UAE residents - and employers - are already paying higher premiums on their medical policies. Now, they may see co-payment percentage hikes from the current 10% or 20%. Image Credit: Shutterstock

Dubai: The percentage that UAE residents with health insurance have to pay on their medical bills could hit a steep 30 per cent as the cost of treatment and medicines rise, often sharply.

Insurance industry sources say that raising the ‘co-payment’ share to 30 per cent from the current 10- or 20 per cent is one way to manage the cost of claims. If this plan gets executed, and all of the big insurers providing health insurance stick to it, this would mean a steep – and painful - rise in the cost of accessing treatment for residents. It would come on top of the rise already in place on consultation and treatment rates charged by hospitals and clinics.

Already, this year, medical insurance premiums have risen quite significantly across the board. The ‘incentives’ that insurers used to offer through lower premiums during the Covid years are virtually absent now.

If the higher co-payment comes into play, it would immediately show up in the group medical cover policies that employers in the UAE take out on behalf of their workforce.

“As yet, insurers haven’t pushed co-payments to 30 per cent,” said Damien Walsh, Managing Director at the Dubai office of the consultancy AES. “However, if medical cost inflation continues at this rate year-on-year, then co-payments at 30 per cent will become the norm.

“I believe there should be a cap on employee contribution - no more than 30 per cent and perhaps Dh2,000-Dh2,500 on an outpatient basis. This must be relative (by) taking into account the employee’s salary.

Employers will need to apply cost-containment measures to keep the (annual health cover) premium under control.

- Damien Walsh of AES

Co-payment relates to the share of the medical bills that the individual will need to pay from his own pocket while the rest is done by the insurance company.

2024 policy renewals

Soon, employers in the UAE will start negotiations for renewing their staff health insurance group cover policy with insurers. So far this year, claims and payments on them have been on the higher side, insurers say, and there is the need to get employers to pay more as premium.

“If employers are not willing to pay more, then one of the options would be to raise the co-payment percentage,” said an insurer. “From what we are hearing, there is resistance from employers to paying higher premiums on the 2024 renewals.”

Options other than higher co-payment?

According to Walsh, there are ways to mitigate the higher costs for the insured.

It could be that there will be ‘no co-payments’ if the insured opt to visit hospitals that charge lower tariffs on their consultations, etc.

But ‘these measures will be taken jointly between employers and insurers to contain and share the cost (along with the insured),” said Walsh.

Healthcare inflation

Insurers agree that they cannot afford to ‘subsidise’ medical insurance policies any longer, and certainly not after their costs shot up dramatically in the last two years.

“Servicing a claim at the hugely discounted medical premiums of 2020-21 is no longer feasible,” said an insurer. “What hospitals charge on treatments/consultations are on the rise, we have no option but raise premiums.”

How much have inflation costs risen

“Medical inflation in the region - the cost of providing treatment to patients – is currently between 9-10 per cent,” said Walsh. “We have moved away from individual insurance plans primarily because of the even greater rises for individuals.

“We firmly believe that people should not be penalised when sick and needing treatment. A fair level of increase should be applied – but not exponential increases.”