The introduction of compulsory health insurance and how it is likely to be rolled out across the UAE remains a very important issue for the country as a whole. It is also of particular interest to the regional insurance community. This article reviews recent developments on this front, including the publication of a draft Federal Health Insurance Law, which appears to envisage the establishment of a Federal Health Insurance Authority, and the establishment of a health insurance body in the Emirate of Sharjah.
Draft Federal Health Insurance Law
The potential establishment of a 'Federal Health Insurance Authority' has been signalled in the publication of a draft Federal Health Insurance Law, which was displayed on the UAE Ministry of Finance website until very recently. It is not clear if the draft law was issued for comment, nor what form of consultation (if any) is to take place on the new proposals.
A federal health insurance law will have country-wide impact and will apply to all seven emirates. The draft law envisages the establishment of a Federal Health Insurance Authority to regulate health insurance across the UAE. The new Authority will, in coordination with the Ministry of Health and other health authorities, set out procedures, and conditions for licensing healthcare service providers and for the accreditation, registration and qualification (including developing rules of professional conduct) of service providers in the health insurance field. There is no detail contained in the draft law as to how this will operate in practice, nor how it will sit alongside current health authorities undertaking regulation of health insurance (eg HAAD in Abu Dhabi). We would expect that full details would need to be issued in the form of implementing regulations under any new law that is issued.
The draft law will make health insurance coverage mandatory for both nationals and expatriates throughout the UAE. Employers will be required to provide basic health insurance cover for their employees (both expatriates and nationals); sponsors for persons under their sponsorship and the State will bear the cost for all UAE nationals (except where cover is being provided by an employer). It will also be mandatory for visitors to the UAE to have "emergency condition coverage" in place. The draft law requires that evidence of having the mandatory health insurance coverage will be a condition for the issuing of work or residence permits. Similarly, evidence of the emergency condition coverage will be required to obtain a visit or tourist visa. Again, the draft law does not contain details as to how this will operate or be implemented in practice.
Similar to the regimes in place in Abu Dhabi and Saudi Arabia, the draft law proposes a mandatory level of basic health insurance cover, with top-up cover to be available at the insured's own expense. The basic health insurance cover, as currently drafted, is similar to the basic cover mandated in Abu Dhabi and Saudi Arabia, with some extensions. For example, cover for organ transplants and dentistry are currently included, whereas they are excluded from basic cover in Abu Dhabi and Saudi Arabia. The UAE Cabinet will be permitted to add or delete healthcare benefits and services up to two years after the draft law comes into force. The funding model for the proposed regime is not made explicit in the draft law, although a co-payment obligation will be introduced for basic healthcare treatment that will be further detailed in the implementing regulations.
It is not apparent, at this stage, if it will be necessary for health insurance companies and other service providers to register with the new federal authority, and the requirements for doing so. In keeping with the Abu Dhabi legislation, the draft law provides that health insurance companies will not be permitted to own, manage or take part in managing facilities of healthcare service providers and vice versa (although exemptions may be made by Cabinet Resolution).
The draft law also envisages the new Authority setting up systems to allow for the collation of health information on the population. In parallel the Authority will be developing data protection rules in relation to such data.
It is not certain, at the moment, when the draft law will be issued and indeed in what form. A recent article, published on www.Mubashir.info, indicated that according to the Ministry of Finance Undersecretary, Younes Haji Khouri, it was currently being discussed at the Ministry of Justice. However, the draft law has recently been removed from the Ministry of Finance website. This may indicate that its promulgation has been postponed.
Sharjah developments
The government of Sharjah has recently announced that it is in the process of establishing the Sharjah Health Insurance Authority (SHIA). According to the Decree by His Highness Dr Shaikh Sultan bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Sharjah, SHIA will enjoy a corporate body status, and financial and administrative autonomy. The Decree is anticipated to regulate powers and functions of SHIA, which will cooperate with other stakeholders in Sharjah to adopt best practices in the industry. As yet, there is limited further information on the Decree or how it will interplay with federal requirements.
Third Party Administration developments
The UAE Insurance Authority issued the Board of Directors Resolution No. 9 of 2011 Concerning Directives for Licensing Third Party Administrators for Health Insurance and Organisation and Supervision of their Operations (the TPA Regulations), which came into force in January 2012, with a proviso that all TPAs should adjust their status by January 2013. The new regulations require TPAs to be set up in the UAE (and not in Free Zones) in the form of an LLC (with a 51% local Emirati shareholding), or branch of a foreign company (with a local national agent), and a capital of AED5m. It is not clear what steps the Insurance Authority is taking to register new or existing TPAs under the new regulations. It is also not clear how the Insurance Authority and local health authorities such as HAAD, are giving effect to the new requirements.
Comment on developments
The move to introduce compulsory health insurance requirements comes at a time when several GCC governments are looking at reforming healthcare financing. As is evident from developments elsewhere around the world (witness the introduction of 'Obamacare' in the US for example) healthcare finance is an extremely important issue for a country, and it is not always easy to get it right. In Saudi Arabia and Abu Dhabi, there are some precedents to learn from for the region. Until now, in the UAE, the initiatives to implement compulsory health insurance have been at the individual emirate level, led by Abu Dhabi in 2006, and followed up by Dubai's much-publicised plans in 2008/9, which remain on hold.
The developments discussed above now indicate an attempt at a federal level, and by another individual emirate, to implement a compulsory health insurance system, and to establish regulators for this purpose. Whilst having a regulated system is extremely important, the current proliferation of different initiatives and multiple regulators is of concern, particularly in a country with a relatively small population such as the UAE. In order to ensure a system that is well-suited to the needs of the whole population, and to allow the insurance market to participate and add value to the market, the authorities should be encouraged to take a unified approach to healthcare financing resulting in a homogenous system across the emirates, with health and financial services regulators fully engaged in the process. The current system could mean that consumers and insurers will need to be conversant with and comply with a variety of different systems around the UAE, including multiple registration requirements supervised by multiple regulators. There is a pressing need for government departments, health regulators, financial services regulators, employers and the insurance market to talk, to ensure that the UAE is provided with the basis for building a strong and lasting healthcare financing framework.
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