BIU Meeting Report: Insurance Premiums

Last night’s BIU organized meeting about health insurance premium raises was attended by about 80 people including Union members, non-union workers, self-employed persons, and business owners.

On the panel were; BIU President Chris Furbert, Ed Ball of the BPSU, Gerald Simons of Argus Insurance, John Wight of BF&M Insurance, and Kathy Landy and Molly Burgess of the BIU.
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They heard BIU President Chris Furbert explain the BIU’s predicament in having to accept a 14% overall increase in Payroll Tax, watch as government raised its own monthly H.I.P. premiums by 24%, and see the Bermuda Health Council raise the cost of the minimum health package by 13%.

President Furbert pointed out that Union members as well as other workers had been hit by bans on overtime and shortened workweeks and could not therefore increase their incomes. He also offered that self-employed persons were often unable to increase their working hours or raise their prices.

Mr Gerald Simons, CEO of Argus Insurance, the largest of Bermuda’s indigenous health insurance providers countered Mr Furbert’s position with saying that “the cost of health care had been rising faster than the rate of inflation” and that this kind of cost rise is unsustainable.

Mr Simons continued that the situation now being faced was predictable and inevitable. That eventually, and with Bermuda now feeling the effects of a worldwide recession, costs had risen to the point where there would likely be difficulty in some payments being made. He gave specific examples of costs incurred by insurance companies such as $20,000 for a normal pregnancy and birth, and from $200,000 – $700,000 for a premature baby

With the session thrown open to questions, the general tone and thrust of the questions that came up indicated some underlying anger and hostility. One questioner was unhappy with the fact that there were no limits on the ability of the insurance providers to raise their rates. Another suggested that greater use should be made of cheaper generic prescription drugs; and that consideration should be given to using different, possibly cheaper, but still good overseas hospitals. Still another asked why Insurance providers needed to go on making huge million dollar profits.

Both Gerald Simons and John Wight, CEO of BF&M – another local health insurance provider – pointed out that every business needed to earn profits and provide dividends to its shareholders and investors. That without the promise of profits, there would be no investments, and thus no insurance company to provide needed health cover. Both insurance providers also mentioned that health costs overall can be decreased through diet and exercise.

Overall, the 80 people who attended, the questions that were put, the answers that were given, and the varied points of view that came into prominence; showed that there is a steadily rising response to the impact and knock-on effects of the Payroll Tax and other cost increases set in motion by the decisions taken by the assemblers of Government’s 2010/11 Budget.

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