Private health poses new challenges (page 2 of 2)

For all intents and purposes, the recommendations have been discarded. The UAE seems to have put the entire agenda on the backburner - and that could well be perilous for the country in the long term. An estimated 75 percent of the UAE's health care-related expenditure is met through public spending, mostly from budgetary allocations. A paltry five percent is met by private medical insurance. Last May, for the first time, the UAE introduced fees for expatriates at government-run hospitals and clinics. Earlier, this was absorbed by the state if the expatriate had taken out a health card, which cost just 300 dirhams ($82).
"In these times, lessening the role of the state in health care should indeed be a strategic objective for the government," says a senior manager at Axa, the French insurance major. "But if mandatory health cover for all expatriates is brought in, it would have a debilitating impact on the employers, since they would need to take on the costs in most cases. And insurers will not be interested if the premiums are kept artificially low to suit the interests of the state."
According to one well-placed source at the ministry of health, the UAE has dropped all plans to introduce mandatory medical insurance for expatriates - at least for the time being. "We have gone over the various pros and cons, and feel that now may not be the right time," says the ministry official. "But that's not to say that this will be the case forever."
Cost-conscious. Under the present system, it is up to the discretion of each individual employer to decide whether or not he wants to offer health cover to his staff. While the bigger companies do have such a provision, the majority of the smaller and medium-sized companies do not. Most of the abuses have taken place in the contracting industry, where a laborer is paid a low wage and is not offered any sort of coverage by the employer. Sources suggest that the authorities may not want to burden local employers with additional costs at a time when the economy shows signs of slowing. There is also a feeling that more homework needs to be done to arrive at a consensus with insurers.
"There are a great many misconceptions on all sides as far as medical expenses protection is concerned," says a London-based insurer. "There is a need for greater awareness of health care provisions, particularly in a multicultural marketplace like the UAE, where there is no uniform standard. Medical costs are lower in the Middle East than in Europe and the United States, so many local corporations or individuals could find themselves paying unnecessarily high premiums."
However one looks at it, though, the Gulf states have lost out on a great opportunity at bringing about changes, and getting the insurance sector to play a far bigger role. With premium rates firming up on all classes of risk since the last quarter of 2001, this year may not be the ideal time to make major changes. So governments continue to play the waiting gain, much to the chagrin of private insurance providers. For more than three years, industry analysts have called for change, but governments keep stalling. Every day, the costs keep getting higher.