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36 percent rise in HIP will hurt many – Cooper

A 36 percent increase in Government's Health Insurance Plan premium would hit clients hard, a charity head warned yesterday.

Sheelagh Cooper, of the Coalition for the Protection of Children, said she assists subscribers who earn $300 a week - for them to pay an extra $57 a month would be a struggle.

She said means testing would be a better way of setting charges.

Last week the Ministry of Health announced the cost of the basic medical insurance plan's premium would rise to $299 a month, starting in April.

A Government actuarial report recommended an $87 increase which would have brought the monthly premium to $329, said Health Minister Walter Roban.

The Minister said it is likely HIP will rise again next year.

"At the present rate of loss, HIP will not be sustainable without either a significant increase in premium or a significant injection of funds from Government," Mr. Roban said.

"After reviewing the actuary report, the Health Insurance Committee proposed to close the loss ratio in stages and to review the plan over the next year as opposed to implementing the full actuarial recommendation during this upcoming year."

Mrs. Cooper said the $57 increase approved by Government would seriously impact her clients.

"Some of the woman who come to the Coalition earn $300 a week," she said. "For them an extra $57 a month for health care is a lot.

"Fifty-seven dollars can feed a child breakfast for a month; that is significant to these women.

"I understand that health care costs are rising but it is unfair to expect the people who earn the least to pay this."

She said unlike payroll tax, which is proportional, many poor people will have to pay the increased cost.

And she suggested that it be means tested in order to avoid penalising those who cannot afford to pay it.

The charity head pointed out that Financial Assistance has seen a marked increase in applicants and may be unable to cover everyone's HIP payments.

Last week, Minister of Cultural Affairs and Social Rehabilitation Neletha Butterfield said the number of people seeking financial assistance has risen by a third in the past year.

She told the House of Assembly that up to 1,400 Bermudians and their families are now dependent on state welfare as the economic downturn continues.

Yesterday, the United Bermuda Party called the hike another example of Government's fiscal imprudence.

"This extraordinary jump to $299 in HIP's monthly premium did not have to be as severe as it is, if the Government had exercised a modicum of responsibility with our tax dollars," said Shadow Health Minister Louise Jackson. "Minister Roban drew attention to this point with the remark that HIP would not be sustainable 'without either a significant increase in premium or a significant injection of funds from Government'.

"It is clear that despite unprecedented revenue windfalls in recent years -some $317.6 million between 2004 and 2009  the Government has chosen to shovel the HIP increases onto the backs of working Bermudians. When it should have set aside the resources for hard times it did not, and so there is no money today to provide a meaningful cushion for the people."

She added the 36 percent price hike for HIP will impact hard-pressed families and, particularly, seniors on fixed incomes.

It will also impact small businesses that have to pay half of it, she said. And she anticipated it could lead to lay-offs when the increase of HIP was coupled with the payroll tax increase.

"The bottom line is this: When many Bermudians need the Government to step to the plate for them, it's not there for them," she claimed.

During this Budget session HIP and FutureCare have seen their monthly premiums rise.

As of April 1 it will cost:

$299 to be covered by Government's basic heath care, HIP;

$300 for Government's comprehensive plan, FutureCare, for seniors admitted during phase one;

$600 for Government's comprehensive plan, FutureCare, for seniors admitted during phase two.