Health Minister And BF&M On Health Premiums

May 2, 2019 | 30 Comments

It is “unconscionable” that BF&M would “attempt to blame their premium increase on the Government’s efficiency measures,” Minister of Health Kim Wilson said, while BF&M said that the “proposed Government reform is an exercise in reallocating funds and capping hospital funds, and fails to address the real drivers of the cost of healthcare in Bermuda.”

Minister of Health Kim Wilson Statement

Speaking at a press conference held today, Minister Wilson said, “I have invited you today in very unfortunate circumstances. It saddens me to have to highlight a particular company’s actions, but the impact to policy holders and the public is the most important thing to me at this time.

“I announced recently, and reiterated yesterday, that this year there will be no increase to the mandated standard health premium or to HIP or FutureCare premiums. However, I received from one local business a communication by BF&M stating that despite the Government making the hospital funding more efficient and not increasing premiums, BF&M is increasing their insurance rates significantly. The letter wrongly blames the Government for the increase.

“The letter is wholly misleading and contains serious inaccuracies that the public must be aware of. The standard premium rate and the mutual reinsurance fund premium are not a tax. They are actuarially derived premiums to pay for healthcare.

“There is no 225% increase on any tax. This is wholly untrue.

“The premium increases made by this company are a business decision based on profit margins and shareholder interests. The extra premium they are charging is not to pay for hospital care – the Government is protecting that – it’s to fund their profits.

“What I want to remind the public is that their health insurance premiums – in particular the mandated premium for standard health benefits – are not the entitled right of corporations. They are intended to pay for healthcare, not for profits.

“The change we are making in the way we fund BHB is ensuring that all of your standard health premium pays only for healthcare and its oversight.

“The new streamlined model for BHB makes hospital funding more efficient and takes out the middle man of claims adjudication. This reduces administration protecting healthcare dollars for healthcare.

“To be clear, there is no increase from the government, and it is unconscionable that BF&M who recently reported healthy profits, would attempt to blame their premium increase on the government’s efficiency measures. In fact, the government took extraordinary steps to avoid a premium increase.

“Policy holders affected by these increases must challenge their insurer and shop around if necessary. You are the costumer and you choose how to invest your health care dollars. Thank you”

BF&M Statement

In response BF&M CEO John Wight said, “We agree there is an urgent need to make healthcare more affordable and accessible to all Bermudians.

“We agree with the Minister of Health that the Standard Premium Rate [SPR] for the mandated package of insurance or to HIP or FutureCare is not going up in 2019. It is the distribution of the SPR that is changing.

“To be clear, the Mutual Reinsurance Fund [MRF] is embedded in clients’ Standard Premium Rate and we collect it on behalf the Government, passing it on for Government to fund aspects of health care. It is a fact that, as part of the changes to the distribution of the Standard Premium Rate, the MRF is increasing by 225%.

“The proposed Government reform is an exercise in reallocating funds and capping hospital funds, and fails to address the real drivers of the cost of healthcare in Bermuda – the third most expensive per capita in the world. Premiums will continue to increase as a result of our ageing population and the growing number of adults with chronic conditions

“We have an obligation to explain to our customers why their premiums are increasing. In our renewal letter to our clients, we explained that a number of factors impact their premium, including rising health care costs, overall claims experience, as well the Government’s proposed changes to the distribution of Standard Premium Rate.

“We think there is a better way to address the problems in our health system, which we would like to discuss with Government.

“We are committed to working with Government to develop thoughtful, comprehensive health care reform that achieves our shared goals of stabilizing costs, increasing accessibility, and driving better health outcomes.

“We want to work together with the Government to develop thoughtful, comprehensive health care reform that achieves our shared goals of stabilizing costs, increasing accessibility, and driving better health outcomes. We are in the process of presenting to Government viable alternatives and we are hopeful that those discussions will result in thoughtful solutions.”

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Comments (30)

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  1. char says:

    Serious incompetence on part of Government. They have no clue.

  2. 2 Bermudas says:

    She sounds like Curtis when he said he won’t tax rental income but then goes and increases land tax!! It’s essentially the same thing!!

  3. Paul says:

    How much more can we Bermudians endure from these talented ministers ?

  4. Question says:

    You can’t trust a single word this lot say.

    • Joe Bloggs says:

      Personally, I don’t trust any politician. It’s not just this lot

  5. Circus Maximus says:

    Argus, BF&M, And Colonial as collectors of health insurance premiums are effectively agents of the govt/BHB….essentially tax collectors! Govt just ended their agency and said”thanks for ripping us off since 1970…..well take it from here, thanks!!”

    Moral Hazard…..when you let people believe they will have a subsidy, or some other financial pocket stuffer , for ever. Forever just arrived for the big 3 rippers!!

  6. Islander says:

    BF&M will lose more than what they want to gain if they are the only ones raising rates. Plenty of other insurance companys to switch to;)

    • Cha says:

      They won’t be the only one. BF&M have just stuck their neck out first and the others will be watching the fall out. They will have to raise rates to remain solvent the only question is to what extent.

      They will be looking at what point it does not make sense to offer Medical coverage in Bermuda. These companies operate in other countries as well so they do not have to offer the coverage here if it doesn’t make economical sense.

      Frankly I would be more worried about them pulling out of the space entirely than just raising the rates.

    • Starting Point says:

      LOL as if the rest won’t match BFM. Get a clue.

  7. Vote for Me says:

    “We have an obligation to explain to our customers why their premiums are increasing. In our renewal letter to our clients, we explained that a number of factors impact their premium, including rising health care costs, overall claims experience, as well the Government’s proposed changes to the distribution of Standard Premium Rate.

    BFM – this appears to be double speak.

    The Standard Health Benefit premium is collected to cover all specified hospital based claims that BFM policy holders incur. Therefore if total hospital claims are say $50m, BFM has the funds to make payment.

    If I understand correctly, government is saying that they will now fund the hospital directly for all specified hospital based treatment. As a result BFM will no longer have any hospital claims to pay for specified claims. All Standard health Benefit Premiums should therefore be paid to the government, less a small admin fee.

    Is BFM saying that as a result of this change in funding, they will still increase the Standard Health Benefit premium?

    This is definitely a little technical but surely BFM can clarify.

    Note also that the BFM CEO was President of the Chamber of Commerce.

  8. Mark says:

    Hmmm, a successful and long serving business or a de-railed clown car. Who would you believe?

  9. Islander says:

    Deez insurers jus wana steal from de people while they sip on coffee and eat off of our money all day

    • warwick pond skink says:

      Clearly clueless to what the Goverment is doing here. That ignorance is what the PLP count on for their support

  10. steve says:

    Hey Kim, dont take responsibility for any of your failures or the failure of your party.

    This is PLP Rule #1 and its gettin really really OLD

  11. Richard A says:

    This is 100% the PLPs fault, just admit it, you have ZERO clue on how to stimulate the economy so you are simply taxing everyone to death. ADMIT IT! YOU ARE DESTROYING THIS COUNTRY!

  12. Sky Larkin says:

    I was in the corporate world and completely understand what John Wight is explaining. I think I know what the Minister is trying to say but I’m not sure…I’m also not sure SHE knows what she’s trying to say. BFM is constantly named one of the best companies to work for. I know insurance people who have moved from international to BFM just because of that. And John Wight is recognized all over the world as a great business leader…Companies are designed to be profitable (that’s how they EMPLOY people) and BFM is very, very fair and community aware.

    The PLP government has shown a level of incompetence that defies logic. I don’t really think they are incompetent but they do everything by politically expedient ways and most often with knee jerk ideas. They have done absolutely nothing useful. I’m absolutely certain their lack of any kind of ability to manage anything is driving up health costs. They spend millions on a bus schedule that doesn’t work. How many of you have been offered jobs in the NEW Fintech sector? The only reason tourism is even alive is because of the BTA. And on top of that they want to change a hundred years of pretty decent success running the capital city just so they can get their hands on the docks money.

    We keep electing these people for reasons that we choose….and for those of you who voted for them…you get exactly what you deserve. I am as born Bermudian as anyone but although I didn’t give up completely in July 2017, I sure as hell expanded my options. For the most part government doesn’t impact me…so I have no axe to grind. You get what you vote for…

  13. Joe Bloggs says:

    “To be clear, the Mutual Reinsurance Fund [MRF] is embedded in clients’ Standard Premium Rate and we collect it on behalf the Government, passing it on for Government to fund aspects of health care.”

    That sounds like a tax to me.

    “It is a fact that, as part of the changes to the distribution of the Standard Premium Rate, the MRF is increasing by 225%.”

    Ahh, selective language then. Because the PLP Government is not increasing the “Standard Premium Rate” must mean that health care costs are not rising and there is no redistribution of costs that insurers must meet.

    “When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.” Credit to Lewis Carroll

  14. Rocky5 says:

    Doesn’t BF&M have to file a justified proposed rate increase with The Bermuda Health Council BEFORE being allowed to implement it???

  15. Ringmaster says:

    The Minister and her army of spin doctors are the ones spreading misinformation. BF&M clearly state in their letter that the MRF which is the Government fund portion has increased by 225%. Minister Wilson tries to spin that into saying BF&M are blaming increased taxes of 225%. When will Mr and Mrs Bermuda say enough is enough of this out of control Government, loading more and more taxes and costs on everyday living?

  16. Why attack only BF&M Minister? says:

    We recently received a notice from one of the other insurers that our premiums would be going up significantly yet again.

    Why has the Minister chosen to publicly castigate BFM–maybe because they have the “gall” to call it as they see it and point out the rapacious Gvt fee hikes that Gvt tried to bury?

    Well done to you BFM. Not only are you one of the Island’s best companies to work for–but you are not afraid to call out an injustice which is impacting our people.

    Sorry Minister, you look very silly.

    How about attacking the incompetence of your Ministerial colleagues.

    I am disappointed Minister Wilson, I thought you were more astute than this media grabbing spectacle.

  17. Unconscionable????
    Do believe it.
    Whatever greats the P.L.P. implement, “THEY” will always find wrongness and foolishness to complain about.
    That is the way of THEIR approach to whatever is put in place for the benefit of everyone, especially for BERMUDIANS.
    Yup!!
    A FACT!!!

    • Anbu says:

      What has the plp done to benefit u? We’ll wait…….

    • question says:

      I’m sure you love paying the extra 1.45% tax they just added to everything.

    • Toodle-oo says:

      Substitute ‘the PLP’ for ‘OBA’ and there’s your flipside. But you’ll never admit to it.
      A FACT !!!

    • Bluenose says:

      Who is ‘THEY’?

  18. unconscionable says:

    No Minster–what is unconscionable is the way your Government continues to ignore the rights of some Bermudian citizens!

  19. LaV says:

    straightforward…you wouldn’t recognize a fact if it crawled out of your obnoxious a$$ and bit you.

  20. Vote no more says:

    Give them time they have a few more things they’ll be back pedalling on, all there circles are starting to collide..
    #burtcoinbkacklist

  21. Ringmaster says:

    After the debacle over the debit/credit card charges, can the public believe anything being communicated by the PLP?

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