Health insurance premiums to increase as new mandatory scheme announced
Health insurance premiums in the UAE are anticipated to increase following the announcement of a new mandatory scheme on March 18. Under this scheme, all employers must provide health insurance for their employees, including domestic workers, starting from January 1, 2025. This initiative aims to ensure comprehensive healthcare coverage for all residents and reduce the financial burden on individuals without medical insurance.
Industry experts suggest that the surge in demand for healthcare services due to the mandatory scheme will likely lead to a rise in insurance premiums. Avinash Babur, CEO of Insurancemarket.ae, emphasized the need for insurers to carefully adjust their pricing to maintain fairness and balance. He stressed the importance of gradual premium adjustments and transparent communication to prevent sudden financial strain on both employers and individuals.
Anas Mistareehi, founder and CEO of eSanad, predicts a significant increase in health insurance premiums in the UAE in 2024 and 2025. He draws parallels to historical precedents, such as the substantial growth in market size observed in Abu Dhabi in 2007 and Dubai in 2012 following the introduction of mandatory medical insurance.
Regarding the impact on family members' insurance, Mistareehi anticipates minimal effects, especially for employees with fewer than three children. However, adjustments in premium structures may occur to accommodate the new dynamics brought about by the mandatory scheme. Insurers will need to ensure fairness and balance in pricing to prevent disproportionate impacts on family coverage costs.
The introduction of the new healthcare scheme is expected to stimulate investments in healthcare infrastructure, leading to improvements in service quality and fostering competition, innovation, and advancements in healthcare on a larger scale.
In summary, the introduction of the mandatory health insurance scheme in the UAE is likely to result in higher premiums as insurers adjust to meet increased demand. However, efforts are underway to ensure that these adjustments are gradual and communicated transparently to mitigate any adverse financial impacts on employers and individuals. Additionally, investments in healthcare infrastructure are expected to enhance the overall quality of healthcare services in the country.
By: Sahiba Suri
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