UAE health insurance: Will residents pay higher ‘co-pay’ charges on their medical bills in 2024?

Dubai: The percentage that UAE residents with health insurance have to pay for their medical bills could reach a steep 30 per cent as the cost of treatment and medications rises, often sharply.

Insurance industry sources say increasing the “co-payment” ratio to 30 percent from the current 10 to 20 percent is one way to manage the cost of claims. If this plan is implemented, and all large insurers that offer health insurance comply with it, this would mean a sharp – and painful – increase in the cost of access to treatment for residents. It would add to the increase that already exists in consultation and treatment fees charged by hospitals and clinics.

This year already, health insurance premiums have increased quite significantly across the board. The “incentives” that insurers used to offer through lower premiums during the Covid years are virtually absent now.

If the higher co-payment comes into play, it would immediately appear on the group health coverage policies that employers in the UAE take out on behalf of their workforce.

“So far, insurers have not increased co-payments to 30 percent,” said Damien Walsh, managing director of the Dubai office of consultancy AES. “However, if medical cost inflation continues at this rate year after year, then 30 percent copays will become the norm.

“I think there should be a limit on employee contribution: no more than 30 per cent and perhaps between Dh2,000 and Dh2,500 on an outpatient basis. This must be relative (by) taking into account the employee’s salary.

Employers will need to implement cost containment measures to keep the (annual medical coverage) premium under control.

– Damien Walsh of AES

Copayment relates to the portion of medical bills that the individual will have to pay out of pocket while the rest is paid by the insurance company.

Policy renewals 2024

Soon, employers in the UAE will begin negotiations with insurers to renew their staff’s group health insurance coverage policy. Claims and corresponding payments have been higher so far this year, insurers say, and employers need to be made to pay more as premiums.

“If employers are not willing to pay more, then one of the options would be to increase the co-payment percentage,” said an insurer. “From what we are hearing, there is resistance from employers to pay higher premiums in 2024 renewals.”

Options other than a higher copay?

According to Walsh, there are ways to mitigate the increased costs for policyholders.

There may be no ‘co-payments’ if the insured chooses to go to hospitals that charge lower rates for their consultations, etc.

But ‘these measures will be taken jointly between employers and insurers to contain and share the cost (along with the insured),’ said Walsh.

Health inflation

Insurers agree that they can no longer afford to “subsidize” health insurance policies, especially after their costs skyrocketed dramatically over the past two years.

“Serving a claim with hugely discounted 2020-21 medical premiums is no longer feasible,” one insurer said. “What hospitals charge for treatments/consultations is increasing, we have no choice but to increase premiums.”

How much have the costs of inflation increased?

“Medical inflation in the region – the cost of providing treatment to patients – is currently between 9 and 10 per cent,” Walsh said. “We have moved away from individual insurance plans primarily because of the even larger increases for individuals.

“We firmly believe that people should not be penalized when they are sick and need treatment. “A fair level of increase should be applied, but not exponential increases.”

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