Premier says he was right to use Sinking Fund to restrain health insurance hikes, but now insured population will need to partially cover the new hospital pay package
It was nice while it lasted, but it looks like Government’s freezing of health insurance premiums is coming to an end.
Speaking to Bermuda Broadcasting about the latest fiscal update, Premier and Finance Minister David Burt said, “the reality is when you have a $38 million pay package for nurses and doctors and technicians at the hospital, that money has to be funded somehow.”
“… some of that funds will have to come from the insurance population of the country.”
“…we’re going to set out a fair prospectus on that, as we move towards Universal Health Care.”
Last year, Government amended legislation to allow the transfer of Sinking Fund monies – previously pegged for future budget deficits – to other public funds, at the behest of the Minister of Finance.
The Government Loans Amendment Act 2024, passed in March 2024, allowed Government to shift $30 million into the Mutual Reinsurance Fund. The Premier said at the time, “everyone in this country will save $540 a year”.
In this year’s Budget Statement, the Premier affirmed that dipping into the Sinking Fund allowed them to “freeze the Standard Premium Rate for the third year in a row”, but added that “this year, we are moving beyond freezes”.
Following the Premier’s announcement on Friday of higher-than-projected revenues and increased Budget surpluses for the last and current fiscal years, our Gary Foster Skelton asked about the use of reserves in the Sinking Fund.
The Premier said, “in the pandemic, we borrowed a significant sum of money to carry us over.”
“The economy rebounded faster, due to the successful implementation of our Economic Recovery Plan. That is why we had additional money in reserves that we were able to use to freeze health insurance premiums for three and a half years in a row.”
“As you heard the Minister of Health, that’s not going to be able to continue in perpetuity.”
With the health insurance freeze coming to an end, we asked the Premier if they could tell us a figure by which insurance would increase.
He responded that the Minister of Health will be putting out a statement, and “the Cabinet has not come to a final decision or conclusion”. He said that some additional monies will be needed from the insured population because “the $11 million in [the supplementary estimate] will not cover it all”.
The Premier went on to affirm that he made the right choice to utilise the Sinking Fund to prevent a health insurance hike.
He said, “it would have been irresponsible to increase health insurance premiums at a time when we had cost of living challenges throughout the economy, and inflation was running at a lot higher level than it is right now.”
“I chose the option to utilize the Sinking Fund because I knew that we were getting to budget surpluses, and those monies would not be needed.”
“It turned out that I was right.”
Premier Burt said the action saved money across the economy, because not only employees benefitted, but also businesses that did not have to pay the employer portion.
“That is what you do when you take a broad look at the economy”, he said, “and are making sure that you’re focused on… doing everything you can to reduce the cost of living and the cost of doing business in Bermuda.”
