Bosland: BIA did not agree fully to terms on health insurance VAT claims

The Bahamas Insurance Association (BIA) did not agree fully to the terms set out by the government that will lead to increased costs for those with health insurance, who will now have to pay their own value-added tax (VAT) on health-related services, said the chair of the BIA’s health insurance committee, Marcus Bosland.

The government plans to stop insurance companies from recovering VAT on health insurance claims. Bosland said it was now likely – because that VAT cost would be passed on to the consumer – that there would be more cookouts to afford medical care.

He added that Bahamians are also more likely to choose healthcare abroad given the added expense locally, which could hurt local physician practices.

“When you’re talking about paying $10,000 VAT (on a $100,000 medical bill), people don’t have that kind of disposable income typically lying around,” Bosland said.

“And so in the past, the insurance company would pay it, because obviously we could deduct it going forward, that’s a burden that consumers would have to bear. It’s a really regrettable fact.

“We’ve been fighting a good fight as far as things go with the government, trying to convince them that this change is not in the public interest, but they have a different view and as much as we try to substantiate it, we’ ve not been able to.

“It is going to create tremendous hardship. I don’t know if the government fully recognizes how difficult it’s going to be for consumers, but people make a responsible decision to get health insurance whether through their employer or through their own means, and to add this burden to them in our view is unconscionable.”

The insurance companies contend that they have made a case that because their clients pay VAT on their premiums, they should not have to pay VAT again on their claims.

“That does not make sense to us,” said Bosland.

He added: “We cannot deduct the VAT that we pay on health insurance claims that belong to the client, and yet that same client will have paid VAT on the premium.

“We’ve always spoken frankly, directly to the Ministry of Finance always, and our position on this is well known to them and our concern about our clients and why we’re concerned about our clients is similarly well known.

“So, it is a little surprising to us that maybe the message that we’ve been trying to communicate has not been fully understood or fully heard, but our position has always been that this policy change imposes an undue burden on our policy holders and we do not support it. We’ve always been clear on that.”