Understanding the Factor Affecting Your Health Insurance Premiums
-
Upload
the-hr-observer -
Category
Business
-
view
124 -
download
10
description
Transcript of Understanding the Factor Affecting Your Health Insurance Premiums
Michel Boustani
Understanding the factors that affect your health insurance premium
Agenda
• The new Dubai law for mandatory health insurance – an overview
• Basic principles of health insurance
• The factors that affect your premium
• How to manage your health insurance budget
2
The new Dubai law for mandatory health insurance An Overview
UAE Healthcare Market
Healthcare Structure
MOH is responsible for private and public healthcare facilities across all 7 emirates.
Abu Dhabi high percentage of covered population was due to successful mandatory medical insurance which other emirates are considering to implement.
HAAD is responsible for healthcare administration in Abu Dhabi, DHA for Dubai, and MOH for other Emirates.
In Abu Dhabi and Dubai the medical insurance is mandatory, while it is voluntary in other emirates.
Healthcare in UAE is provided by Private and public providers. SEHA, DHA and MOH Delivers public healthcare services.
The administration of healthcare in UAE is complex, with different authorities administrating across different emirates and across different free zones within the emirates.
Source: The prospect group documentary (Healthcare in the UAE), Regional Research House – Shuaa Capital (MENA Healthcare Sector Report, 2012)
x x x
Administrator
Regulator
Medical
Insurance
Administration
Regulation
Law
MOH
37.5% 98% 30% % of Population
Insured
DHA/Private SEHA/Private MOH/Private
Services
Providers
DUBAI Abu Dhabi
Other Emirates
DHA
compulsory
HAAD MOH
compulsory Voluntary
4
- 98% of population is Insured
- 32 registered insurance companies
- Top 5 multinational brokers licensed
- Minimum product standards set
- All providers are following a unified coding system
- New control systems such as DRG and PBM to
control /limit abuse
- Introduced pay for quality
- Regulations and complaint system in place
- 1,250 HCP
- Attracted international providers Cleveland Clinic, John Hopkins …
- Population health statistics available
- Preventive programs and campaigns are being launched
- Affordable and good quality of health care available
Today
- 8% of the population was insured
- Low quality insurance products available
- Very few local brokers
- Government providers with no billing system
- No available statistics on population diseases
- Few reputed healthcare providers
- 950 HCP
- Quality of health care was poor
Abu Dhabi in 2006
Abu Dhabi healthcare market evolution
UAE Healthcare Market
5
The UAE healthcare strategy is to become a preferred destination for domestic patients and a hub for global medical tourists seeking high quality & cost effective procedures & treatments
Dubai Health Insurance Law
The initiation & implementation
• Signed into law in Dubai on 24.11.2013, effective in February 2014
• Minimum healthcare benefits are defined by Dubai Health Authority (DHA)
• Comprises two types of permits:
o Permit to conduct health insurance business in Dubai (43 companies)
o Participating Insurer, authorized to sell the Essential Benefits Plan (7 TPAs)
• Cost of insurance to be paid by employer or sponsor, not to be passed on
to the beneficiary
• Responsibility to obtain health insurance:
o Government of Dubai for UAE Nationals
o Employer for his employees
o Sponsor for people sponsored by him
o Visitors, further instructions to be issued
6
Dubai Health Insurance Law
Timelines for Implementation
Phase 1 Groups 1,000 and more employees
Phase 2 Groups with 100 up to 999 employees
Phase 3 Groups with 99 employees and less Dependents (spouses/children) Domestic workers
2014 2015 2016 2017
Employer Size Implementation Deadline
Phase 1: 1000 + employees
31 October 2014
Phase 2: 100 – 999 employees
31 July 2015
Phase 3A: Below 100 employees
30 June 2016
Phase 3B: Spouses and dependants
30 June 2016
Phase 3C: Domestic workers
30 June 2016
All policies must be compliant with the minimum standards by the date of the first renewal after the relevant implementation deadline (subject to a maximum of 12 months from that deadline). In addition, for employees earning less than AED 4,000 per month coverage must be effected with a participating insurer!
01.11.2014
01.08.2015
01.07.2016
7
Dubai Health Insurance Law
PI Status
Insurance Companies with PI Status
Insurance Companies without PI Status
about 4 million (2016)
Employees earning =/< AED 4,000 per month, population about 2.2 million Employees earning > AED 4,000 per month, population about 1.8 million
8
Dubai Health Insurance Law
Essential Benefits Plan (Dubai Basic Product)
Unlike Abu Dhabi, there is no government subsidy. Hence the entire risk for the Essential Benefits Plan (EBP) is carried by the PI Company. Anticipated launch date is September 2014. Daman has already commenced operations for marketing of this product.
Eligibility • Anyone earning AED 4,000 or below per month must be insured with a PI company irrespective of
whether the employer procures a “basic product” or an “enhanced product”.
• Insurers are not permitted to deny coverage to individuals who fall under the basic pool.
• The Essential Benefits Plan (EBP) is devised for salaried/employed individuals. Hence, different to Abu Dhabi in that dependants are not mandatorily included. However, insurers can choose to sell the EBP even to dependants.
Index Rate • Each year the index rate for the EBP is set by the insurer based on the range provided by the
Dubai Health Authority (DHA). This index rate can be varied by + / - AED 25
• For 2014, the range provided by the DHA is AED 650 – AED 700.
9
An Overview on DHA Minimum Benefits
Dubai Health Insurance Law
First Essential Benefits Plan issued in Dubai
11
Basic Product Dubai vs. Basic Product Abu Dhabi
Basic Product Dubai Basic Product Abu Dhabi
Regulator Dubai Health Authority (DHA) Health Authority Abu Dhabi (HAAD)
Funding Fully funded by employer / sponsor Employee (sponsor) pays for dependents
Employers pay premiums on behalf of each employee and immediate dependents (spouse and 3 kids below 18 years)
Employee/ Individual sponsor pays for additional dependents
Government subsidizes product to cover the balance between premium income and total costs
Financing entity 7 insurance companies (Daman is one of the 7) Daman with the support of Abu Dhabi Government
Service delivery Network defined by Insurance Companies Private providers (vaccinations available within
public providers) Fee schedules have to be negotiated
individually between insurance company and provider
Network defined by HAAD Private providers, SEHA Fee schedules are regulated by HAAD with regular
increases
Eligible population Employees with Dubai visa earning less or equal AED 4,000 per month
Domestic workers Dependents (spouse, children), parents of
expats and small investors are excluded in Daman
Employees with Abu Dhabi visa and employees working or living in the Emirate of Abu Dhabi (with a visa from another Emirate) earning less than AED 5,000 per month without accommodation or AED 4,000 with Accommodation
Dependents of employees are employer’s responsibility
Parents of expats and small investors are included
General Comparison(1/2)
12
Basic Product Dubai vs. Basic Product Abu Dhabi
Basic Product Dubai Basic Product Abu Dhabi
Sum insured AED 150,000 AED 250,000
Co-insurance / deductible
20% co-insurance for out-patient 20% co-insurance for in-patient (with cap of
AED 500 per encounter and AED 1,000 annual aggregate)
30% co-insurance for pharmaceuticals with an annual limit of AED 1,500. Annual limit including co-insurance.
10% co-insurance for Maternity (AED 7,000 normal delivery, AED 10,000 C-section). Annual limit including co-insurance.
Fixed rate deductibles are also allowed provided maximum patient share not to exceed 20% for OP, minimum patient share to be AED 10
100% coverage for in-patient treatment Deductible AED 20 per physician consultation and
additional deductible of AED 10 for specialist. Deductible AED 10 for lab tests and AED 10 for X-
rays Deductible AED 500 for Maternity 30% co-insurance for pharmaceuticals with an
annual limit of AED 1,500. Annual limit excluding co-insurance.
Chronic conditions / Pre-existing conditions
Excluded for the first 6 months for out-patient and in-patient except maternity
Out-patient: Covered High cost diseases (In-patient): the following conditions are covered after 6 months: diabetes, cardio-vascular diseases, chronic pulmonary diseases, cancer of all types, neurological surgery, brain diseases, all types of delivery cases.
Emergency coverage
Within UAED; Covered at 80% Within UAE; Covered at 100%
Benefit Comparison (2/2)
13
What impact will the new DHA law have on the Dubai Health Sector
Impact of mandatory health insurance
Employer view
Employers need to prepare for higher OPEX to fund and sustain health insurance benefits over time.
Development of Daman enhanced plans Projection of health insurance cost [AED]
and % of payroll [Index]
Assumptions: Healthcare benefit cost 2014=100 Medical inflation 12% p.a. Payroll inflation 2.5% p.a.
Note: Total cost for employer is dependent on whether dependents will be covered or not
100
110
120
130
140
150
160
170
2008 2009 2010 2011 2012 2013
6% of health insurance benefits as percentage of total payroll in the UAE in 2011
Index
100125
141157
112
0
20
40
60
80
100
120
140
160
8
6
4
2
0
+57%
2018
8,8%
2017
8,0%
2016
7,3%
2015
6,6%
2014
6%
Index Burning Cost (Regional)
Index Burning Cost (UAE)
15
Basic principles of health insurance
Principles of Health insurance
The function of health insurance is to safeguard against financial loss by having the “losses of the few’ paid by “contribution of many” that are exposed to the same risk.
Healthcare Provider
Member Insured Insurer
Fund manager
Regulatory Body (DHA)
17
Principles of Health insurance
Total Health-Care Expenditures
How do the Insurance market actuaries calculate the per Capita Premium ?
Health Insurance Premium Calculation
18
Admin Cost & Profit
Insurance Premium per capita
Health Care Expenses per Capita
Principles of Health insurance
Policy Wording
• Contract that stipulates the general terms and condition
SOB
• Schedule of Benefits
Insurance cards
Health Insurance End-user Package
Health Insurance Package
19
Principles of Health insurance
Sample Card reflecting the benefits covered
Health Insurance Standard Cover
20
The factors that affect your premium
Source: Daman
Factors that affect your premium
Internal Factors
•Population Demographics
•Organization Culture (Health Oriented Org)
•Business Industry (High/low risk exposure)
•Type of benefits selected
•Member abuse
External Factors
•Medical Trends (inflation)
•Regulatory changes
•Health Authority change in tariffs
•Provider misuse
•Others (Pandemics, weather changes, pollution levels etc.)
22
An organization’s health insurance premium is dependent on it’s health expenditure’s utilization which is an outcome of the below factors
Summary of Ext & Int drivers for medical cost increase
Cost Drivers Description
• Providers deliver more services
• Negotiated multipliers with Providers and underlying pricelist for treatment according to Abu Dhabi Health Authority (HAAD)
• New medication and enhanced treatment options coming to the market
• Billing improvements
• Number of patients out of total membership utilizing the service
• Patient visit frequency at medical providers
• Overall gender and age distribution of insurance group including dependents changes year on year
• Total number of people insured within policy group
Bu
rn
ing
Co
st
(A
verag
e c
ost
per
mem
ber)
Ad
dit
ion
al
med
ical
co
st
driv
ers
Average cost per doctor visit
Utilization (visits per member)
More services
Provider rates & Mandatory Tariff
New treatments
Billing Enhancement
Patient rate
Visits per patient
Age distribution
Number members
Daman Trend estimate
Overall medical inflation is expected to increase at around 13% by 2015
Factors that affect your premium
23
Drivers of chronic conditions are the rationale to mobilise our community
Wrong nutrition and lack of physical activities are the main drivers of important chronic conditions like obesity and diabetes
Guidelines by US Department of Agriculture Center for Nutrition Policy and Promotion 1) Daman survey: Lifestyle healthiness of UAE population, 2011 N=2131 2)HAAD Statistics 2012 3) Press releases 2011/2012
Nutrition intake of the UAE
population is significantly below dietary guidelines1)
Nutrition
56% of the UAE population is
never involved in a vigorous
activity. 25% is never involved in
even a moderate activity 1)
Exercise
Obesity 2)
Diabetes 2)
14%
46%
13%
57%
Female expats 30-39 yrs. old
Female expats 50-59 yrs. old
Female nationals 30-39 yrs. old
Female nationals 50-59 yrs. old
Future Outlook:
Between 29% and 40% of school children are overweight or obese in the UAE3)
44%
32% Female expats 30-39 yrs. old
Female nationals 30-39 yrs. old
Factors that affect your premium
24
How to manage your health insurance budget
10 tips that helps you optimize your Health Insurance Budget
Tip 1: Select the right Insurer
Health Insurance is a complex piece hence it’s important to select the right Insurer that can optimize the use of your medical fund and contain it
When selecting an insurer the following criteria should be checked:
- Insurer’s healthcare rates at HCPs (Hospitals, Clinics , pharmacies etc.)
- Insurer’s rule engines & claims management system capabilities:
- Eliminate duplicate claims - Reject unnecessary treatments - Control dispatch of Pharmaceuticals
- Insurer ‘s BI, use data to analyze patterns , trends and challenge HCPs
- Insurer’s holistic solutions & tools that help empower HR & improve the health status of your organization
- Insurer’s understanding of Healthcare regulations
How to manage your health insurance budget
27
HR becomes “Health Guardian” - a driver for healthy change in the organization
Tip 2: Empower HR
Empower and inspire the HR function with tools, knowledge, calls to action and recognition. HR’s focus shifts from “administrator” to “health ambassador”
Daman
Knowledge
Resource
HS/DM
Member Empowered HR function
Daman inspires the HR manager
Daman supports Human Resources with the right tools and content
Daman provides calls to action to inspire their members
Health Support services
How to manage your health insurance budget
28
Tip 3: Know the health Status of your Org
Know the Health Status of your organization. Select an insurer that provides a 360 degree view on your organization’s health
How to manage your health insurance budget
29
Tip 4: Take health initiatives, understand your org health 1/2
Objective
Increase health awareness and early detection strategies
Detect illnesses before they reach critical stages
Describe sources of information and support
Conduct tests focusing on body composition analysis and future diabetes risk
Campaigns at your premises
Offer personalized reports for each participant and overall statistical report to HR
Service
How to manage your health insurance budget
30
Organize Health Screening Campaigns
Tip 4: Take health initiatives, understand your org health 2/2
How to manage your health insurance budget
31
Once you know the health status of your organization, take action by launching Campaigns
Tip 5: Provide Health Support, enroll members in HS programs
Asthma Program
Maternity Program
Cancer Program
Diabetes Program
Second Medical Opinion
Rheumatology Program
Health Screening campaigns
International Provider Coordination
In the UAE, almost 90% of deaths are caused by chronic lifestyle-induced diseases and injuries Prevention & Health Support programs will help improve the life style and reduce the cost Encourage your members to enroll in Health Support programs
How to manage your health insurance budget
Programs & Services
32
Tip 6: Become a health oriented organization 1/2
Awareness & tools
Create Platforms
Call to Action
Create Purpose
Metrics
How to manage your health insurance budget
33
Once you’ve benchmarked the health of your organization use platforms and strong calls to action to inspire your employees
Health Oriented Organization 2/2
High
Performance EMPLOYEES
HR becomes the driver for healthy change in the organization
Knowledge
Resource
HSD/DMP
HOO Tool
The platform
Empowered HR function
How to manage your health insurance budget
34
Support Human Resources with the right tools and programs that are unique to the organization
Tip 7: Introduce controls to your scheme
Did you know that 70% of the premium contributes for out patient expenses and more than 50% of those cases do not require physician intervention
Controls will help avoid the abuse of the few, that penalize the many
Type of controls:
- Co Payments
- Deductibles
- Limits
- Exclusions of non medically
related benefits
- Right selection of benefits
- Gate keepers (Telemedicine)
Don’t be too generous with benefits offerings the first year
How to manage your health insurance budget
35
Tip 8: Introduce Health Insurance Inductions
Myth that antibiotics cure coughs and colds are still rife, 90% of such cases do not require antibiotics
Inductions will help control your budget
• Benefit induction
• Explaining the benefits provided by the organization
• How to best utilize your benefits
• Creating awareness on how to limit abuse
• Unnecessary treatments that harm your health
• Use of second medical opinion
• Challenge your physician
• Giving health tips
• How to cure a simple cold
• When to consult your physician
• What necessary checkups to conduct
• How to improve your life style
How to manage your health insurance budget
36
Tip 9: Select a long term insurance partner
Health insurance is a costly employee benefit that delivers peace of mind and increases employees productivity and retention
Tip : Changing to an under priced insurer’s premium can
only harm your scheme
• Your insurer needs time to observe trends, analyze patterns,
take action and evaluate impact of benefits
• The premium is a result of the organization’s utilization,
changing insurers for lesser premiums doesn’t save you
money on the long-term and has a negative impact on
member’s experience
How to manage your health insurance budget
37
Tip 10: Buy your peace of mind
How to manage your health insurance budget
38
Thank you
Contacts: Michel Boustani Executive Vice President / Director Sales – UAE National Health Insurance Company - Daman Mobile: +971 50 8137019 Direct DXB: +971 4 4360211 Direct AUH: +971 2 6518299 Email: [email protected]