Two years on: How has Dubai's mandatory health insurance programme impacted the industry?

While health insurance is now mandatory in Dubai, some reports suggest that residents still find themselves caught out with medical bills they cannot afford. But this will change, according to Dubai Health Authority's Health Insurance Corporation

  
Dominique Entzminger, a physician assistant of family medicine, wears a stethoscope during an examination at the Codman Square Health Center April 5, 2006 in Dorchester, Massachusetts. Image used for illustrative purposes.

Dominique Entzminger, a physician assistant of family medicine, wears a stethoscope during an examination at the Codman Square Health Center April 5, 2006 in Dorchester, Massachusetts. Image used for illustrative purposes.

Getty Images/Joe Raedle

Efforts are being made to close mandatory health insurance loopholes which result in residents being left with large medical bills. 

An advisor for the Dubai Health Insurance Corporation, formed as part of Dubai Health Authority after a royal decree in May 2018, said the emirate is in the final testing phase of blocking visa renewals for those who are uninsured.

Instituting compulsory insurance had been “a huge uphill task” he said, adding that the number of insured individuals had increased by almost three million people since mandatory insurance was first introduced.

Saleh Al Hashimi, advisor at Dubai Health Insurance Corporation, explained that the decision to introduce mandatory insurance in the emirate dates back to 2013, and was done in phases, starting with companies of 1,000 employees or more. The final phase was rolled out in March 2017 when domestic health workers and sponsored family members were included in the policy.

Sponsors, whether a family member or employer, are now required as a bare minimum to purchase an essential basic policy, or EBP, available from one of 12 approved companies, typically costing between 550-750 United Arab Emirates dirhams ($149.76-$204.22) per annum, but it is at the discretion of the sponsor whether they purchase a more expensive policy to provide more extensive care, he said.

The EBP is aimed at those earning 4,000 dirhams or less per month, and sponsors are free to purchase more comprehensive policies for their staff from alternative providers, but only 12 approved companies are permitted to sell the EBP.

Official statistics show that 98 per cent of Dubai visa holders are now insured, and in emailed responses to questions from Zawya, Al Hashimi said the authority was aware of reports of individuals whose coverage has failed to meet requirements for serious illness cover.

“We are fully aware of these issues; the cases referred to are predominantly non-Dubai visa holders, or are cases where patients have exhausted their medical insurance limits. The minimum allowable annual policy limit for a Dubai visa holder under the EBP is AED 150,000, however there are policies available with limits upward of AED 5,000,000 if a member is interested in purchasing an enhanced plan.

“When we become aware of these cases [where patients do not have sufficient insurance], whether Dubai or Non-Dubai visa holders, we do assist to the best extent possible,” Al Hashimi added.

Checks being made

“It is enforced and the numbers clearly reflect the uptake. We have tied-up with GDRFA (Dubai’s General Directorate of Residency and Foreign Affairs) to ensure robust compliance. We are confident that we will further strengthen the existing system. There may be some instances, but on an overall scale, the scheme has been enforced.”

Issam Kassabieh, senior financial analyst in the research department at MENACORP, said ‘a frustrating economic cycle’ may have contributed to companies avoiding certain costs, including the renewal of mandatory health insurance policies.

But in a phone interview last month, Al Hashimi said if sponsors were not receiving fines for failing to insure their employees or dependents, it did not have anything to do with the economic climate. 

“We are in the final testing phase of linking renewals of health insurance with residence visas. The system will automatically flag cases of non-compliance. Presently, there might be some instances, but on an overall scale, it has been enforced. Nothing is 100 per cent fool proof,” he said.

“There are always people finding ways to bypass the system. Largely, everything is enforced.”

At present, those who fail to insure employees or dependents can receive a 500 UAE dirham ($135.15) fine per member, per month of non-compliance. 

“In 2013, less than half of Dubai’s population was insured, 1.8 million people,” he said. “What Dubai did was a plan to get 100 per cent of the people insured. You saw in the three and a half years that followed, 1.8 million people insured went up to 4.7 million people that are insured. It was a huge uphill task.

“In Dubai, currently, 99 per cent of the population of Emiratis and residents with Dubai visas are covered, as compared to the US which is 92 per cent and Germany 90 per cent,” Al Hashimi said.

“Dubai Health Insurance Corporation, under the Dubai Health Authority, is mandated to licence and regulate insurance companies.  The corporation ensures that these companies are capable of serving their policies effectively to help Dubai achieve its Dubai Standard of Care requirements.”

More providers coming?

Companies licensed to provide the EBP had to be capable of issuing 100,000 policies, said Al Hashimi and the 12 providers are listed here with more expected to be added in the early months of 2019 following a Dubai Health Insurance Corporation vetting process.

Menacorp’s Kassabieh said there were other changes being implemented by the DHA that may contribute to change in the health insurance sector at present and in the future, which were also highlighted to Zawya at the launch of DHA’s strategy to reduce healthcare costs in the emirate of Dubai, which was published in November.

“Basically, there will be stricter regulations on hospitals and clinics,” said Kassabieh. “There will be more monitoring and governance of prescriptions that go out. Plus introducing generic medication, versus the branded medication - they are much, much cheaper and they have the same or very similar effect to those branded ones, and this will also cost those insurance companies less.”

He also cited attempts to crack down on medical insurance fraud in the region in an attempt to stop healthcare providers overbilling insurance firms.

“Insurance fraud is very, very high in the region, I believe. They are trying to reduce it because it creates waste and it inflates the value of the industry. It puts a lot of pressure and risk on the industry,” he said. 

“There are certain growth rates that you will see, you will only see them once then you will never see them again, because they were unrealistic, they were caused by waste,” Kasabieh added.

Despite the huge upsurge in medical insurance proliferation in Dubai, Kassabieh said growth in the general insurance industry is unlikely to be ‘organic’.

“I honestly believe that the growth of the insurance sector is not going to be organic whatsoever. It’s going to happen through mergers and acquisitions. No one has the time or the human resources to go and grow their profile organically. Thin margins do not give you that much time,” he said. 

Takaful Emarat has recently acquired Al Hilal Bank Takaful Unit, from Al Hilal Bank and this was one of the first acquisitions we are going to see. This is the way to go.”

Another key change is in the strategies of insurance companies themselves: “I believe that certain insurance companies right now are trying to strengthen their cash position, even if it means less sales, less policies.

“Because what they want to do is they want to take policies that are not risky, which guarantee that (there) will be no claims, and that the amount of money gained, as the sale of the policy actually gets transferred to the net profit. So, they want high-margin policy instead of policies that are shrunken down with reinsurance.”

Returning to actions being taken by the Dubai government, there are also initiatives under way by the DHA to allow those who do not feel fairly treated by an insurer to provide feedback – a portal known as iPROMeS. Al Hashimi said a second portal was being created to allow those not being provided with adequate insurance to report it.

Zawya contacted the General Directorate of Residency and Foreigners Affairs in Dubai for comment, but was referred to the DHA.

(Reporting by Imogen Lillywhite; Editing by Michael Fahy)

(michael.fahy@refinitiv.com)

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