Dubai’s ‘basic’ medical insurance premium could increase



Any change in the basic plan could have a cascading effect on health insurance policies up the chain.
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Dubai: The minimum premium rate to buy a “basic” health insurance plan in Dubai could increase from Dh550, according to senior sources in the local insurance and health sectors. If so, it could be the first major increase in premiums for basic plans approved by regulators since their launch in 2014.

“From an insurer’s point of view, this is essential to prevent insurers from ‘subsidizing’ this commodity,” said Mustafa Vazayil, managing director of Gargash Insurance, one of the UAE’s leading brokerage firms. “As the premium for the base plan increases, it is expected that on higher benefit plans, annual premiums may experience reductions.”

It is not known at this point what type of hike is planned.

For a few years now, market sources have said that the current base rate of Dh550 on Dubai Health Authority sanctioned base plans should be increased. This was to ensure that the cost of insurance – even on basic plans – matched inflation in health care costs. It was in 2014 that Dubai introduced compulsory health insurance in the emirate, starting by covering organizations and their workforce and then expanding it to all residents.

At the time, DHA used selected insurers who could offer base policies at Dh500 or more as part of the “Essential Benefits Plan”. The people who took out these policies had annual coverage of up to Dh 150,000.

“Medical costs are still on the rise and the premiums charged should reflect this,” Vazayil has said in the past. “Insurers might try to sell policies at the prescribed base rate in the hopes of selling enough policies each year and making up for the low premium. But with several insurers offering the same thing, it was not becoming viable. “

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Mustafa Vazayil of Gargash Insurance: “Authorities are expected to increase the price of basic police in Dubai …”
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Dubai’s healthcare regulator recently cracked down on how these basic policies can be used and the benefits that flow from them. DHA reduced the number of drugs (including generics) that could be supplied from over 2,000 to around 700. (It subsequently increased that number to over 900 drugs after pharmacies and healthcare providers said another cheaper drug was not instantly available.)

In addition, he told insurers to stop supplementing base policies with “enhanced coverage” benefits. And to ensure that all enhanced DHA approved coverage benefits are sold for no less than Dh750 per year in premium.

Vikas Katoch, COO of Right Health, which operates 30 clinics in the United Arab Emirates, believes more changes could be made: “Renewals of even a basic health policy should be based on the use of claims by policyholders. And no policy should be sold. below the threshold of the stipulated minimum premium.

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Vikas Katoch of Right Health: “The minimum premium rate should be subject to variable factors such as pre-illness disposition, person’s age and pharmacy limits …”
Image Credit: Antonin Kelian Kallouche / Gulf News

The increase in the premium on the basic plans is a point on which insurers and providers of health services agree. But any future hike could face some resistance from companies, who would have to pay more for their collective coverage when renewing.


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