Dubai companies opt for cheaper policies as mandatory health insurance widens

The roll-out of mandatory health insurance in Dubai has created more demand from private-sector employers, but their focus is on keeping a lid on costs, according to one of the UAE’s leading health insurers.

“We have seen increasing demand on reasonable business health insurance across SMEs and large corporate organisations for their employees,” said Richard Rilstone, head of intermediary, Oman Insurance Company (OIC)-Bupa, UAE. “However, with a varied mix of product offering available in the market, and some at quite low costs, some employers may at times opt for the minimum mandated benefits.”

The average growth rate of health insurance premiums in the UAE was about 20 per cent between 2011 and 2014, according to Insurance Authority data.


“We foresee an additional 5 per cent growth over the next few years due to inflation, changing claims trends and evolving purchase patterns as a result of regulations making health insurance mandatory for all residents,” said Mr Rilstone.

The estimated healthcare expenditure in the UAE is expected to rise to US$19.6 billion in 2018 from $14bn in 2013, according to an Alpen Capital report last year.

OIC and Bupa Global together recently launched a new tiered range of international private medical insurance products in Dubai aimed at meeting evolving demand.

“We conducted in-depth interviews with 3,000 people in six countries around the world including the UAE. Customers told us they want a simple product, where the levels of coverage and price are tiered so it’s easy to choose the option they want or need, based on a clear and distinct range and scale,” Mr Rilstone said.

The Dubai Health Authority allows a “co-insurance” or “co-pay” of up to 20 per cent on all services and up to 10 per cent on maternity-related medical care. While this is typically applied on outpatient care, more employers are applying a co-payment across the board to help keep premium costs down.

“Application of co-payment is considered as one of the measures to maintain healthy utilisation levels on claims. Employers have a choice to adjust the co-pay based on the performance of their health plans and premiums. These could be on purchase of pharmaceuticals, diagnostic and lab tests, wellness and vaccinations,” said Mr Rilstone.

However, out of pocket medical expenses for Dubai households – at 22 per cent of health costs last year according to the DHA – should be lower with the introduction of mandatory insurance.

“With 100 per cent of the residents being insured by mid- 2016, most of the healthcare expenses will be covered by health insurance plans,” he said.

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