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Rising healthcare costs concern for employers in UAE

Medical costs have rocketed in the UAE over the past five years, worrying employers because these costs eat up a significant share of companies’ budget.


Medical inflation in the UAE was 9.5 per cent in 2015 according to global health insurance broker Pacific Prime. The healthcare cost inflation has averaged 10 per cent in the past five years.




As a result, the average company’s cost of health insurance policies rose from AED1 million in 2010 to AED1.6m by the end of last year, a survey by research firm YouGov reveals.


Interestingly, the overall inflation in the UAE economy was much lower at 2.5 per cent last year, the figures from National Bureau of Statistics show.


The survey, commissioned by medical and travel security risk services firm International SOS, also shows that 84 per cent of people living in the UAE underestimate the country’s high level of medical inflation.


“The lack of initial medical advice and referrals to an audited network of clinics and hospitals drives up the number and the cost of medical treatment claims for insurance companies, and this inflates employers’ premiums year after year. It would be in everybody’s interest to take action to address this,” says Des Donnelly, Corporate Development Director, International SOS.


Starting June 30, all employers will be required to pay for health insurance for their employees, including those employing domestic staff in Dubai. This will also apply to companies with fewer than 100 staff, who were earlier exempt from the Dubai Health Authority’s mandatory insurance law.