By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Chamber of Commerce’s (BCCEC) chief executive says it is examining “the merits” of the Government’s proposed public health insurer, due to concerns about its impact on private underwriters.

Edison Sumner told Tribune Business that the Chamber had “concerns” about the Government’s proposed National Health Insurance (NHI) model, which envisages the creation of a state-owned insurer selling policies/coverage to Bahamians.

The structure proposed by the Christie administration and its consultant, Sanigest Internacional, would thus see the public insurer competing against the existing private health insurance sector - the likes of Colina, Family Guardian and Atlantic Medical - to sell the proposed Vital Benefits Package and other forms of NHI coverage.

“We are concerned about this whole issue with their being a public health insurer versus private health insurers,” Mr Sumner told Tribune Business.

“The concern is, looking at the approach between the Government-proposed public health insurer and the involvement of the private health insurers, and seeking to bring some balance to that.

“How is that going to work with them [private insurers] and their businesses? We’re still looking at the merits of it; the public health insurer and how that impacts on the private health insurance industry providing a vital service to their clients.”

Mr Sumner’s concerns thus echo those expressed by the Bahamas Insurance Association yesterday, which warned that the proposed ‘public health insurer’ would distort the market and potentially leave taxpayers “on the hook for hundreds of millions of dollars”.

The Association, in its latest blast against the proposed NHI scheme, warned that the Bahamian public would be exposed if the Government’s NHI cost estimates were wrong.

It warned that no private health insurer would participate in the NHI scheme if premium prices were not aligned with patient risks and costs, leaving the burden to be borne solely by the public health insurer.

And, if NHI’s costs were closer to the BIA’s $947 million estimate as opposed to the $400 million figure placed on the so-called Vital Benefits Package by the Government and its consultants, then the taxpayer might be called upon to fill a $500 million hole.

Lyrone Burrows, the BIA’s vice-chairman, said in a statement: “If the Government sets premium rates at unrealistic levels, and the checks and balances that come with having regulated insurance companies hardly apply to the public insurer, the market will collapse and taxpayers may be on the hook for hundreds of millions in overspending.”

Mr Burrows, who is also Family Guardian’s president, added: “The Bahamas would have disrupted its working private health insurance market and replaced it with a nationalised health insurance scheme that is unsustainable. This is in no one’s interest.”

The BIA argued that a publicly-owned insurance company would “distort the market for health insurance” and create poor outcomes for Bahamians.

In particular, it questioned how the public insurer would be regulated, given that in the private sector underwriters had to meet solvency requirements, undergo actuarial reviews and publish audited financial statements on time.

This, the BIA pointed out, involved corporate governance standards and regulatory oversight (by the Insurance Commission) that almost no government-owned entity has shown itself capable of meeting.

“A new private health insurer would be obliged to have good governance practices, and experienced insurance directors and executives, in order to be able to demonstrate to the Insurance Commission that it has the capacity to comply with the Insurance Act and regulations. It is not yet clear whether a public insurer will be obliged to meet these same requirements,” the BIA said.

“The BIA believes that the Commission may not be free to penalise a government-run public insurer for breaches of the law...... Similar reporting practices are either non-existent in the public sector or are routinely ignored.”