NHI restructures employee contributions

NHI restructures employee contributions

Revised cost of NHI set at $130 million


NASSAU, BAHAMAS – Higher income earners could contribute significantly more for National Health Insurance (NHI), according to a revised proposal released yesterday by the National Health Insurance Authority (NHIA).

In the previous model, employee and employer contributions were capped at $41.67 per month to meet the $1,000 annual premium for the standard health benefit package (SHB), a standard level of care guaranteed under NHI.

Under the revised plan, the authority has reduced the payroll contribution per month from two per cent to 1.5 per cent, and removed the $41.67 per month cap.

For example, employees earning more than $66,667, who would have equally shared a $41.67 per month contribution with their employee, would now solely pay $83.33 per month and their employer would not have to contribute to the scheme.

Similarly, an employee who earns $65,000 per months would contribute $81.25 per month towards the premium.

Their employer would contribute $2.08 per month.

An employee earning $45,000 would contribute $56.25 under the new restructure, and the employer, $27.08.

“Based on feedback that was received, two key themes emerged with regards to the sharing of the premium,” the authority said.

“Employees/individuals felt the two per cent income was too high, especially in light of the rising cost of living.

“Employers felt the aggregate burden was too significantly weighted towards them and higher wage earners could afford to contribute more.”

According to the revised plan, employees’ gratuities, overtime and bonuses will be factored into employee earnings so that “full wages are accounted for”.

This could result in employees who were previously captured in a lower income bracket, being categorized in a higher-tier, meaning increased contributions per month.

The new structure also proposed reduced contributions for employees in low-income brackets.

An employee who earns $10,000 per year — minimum wage — would contribute $12.50 cents, while the employer contributed the remaining balance to meet the monthly premium.

In the old proposal, employees earning minimum wage would contribute $16.67 per month.

The SHB would include an expanded primary care package and high-cost care program, which provides comprehensive coverage for select conditions or treatments, including a range of high prevalence diseases and certain cancers.

The NHIA also revealed yesterday that benefits will expand to include coverage for pediatric cancers for those under 12 years old.



While the Minister of Health Dr. Duane Sands projected last year that the universal healthcare plan was expected to cost $100 million per year, NHIA Chief Executive Officer Graham Whitmarsh advised that the plan is estimated to cost $130 million annually.

“The kind of mature program that we’re looking at here with the amended policy, we think is around $130 million, but we’ll refine that as we go forward,” he said in response to questions from reporters.

Whitmarsh said the authority to revised the framework for NHI based on the “extensive and valuable” feedback it received from stakeholders, through its consultative process.

The authority projects just under 171,000 people to enroll in NHI, 12,000 more than its original projections.

At current, there are approximately 50,000 beneficiaries enrolled in NHI, according to Whitmarsh.

Under the previous mode, it anticipated that employees would contribute $33 million; employers, $53 million and government, $20 million.

The recently restructured program would see employees contribute $26 million; employers contribute $47 million and the government cover $22 million.



The NHIA said the extensive proposals it received from the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) and the Bahamas Insurance Association (BIA), coupled with feedback from many other stakeholders and businesses, prompted the authority to revise the NHI framework to increase insurance coverage in the nation.

Whitmarsh thanked both the BCCEC and the BIA for their extensive and valuable feedback.

In its response to the authority’s original position paper, the BCCEC called on the government to indicate whether its financial commitment to the revamped NHI scheme will impact its objective to reduce and eliminate the deficit within the next three years.

The government has set a target to reduce the deficit gradually over the next three years.

It has projected a deficit of $15.1 million during the 2021/2022 fiscal year, which represents the end of its term.

Yesterday, the authority said it is confident that its financial projections and presentations to Cabinet are evidence-based, and insisted the proposal does not include an increase to the budget allocation for NHI.

“Increased business productivity in the long term due to a healthier workforce will also increase our potential GDP and improve our ability to pay off our national debt,” the NHIA said.

The NHIA has proposed to fund the program through government contributions; earmarked allocation of value-added tax (VAT) collected on private health insurance; an employer mandate, which is now expected to be launched on July 1, 2020; a sugary tax on unhealthy products, namely sugar-filled drinks; and funds from the risk equalization fund.

The BCCEC proposed instead that all businesses begin the employer mandate on January 1, 2021.

“While we appreciate that the BCCEC and others may feel this is still too much too soon, we believe 17 months from now is adequate time to prepare and must note the urgency of the situation we find ourselves in,” the authority noted.