Dubai: The minimum premium rate to buy a ‘basic’ health insurance plan in Dubai could in for an increase from Dh550, according to senior sources in the local insurance and healthcare sectors. If so, this could be the first major premium increase in regulator-approved basic plans since their launch in 2014.
“From insurers’ point of view this is much needed to stop insurers “subsidizing” this basic product,” said Mustafa Vazayil, Managing Director of Gargash Insurance, one of the top brokerage firms in the UAE. “As and when the premium on the basic plan goes up, the expectations are that on higher benefit plans, annual premiums could witness some reductions.”
It is not clear at this stage what sort of hike is planned.
For a couple of years now, market sources have been saying that the current Dh550 base rate on Dubai Health Authority-sanctioned basic plans should be hiked. This was to make sure the cost of insurance – even on the basic plans – was matching up to the inflation in healthcare costs. It was in 2014 that Dubai rolled out mandatory health insurance in the emirate, first starting with covering organisations and their workforces and then extending it to all residents.
At the time, DHA brought in select insurers who could offer the basic policies at Dh500 or above under the ‘Essential Benefits Plan’. Those taking out these policies had an annual cover of up to Dh150,000.
“Medical costs are always on the rise and premiums being charged should reflect that,” Vazayil had said in the past. “Insurers could try and sell the policies at the prescribed basic rate in the hope they sell enough policies each year and compensate for the low premium. But with multiple insurers offering the same, it was not becoming viable.”
The Dubai healthcare regulator has recently cracked down on how these basic policies can be used and the benefits that come with it. The DHA cut down the medicines (including generic) that can be provided from more than 2,000 to around 700. (It subsequently increased that to 900 plus medicines after pharmacies and healthcare providers said that alternate lower-cost medication was not instantly available.)
Also, it has told insurers to stop padding up basic policies with ‘enhanced cover’ benefits. And to make sure all DHA-sanctioned enhanced cover benefits are sold for nothing less than Dh750 a year premium.
Vikas Katoch, Chief Operating Officer of Right Health, which operates 30 clinics in the UAE, feels more changes could be brought in: "Renewals of even basic health policy should be based on claim utilization by policyholders. And there should be no policy that's sold below the threshold of minimum stipulated premium."
Hiking the premium on basic plans is one point on which insurers and healthcare service providers do agree upon. But any future hike could be met with some resistance from businesses, who would have to pay higher for their group coverage during renewals.