United Arab Emirates (UAE) Announce Compulsory Health Insurance For Expatriates

International private medical insurance and global healthcare analyst and report author Ian Youngman takes a look at the new health insurance rules in the United Arab Emirates (UAE).

Where?

Health insurance will be mandatory in all emirates.

The United Arab Emirates (UAE) is a federation of seven states. The seven emirates that make up the UAE maintain a large degree of independence:

• Abu Dhabi
• Ajman
• Dubai
• Fujairah
• Ras al Khaimah
• Sharjah
• Umm al Quwain

Currently, among the seven emirates, medical insurance is compulsory only in Abu Dhabi and Dubai.

When?

Compulsory health insurance will be a requirement in all emirates of the country before the end of the first quarter of 2023.

This time scale is, using experience of what has happened in various Gulf states: very unrealistic.

Premium Effect?

The Emirates Insurance Association (EIA), says that making health insurance compulsory in all the emirates will increase total written premiums, which are expected to reach USD13.6 million in 2023.

Regulations?

There are regulations and laws in force in the insurance sector, which is being updated in coordination and cooperation with the UAE Central Bank, and they will accelerate the pace of digital transformation and facilitate the provision of services smoothly and easily.

The competent health authorities in the UAE, including the Ministry of Health and Community Protection, and the private sector, including operating insurance companies and accredited health centres, are looking forward to linking medical records on a digital healthcare platform approved by all service providers.

The linking process is expected to be completed in the middle of 2023.The digital platform facilitates the exchange of medical information collected by healthcare facilities as well as insurance companies that provide medical cover. It centralises information about a patient and the treatment that they undergo, regardless of the place or time of the provision of the healthcare.

The federal healthcare digital platform will benefit all customers as well as service providers

Cooperation and coordination between health insurers and the Central Bank is proceeding at a rapid pace, including issues related to health insurance; discussing possible solutions to the high cost of healthcare in general; and the necessity of adopting a tariff system governing medical treatment costs.

Insurance rules?

The five states will use a system like that in Abu Dhabi and Dubai where it is compulsory for all citizens and resident expatriates to have health insurance either bought via their employer or direct.

The basic cover will be agreed and that is the cover that health insurers can offer to companies and individuals in completion.

Will this allow competition?

All locally approved health insurers will be able to compete as long as they offer the agreed cover.

We do not yet know if top up covers will be allowed.

The probability, but this is not certain, is that offshore cover will not be allowed.

Effect on local treatment?

The Abu Dhabi and Dubai systems are geared to treatment only within the UAE

Healthcare has improved locally massively in the last decade.

The case for insurance paid treatment outside of the UEA has effectively vanished.

Though the rules for the five extra UAE states have not been finalised, to meet the deadline it is almost certain that each state will use a carbon copy of the Abu Dhabi and Dubai systems so only allowing treatment within the UAE.

For medical tourism this will increase domestic UAE medical tourism, so mostly going to Dubai with some going to Abu Dhabi. It will decrease outbound medical tourism from the UAE.

Future potential?

As most Gulf countries have or are bringing in compulsory health insurance for locals and expats there must be massive potential for health insurers, right?

Local health insurers see massive potential for them as they have very close ties with regulators and politicians so can influence how rules are made. Making health insurance compulsory is massive.

But there are many players in the UAE including global players, partnerships, and local groups.

For the next two- or three-years insurers will do well mopping up new business,

But what happens when everybody has health insurance?

When the market is at capacity locals will still want to grow each year.

For international insurers what happens when you have climbed the mountain and got to the top? The only way is down.

So, and this may be controversial, I expect some global health insurers will see that once the bucket of potential is full, it may be a good time to sell the bucket to a local group and get out before increasing healthcare costs and competition eats into profits.