DHA Reform Applicable To Individual Medical Policies from 1 Jan 2015
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DHA Reform Applicable To Individual Medical Policies from 1 Jan 2015

Dubai Healthcare Reform for individual policies effectively implemented early following DHA Circular

The recent circular number 2 of 2014 (PD 02/2014) issued on the 24th September 2014 from the Dubai Healthcare Authority about the coverage requirements for individual policy holders effectively brings forward the date of implementation for the reform for all new individual policies to 1st Jan 2015. The new circular specifies that all new policies (this does not impact renewal policies which only need to be compliant as from the first renewal date after 30-Jun-2015) must be compliant from the 1st Jan 2015.

This new requirement has caught out most insurers in the Dubai Health Insurance market and many are working out how to meet the deadline. At this time some insurers believe they will have a compliant local solution (Aviva, NOW Health, William Russell, IntegraGlobal, Morgan Price) while some major players in the market have indicated they will not be able to have the new plans and pricing in time, specifically Oman Insurance & Bupa Global and Allianz (partnered with Arab Orient Insurance Company).

The new Dubai Health reform requires that all policies meet the following requirements:

-          Annual limit of  150,000 AED

-          Area of cover: Dubai only (Emergency treatment within all emirates of the UAE)

-          Inpatient treatment covered with 20% co-insurance with a cap of 500 AED and annual aggregate cap of 1,000 AED. Hospital accommodation in Semi-private room with 2 or more beds is a requirement. It is important to note that most of the private facilities in Dubai do not offer semi-private rooms. International insurers, however, do already offer private room as standard in their policies.

-          Outpatient treatment covered with 20% co-pay.

-          Maternity covered up to 7,000 AED with 10% co-pay for normal delivery and up to 10,000 AED for medically necessary C-section and complications.

-          Essential vaccinations and inoculations for newborns

The basic mandatory cover does not have to include cover for dental treatment, healthcare services which are not medically necessary, alternative medicine such as acupuncture, acupressure, and homeopathic treatment. Insurers are however given the option to add these benefits to enhance plans if they wish to.

The major change for the providers offering Individual plans in Dubai is how they will underwrite the policies. Before the implementation of the Law, insurance companies were allowed to decline cover in case of applicants with major pre-existing conditions. As of 01-Jan-15 all of the insurers will have to provide cover for pre-existing conditions up to the limits of the minimum cover requirements. However, the insurance companies will be allowed to apply premium loadings for those members with existing medical conditions at the time of application.

It is worth noting that cover of chronic and pre-existing conditions must be provided after 6 months from the start date of cover. The insurers can still provide cover for these conditions as of day one, although this is not mandatory.

Some insurers have developed specific insurance products (Aviva for example with its Gulf Solutions plans) tailored for the Dubai market whereas other insurers are more inclined to update their already benefit-rich plans to ensure they meet the minimum cover requirements listed by the Dubai Health Authority.

In the longer term it is believed most of the major players in the market will offer compliant individual solutions and will not withdraw from the market completely, but this is not certain. The underwriting performance of individual plans based on new compliance requirements is hard to predict and in a fiercely competitive insurance market place where underwriting profits were already squeezed then the economic margin on individuals (which are prone to anti selection) may become too narrow or negative.

The process of the DHA reform is still ongoing for Corporates and individuals and many of the specific details of the reforms are still to be announced. In the longer term it is likely that the new regulatory framework will be beneficial for all involved in the industry.

The Background

In November 2013, The Dubai Health Authority (DHA) enacted a health insurance law (No. 11, 2013) that mandates coverage for all residents and visitors in Dubai, the largest Emirati state, with a population of around 2.2 million people. This change in law has been under consideration since 2009. Dubai follows the lead of other Emirates and Middle Eastern countries such as Abu Dhabi and Saudi Arabia who have long had laws in place regarding mandatory health insurance provision.  

The UAE government spends almost $10 billion on health care annually. According to the World Health Organization, this is 75% of the total spend on domestic health care — 25% is covered by the private sector. The new rules are intended to shift more of this financial burden from the government to employer.  The UAE used to be a destination where even tourists could get treatment nearly for free.

The Dubai Government started to implement rules in order to limit its financial exposure well before 2013

In May 2001 for example, a circular was issued stating that the government would no longer provide free medicines to expat cardholders.

As of April 2001 all visitors to the UAE and residents without a health card had to start paying in full for hospitalization and surgeries.

In 1999, public hospitals increased their fees drastically. For a consultation the price went from 20 AED to 150 AED.

In the Emirate of Dubai a large part of the population is made up of expatriates, most of these expatriates did not have insurance, thus the need to find a solution to finance medical care sustainable in the long term. 

Now that the new law is published and the precise obligations regarding coverage are clearer, employers should assess how the change will affect their current health insurance policies and plan accordingly, both for the issue or renewal of residence visas for their expatriate employees and to communicate the implications of the law to the rest of their workforce.

More broadly, employers may wish to review their health care policies to ensure consistency as far as possible throughout the Middle East. 


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