have insurance cover provided by their employer. This requirement has already been there for some time in Abu Dhabi and Dubai, within and outside of their free zones. Group medical insurance will thus have to be provided by all private sector entities in the other emirates from next year. (The UAE law also applies to domestic workers.)
What this would do is bring, potentially, another 1 million residents across the northern emirates into universal health insurance coverage.
Many UAE insurers have been working on new medical insurance schemes to cover residents in the northern emirates
Government organisations there already provide such protection to staff, and lots of privately-owned businesses also have such schemes. But the January 1, 2025 cutoff means there can be no more exemptions henceforth.
“This step has been on the anvil for a long time and many UAE insurers have been working on new schemes to cover residents in the northern emirates,” said M. Rajendran, President and CEO of Burns & Wilcox MENA.
“This will be a relief to many who currently do not have any medical coverage. From an employer perspective, while it may increase their operational costs, in the long run it will help them have a stable - and healthier – workforce.”
How will medical plans be priced?
The mention about insurers working on creating new plans specific to the northern emirates is on point. Other insurers also say that recreating the same pricing and benefits available in Dubai and Abu Dhabi may not work. Apart from the basic plan, which ranges between Dh550-Dh750 annually, the others will need some extensive reworking, they add.
This initiative holds the promise of catalyzing increased investments in healthcare infrastructure, thereby enhancing the system and elevating public health standards across all the Emirates. By ensuring universal access to essential healthcare services through comprehensive insurance coverage, the resultant surge in demand for healthcare facilities is anticipated to attract fresh capital investments
For insurers, one thing is clear – starting January 2025, they will have a much bigger base for their medical insurance portfolio.
This is also what healthcare operators are eyeing. A bigger base of the insured will mean more people approaching healthcare providers for treatment consultations. And much more regularly at that, which has been the experience in Dubai and Abu Dhabi when universal coverage was introduced.
“This initiative holds the promise of catalyzing increased investments in healthcare infrastructure,” said Dr. Thumbay Moideen, founder President of Thumbay Group.
What the new law does is integrate healthcare into a broader economic diversification strategy as part of the UAE's Vision 2030
When that happens, this translates into new hospitals, specialty care facilities and clinics multiply in the northern emirates.
“The implementation of medical insurance for all in the UAE marks a monumental shift towards enhancing healthcare accessibility and quality,” said Dr. Jamil Ahmed, founder and managing Director of Prime Health.
“It's a catalyst for increased healthcare spending, especially in the northern Emirates, (and) promising to elevate our healthcare system's infrastructure and services to new heights.”
Implementation of medical insurance for all marks a monumental shift towards enhancing healthcare accessibility and quality.
Look at the numbers
Any healthcare operator mulling an investment in one of the northern emirates must go over these numbers.
“With a population of 10.5 million in the UAE, approximately 9.5 million individuals have insurance, leaving around one million without coverage, primarily in the northern emirates,” said Dr. Raza Siddiqui, Executive Director for RAK Hospital and CEO of Arabian Healthcare Group.(The group is working on a new 200-bed hospital in Ras Al Khaimah.)
“In the absence of insurance, many companies failed to provide the necessary healthcare services. While some companies provided insurance, many did not, leaving a gap in access to proper care.
In the absence of insurance, many companies failed to provide the necessary healthcare services, leaving individuals to fend for themselves. . It's crucial to understand that when bringing in expatriates, regardless of their employment level, we bear a responsibility for their healthcare
“Often, individuals sought treatment from general practitioners at low cost but received inadequate care. There have been some incidents where individuals experiencing serious medical emergencies were only given basic pain medication, leading to consequences due to delayed proper medical intervention.
“It's crucial for us to understand that when we bring in expatriates, regardless of their employment level, we bear a responsibility for their healthcare. Unfortunately, until it became mandatory, this responsibility wasn't consistently met.
“Although there may be initial challenges with supply and demand, the new UAE Government decision presents a significant opportunity for investment in healthcare services in the northern emirates.”