The United Arab Emirates (UAE) located on the Arabian Peninsula is home to 9.3 million people. Recently Abu Dhabi and Dubai have implemented health insurance mandates requiring employers to provide coverage for all treatments and care for Emiratis and expatriates.
The remaining northern emirates -- Sharjah Ajman and Fujairah are anticipated to emulate these laws soon as well. This raises the question of whether the relatively young insurance market in the UAE is prepared to meet the needs of these patients.
Despite having only 1.5 doctors for every 1000 people in the UAE the region is actually facing an oversaturated insurance market with more than 60 insurance companies. This creates a very competitive market with carriers charging employers less than the plan is worth just to participate.
This has led to claims exceeding premiums by 20 30 percent clearly an unsustainable system.To make matters worse in order to attempt to recover some of these losses insurance companies are negotiating prices with healthcare providers who in turn need to provide the same quality of care they always have but for less money.
Health Insurance Mandates
The new insurance mandates in the UAE set the prices for coverage at 800 dirhams ($220) in Abu Dhabi and 600 dirhams ($164 in Dubai) which also includes the commissions for brokers and the insurers. Roughly 20 percent of this money will be spent before it is used for treatment.
The remaining 80 percent -- 640 dirhams in Abu Dhabi and 480 dirhams in Dubai needs to cover the costs of office visits procedures and medications which is also unsustainable. This is a lot of pressure to put upon a health insurance system that is still in the infancy stage at approximately 40 years old.
Until difficult decisions are made or innovative products appear on the market that can improve the system with technology or IT solutions employers in the UAE should make sure they are getting the correct plan for their employees and not necessarily the best one. Ensure that the plan has the right coverage specific for the employee at an affordable price.