Insurance premiums for parents soar
MINIMUM COST HAS INCREASED AROUND 70% FROM DH2,500 TO OVER DH4,000, EXPERTS SAY
Minimum cost has increased by around 70% from Dh2,500 to more than Dh4,000 for elderly dependents |
The cost of minimum health insurance for dependent parents in Dubai has increased by up to 70 per cent for both new and renewable policies, Gulf News has learnt.
According to insurance brokers and industry experts, the minimum premiums, which prior to this were around Dh2,500, have now gone up to over Dh4,000.
Dr Ayham Refaat, CEO of Accumed, a medical coding and billing service provider, said: “The premium hike for dependent parents is in the range of 20-70 per cent for new and renewed policies.”
Prem Mulani, executive director of Pioneer Insurance Brokers, said: “The annual limit for a basic policy as per DHA [Dubai Health Authority] is Dh150,000. Some insurers have been offering this policy as [an] individual dependent parents’ plan, with the imposition of a six-month waiting period for any pre-existing conditions for first scheme membership and covered in full thereafter [as per DHA, emergencies are covered in full with no waiting period].
“However, most insured members in this category are aged 65 and above and tend to have one or more chronic preexisting conditions. At times, due to the changing lifestyle conditions and poor upkeep, this develops into an emergency and leads to in-patient treatment involving major surgeries.
“The result is that the annual limits of the policy end up being consumed,” said Mulani, adding that a growing number of such cases had prompted insurers to increase the premium.
Dr Sanjay Tolani, managing director of Goodwill World, which runs Goodwill Insurance Brokers, said: “When the basic policy was first launched, insurers were working on a potential risk pool and priced the product accordingly. But the risk pool and claims made were higher than they bargained for.
“Regulations stipulate that no one can be denied coverage in Dubai, But with most dependent parents having pre-existing conditions at their age, low premiums were not sustainable and had to be increased.”
The premium increase is being blamed largely on medical inflation and a high claims ratio. While medical inflation is the increase in the cost of health-care products and services, the claims or loss ratio is the difference between the premium collected by the insurance company from all its members, vis-a-vis the payments the insurance company has made to hospitals/clinics for the treatment of those members.
Medical inflation
Dr Refaat said: “An increase in the cost of health-care services has a negative impact on loss ratios, and is a direct reason for the increase of premiums by insurance companies. However, and for the past three years, medical inflation has been controlled by the regulator and capped at a maximum of the UAE inflation rate, which was as low as 1.75 per cent last year for example.
“So in reality, most healthcare providers either maintained their pricing, or in fact reduced it. Thus, there shouldn’t have been a negative impact on insurers from that side.”
He said policy coverage is a matter of concern.
“Many of the dependents’ policies are not designed to actually provide proper and relevant health-care services that are required by the seniors holding it, especially from a benefit and access-to-medical facilities perspective. Most of these policies are being purchased by residents for compliance purposes to renew residency visas for their parents, and not for a proper healthcare coverage.”
Regulations stipulate that no one can be denied coverage in Dubai, but with most dependent parents having pre-existing conditions at their age, low premiums were not sustainable and had to be increased.”
Dr Sanjay Tolani | Managing director, Goodwill World