Let’s get real on redeeming the National Insurance Board (NIB) fund, Minister Myles LaRoda

Let’s get real with National Insurance, Minister Myles LaRoda 

By Dennis Dames

Minister of State in the Office of the Prime Minister with responsibility for the National Insurance Board (NIB), Myles LaRoda, has been talking a lot lately about increasing contributions of employers and employees in order to stabilize the NIB fund.

That is an impractical proposition by itself in my view as the NIB fund is already in a very critical state, and employers and employees are presently paying a combined 9.8 percent!

How much higher does any sensible government thinks that that rate can realistically and practically increase without serious financial ramifications for the employer and employee?

The minister stated that the government is in no position to assist NIB financially.  What nonsense!

NIB’s problem has always been poor governance and a lack of prudent vision from its inception, in my humble opinion.

Too much political interference and sweetheart jobs over the decades have contributed significantly to the deplorable state of the NIB fund today.

Add the issue of inept management, over-staffing and political crony jobs, and we get an even grimmer picture of the depressing and ongoing disgraceful state of the rapid erosion of the NIB fund.

The government must find a way to become a partner in the rescue of the NIB fund, Minister LaRoda.  Let’s start with reducing the government’s travel budget, for example.

We live in the 21st Century and technological age where we can show some international leadership, and encourage and persuade our respective global counterparts to have more conferences online.  We can use the savings from the elimination of unnecessary state, political and sweetheart travelling to enhance the NIB investment fund.

Let’s stop acting brand new and talking fool like we just realize that more and more of us are living longer, and are thus putting a strain on the NIB fund by collecting our well deserved monthly pension checks.

Let’s get real on redeeming the NIB fund, Minister LaRoda.

Now is the time for the government of The Bahamas to show real political and executive leadership in the salvation of the NIB fund by letting the people know what the government’s financial contribution is going to be until the NIB fund is put in to a healthy position once and for all - for the future posterity.

...monthly National Insurance Board (NIB) contribution rates increase proposed: ...from 9.8 per cent to 10.8 per cent... ...It is unclear whether this will be split 50/50 between employer and employee

NIB 1% RATE RISE IS PROPOSED


By NEIL HARTNELL
Tribune Business Editor
and NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net


A RECOMMENDATION to increase the National Insurance Board (NIB) contribution rate by one percentage point to 10.8 per cent has been lodged with the Government, its director yesterday saying it was "lobbying" private health insurers for reduced premiums.

Algernon Cargill brought a stunned silence, and some gasps of disapproval, to the Bahamas Business Outlook conference yesterday when he confirmed the recommended contribution increase, arguing that it was necessary to fund an expanded National Prescription Drug Plan.

In truth the contribution increase had been flagged some time ago, so it should not come as a total shock to Bahamian employers and employees. The former, though, will again be looking at their financial position with concern, and wondering just how much of a chunk it will take out of cash flow and profits.

Meanwhile, Mr Cargill's assertion that NIB was pushing private health insurance underwriters, such as Colina, Atlantic Medical, Generali and BahamaHealth (Family Guardian), to reduce premiums and provide extra benefits, could stoke concerns in some quarters over a revival/continued move to a National Health Insurance Plan.

This is especially so given that Mr Cargill suggested NIB wanted to be the "first payer of private carriers".

Under the initial envisaged expansion of NIB's drug plan, Mr Cargill said it would cover illnesses/diseases such as epilepsy, sickle cell anemia, thyroid, BPH (Benign Prostatic Hyperplasia) and strokes.

"We envision the plan to cover all employees and self-employed persons, and voluntary insured persons," Mr Cargill told the Business Outlook. "We have recommended that the extra programmes by funded by an additional 1 per cent."

That will increase monthly NIB contribution rates from 9.8 per cent to 10.8 per cent. It is unclear whether this will be split 50/50 between employer and employee.
Confirming that NIB had been talking to private health insurers over its plans, Mr Cargill said plan participants would incur only a small co-payment.

He added: "We are lobbying for reduced premiums or additional benefits from your private insurance companies." Claims reimbursements were also said to be on the table.
"We aim for the day when no Bahamian has to choose between paying rent, paying for food or paying for medicine," Mr Cargill said.

Meanwhile, the National Insurance Board (NIB) saw contribution income increase to about $190 million last year.

Mr Cargill said NIB had recorded "remarkable" contribution income despite the economic recession. "In 2008, NIB's contribution income was $155.2 million. In 2009, toughest year so far of the recession, we saw growth of almost $5 million for a total contribution income of $160 million," he added.

"In 2010, we increased contribution income by a further $7.9 million, and in 2011 NIB's contribution income will increase to approximately $190 million. These advances can certainly be accounted as remarkable given the recessionary times we are in today.

Mr Cargill credited the increases to well planned strategies taken by NIB to encourage and facilitate contributions, as well as enhance the collection process.

According to Mr Cargill, administrative expenses for 2011 amounted to $40.5 million, and that as a percentage of contribution income, these have averaged around 21 per cent. He pledged that NIB would reduce this percentage "significantly" in the future, having "done a good job" in containing them in recent years.

On the benefit expenditure side, NIB is forecast to have paid out $182 million in 2011, a slight increase from $176 million in 2010. That represents a $30 million increase from the $152 million payments in 2008, with much of the rise coming from the unemployment benefit.

Regarding the unemployment benefit made available through NIB, Mr Cargill said: "As of January 3, 2012, 24,635 have received unemployment awards. We have also paid out approximately $35 million in unemployment benefits.

"From the time the benefit was instituted there have been steady and significant decreases in the number of claims. In 2009, awards totalled 14,071 out of almost 16,00 claims totalling $20.8 million. In 2011, we paid out only 4,500 claims awards out of almost 5,700 claims, totalling $6 million."

NIB generated $75 million in investment income in 2011, and Mr Cargill said its reserve fund had ended the year at $1.6 billion, up from $1.57 billion in 2010 and $1.5 billion in 2008.

Mr Cargill added that the National Prescription Drug plan launched in 2010 now has a membership of more than 70,000 persons, and provides prescription drugs to almost 14,500 active beneficiaries.

According to Mr Cargill, to date the drug plan has paid out more than 170,000 claims and over $3.3 million to participating private pharmacies.

January 13, 2012

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