Mandatory Health Insurance in the UAE

Abstract

This paper focuses on the UAE’s health sector, which is undergoing immense changes that are fuelled by the demand for effective, quality, accessible, and financially sustainable health care. In line with many Arab nations, the government has financed the UAE’s healthcare for a long time. However, as this paper confirms, this model is no longer tenable and sustainable. The introduction of the mandatory health insurance policy means that patients will take a more active role in financing their healthcare. The mandatory health insurance policy requires employees and employers to contribute to health through government-approved insurance schemes. Abu Dhabi has already implemented its health insurance plan while Dubai is currently implementing the policy. The government seeks to place a sustainable health-financing plan while at the same time guaranteeing the accessibility of excellent health delivery services.

Introduction

In the last decade, the UAE has experienced gradual improvement in health care delivery and medical services. In this health care improvement process, the push for mandatory health insurance has become a heated debate topic. The country has made great strides towards ensuring health insurance coverage for all citizens. Indeed, just like many other Gulf countries, health care is considered a free service that the government should provide for its citizens. Such a provision is well guaranteed in the UAE constitution (Alwan, 2014). Despite the protection of the right to health care in the UAE, the sector has faced numerous challenges that have affected health care delivery throughout the nation. Some of the problems related to the accessibility of health care for the large population of laborers in the UAE, lack of clinical and financial transparency on health care expenditure, and the insufficient sharing of the burden of the cost of health care for employers, especially the expatriate workforce, among other challenges. Following these challenges, the government rolled out a health care insurance reform policy, which gives more control and transparency over the healthcare sector in the country. The first emirate to adopt the requirements of the healthcare insurance refer was Abu Dhabi. In 2005, it legislated a mandatory health insurance policy for all the citizens within the state (Sonmez & Apostolopoulos, Tran & Rentrope, 2011). As will be discussed later, mandatory health insurance has now expanded to Dubai. Other regions are expected to follow the steps of Abu Dhabi and Dubai in the future. This paper discusses the mandatory health insurance policy, its formulation, implementation, and milestones in the United Arab Emirates.

Description of the Mandatory Health Insurance in the UAE

With more than 80% of the UAE population being the expatriates, providing health care had become increasingly costly ineffective to the extent of calling for enormous changes and an overhaul of the whole system (Koornneef, Robben, Al Seiari & Al Siksek, 2012). These changes required the legislation of a healthy policy, which focused on providing mandatory health insurance for all populations, both expatriate and local citizens.

The push for mandatory insurance began in the 2000s, following concerns about the inefficiency of the existing health care policies that had many loopholes, despite being backed by the constitution. Firstly, state governments managed and controlled the previous health care system while at the same time owning all health care facilities in the country (Alwan, 2014). Further, in the quest for providing free health care to all people, it became increasingly financially unsustainable and costly for the government to support the health care services in the end. Accountability and quality of care that patients were receiving were also a major issue that needed to be reviewed to make the health care system meet the quality expectations of an excellent health care system.

To address these issues, the Abu Dhabi emirate was the first state in the UAE to formulate a health insurance cover that made sure that all people were insured in the state. Under what was referred to as the comprehensive health insurance program, Abu Dhabi put forward a mandatory health insurance policy, which required the cost of health care to be shared between employers and employees (Sonmez et al., 2011). The policy became effective in 2005. It has set a good example for other emirates to follow suit. The second region to follow in the steps of Abu Dhabi was Dubai. In 2014, it finalized and began the implementation process of a mandatory health insurance policy, starting with the expatriates before moving to the native citizens. So far, drastic improvements have been witnessed in the healthcare sector. Employees and employers are sharing costs as a way of relieving the government of the increased healthcare costs that had previously been untenable (Al Awad, 2010). Further, both private and public healthcare sectors have become more efficient with a higher degree of quality and accountability, which were lacking under the previous system.

Justification of the Problem

The Mandatory Health Insurance Policy presents a major policy change in the United Arab Emirates. It is bound to attract much interest both from within the country and internationally. In a country where the foregoing perception is that the government should provide healthcare that is free for all, the policy is a tough direction for the UAE to move forward, yet it seems the only option through which the country’s health care can be more efficient and effective for both the citizens and expatriates (Jabbour & Yamout, 2012). Further, by lifting a large burden of financing of health care from the government to the people and corporate entities, the government can seek better financing options and priorities in the health care system (Benomran, 2010). Under the new policy, people have a more direct role in the financing of their health services. These changes may receive resistance or varied opinions, especially in a country where the government has been taking a more proactive role in funding health care. The effectiveness of this policy under the above prevailing conditions has been put into question and hence the reason why this paper covers the discussion on the policy’s effectiveness.

Literature Review

Al Awad (2010) traces the genesis of the UAE’s healthcare system from the early days of the country under the leadership of the late H.H. Sheikh Zayed Al Nahyan who ushered in the formation of the UAE as a federation, following the withdrawal of British Army, which had occupied the region for long. The country’s Department of Health supervised all healthcare amenities. Further, healthcare was offered for free for UAE citizens. For a long time, this strategy was supported by the wealth that the country was enjoying from its enormous oil resources. However, government financing became increasingly untenable and unsustainable (Benomran, 2010). Hence, there was a need for the government to revisit its health system. Also, due to the control of the healthcare system by the government, concerns, which were raised on the quality and access to healthcare, hindered the country’s progress to the better healthcare system as compared to other wealthy countries of the world.

According to Jabbour and Yamout (2012), the health care reforms that were being experienced in the UAE began with Abu Dhabi, which enacted a mandatory health insurance policy in 2005, under the comprehensive health insurance program, which stipulated the cost-sharing of healthcare between employers and employees. The reforms in Abu Dhabi have focused on redesigning health care financing, regulation, and provision to ensure better access, affordability, and quality of care delivery (Al Awad, 2010). However, health care insurance is still a debatable issue concerning whether the success of the health care reforms in Abu Dhabi can be replicated in other emirates, especially in Dubai where the Mandatory Health Insurance policy implementation is underway.

The healthcare system in Dubai and other emirates has been unable to address the healthcare needs of a population, which is increasingly facing many lifestyle diseases such as obesity and other related conditions such as heart diseases and diabetes. For instance, more than 66% of men and 60% of women are obese or overweight, a clear indication of the need for an overhaul of the healthcare system to address the rising health challenges that arise from such unhealthy populations (Alwan, 2014). Above all, the situation shows a trend in health challenges, which need more finances and resources to support. The mandatory health insurance policy seeks to address this gap.

Conclusion

The mandatory health insurance policy in the United Arab Emirates comes at a time when the world is experiencing increased challenges in healthcare provision in terms of financing, accessibility, and quality. The policy will address these challenges by transferring the cost of health care to employees and their employers. This strategy will open the door for a robust healthcare system where the financing will not be an issue or hindrance to quality and accessible healthcare. However, the concerns of whether such a policy is capable of addressing these challenges feature prominently in the UAE.

How the Mandatory Health Insurance Policy Became an Issue

The United Arab Emirates government has financed the healthcare system for a long time. Hence, the cost of healthcare has been minimal and in many cases free for both expatriates and local populations. With more than 80% of the population being made up of the expatriate population that has been rising yearly, it is evident that the healthcare financing structure is no longer tenable.

According to Jabbour and Yamout (2012), the country is experiencing increased population growth, amid the prospering economy, which is attracting expatriate populations in droves. It is expected that by 2018, the country’s population, which now stands at 9.8million people, will reach 12.4million, where foreign individuals will fuel the increase in population. Currently, the UAE nations make up only 11.5% of the population. This share is expected to considerably decrease in the coming years due to the on-going influx of expatriate populations in the country (Benomran, 2010). Such projections show the need for new approaches to health care that must be put forward to ensure the sustainability of health care provision.

In terms of the quality of care, the healthcare sector, which has majorly constituted public health facilities, has faced increasing criticisms where people feel that it has been unable to meet the increasing demands for health care services for the UAE citizens and expatriates. For instance, approximately 36.4% of all hospitals in the UAE are government-managed under the Ministry of Health. They account for more than 76% of the hospital bed capacity in the country, representing approximately 5800 beds of the 9100 beds that the country has (Al Awad, 2010). This number of beds is the lowest per population in the GCC. The situation is a call for concern. It puts into question the ability of the public health sector to cater to the healthcare needs of the population. In recent times, the private sector bed capacity has increased following the introduction of the mandatory health insurance policy in Abu Dhabi. However, there have been concerns, especially on the development of niche specialty medical hospitals, which currently only constitute approximately 11%, with the rest being general hospitals (Benomran, 2010).

With these statistical findings, it is evident that while the country has many hospital facilities as per the bed capacity, the area of specialty hospitals has been lagging. This issue has direct implications for the accessibility and quality of care for the patients in the country. Another major reason why the healthcare sector has been experiencing major challenges that have led to the call for mandatory health insurance is the lack of adequate personnel who can provide the required medical care services to the population. For instance, just like other GCC nations, the UAE faces a serious shortage of medical practitioners. Among the GCC countries, the UAE has the lowest number of doctors, nurses, and beds. For example, the ratio of physicians to patients in the UAE stands at 1.5, which is lower than the GCC average ratio of 1.75 (Alwan, 2014). Further, it also lags behind other developed countries such as the US, the UK, and Germany. This gap is a major cause of worry and a drive for a review of the healthcare providers and policies in the country. These constraints in healthcare have pushed the government to be at the forefront in terms of encouraging the private sector to expand its reach in the local healthcare market to fill the gap that the public health sector has been unable to fill in providing healthcare to the increasing population.

While the government had recognized the challenges in the healthcare sector, encouraging the private sector to take charge without proper policy frameworks was a hard nut to crack (Benomran, 2010). For instance, one would question ‘who would seek healthcare services from private hospitals, which would charge some fee while the same care was being offered in the public health facilities for free?’ Further, in the economic sense, who would invest in the private health sector, when there was no assurance of customers to flow? Who would ensure that such a business venture remained afloat? These measures would also not lead to reduced financing by the government in the healthcare sector. They would only address the problem of capacity in the healthcare sector (Al Awad, 2010). Other problems such as the shortage of doctors, financing, and accessibility would remain a major challenge, owing to the popularity of public healthcare, as opposed to the private sector-driven health care.

In the search for new approaches that would eliminate the challenges that the healthcare sector was facing, it was important for the government and healthcare stakeholders to take bold measures that would lead to a more robust healthcare sector. Such a plan would help the sector would finance itself and consequently lead to a better healthcare sector in terms of capacity and quality of care in the country. The discussion towards such drastic changes can be traced back to the late 1990s and early 2000s when the government of the UAE used the Abu Dhabi emirate, which was the first to roll out the mandatory health insurance policy. The design of the policy draws heavily from other countries such as Saudi Arabia and Oman, as well as developed nations, which have employer-financed health insurance policies and schemes. For instance, following in the footsteps of other GCC countries where healthcare is provided free of charge to citizens, the UAE government has provided two health insurance plans that cater to the expatriate and the local citizens as evidenced by Dubai and Abu Dhabi (Sonmez et al., 2011). In Dubai, the Dubai Health Authority implements and manages the overall mandatory health insurance policy. In Abu Dhabi, the Health Authority Abu Dhabi (HAAD), which is purely a regulatory authority, manages the mandatory insurance. Under the mandatory health insurance scheme, bosses are obligated to offer health indemnification to their personnel. The employer and employee are expected to co-finance the cover through a health insurance agency of the employer’s choice (Jabbour & Yamout, 2012). On the other hand, the health insurance cover for the UAE nationals is provided through what is referred to as the Thiqa system, which ensures that the nationals access healthcare at no cost through certified hospitals that are selected by the National Health Insurance Company-DAMAN.

The effectiveness of the mandatory insurance in the UAE is still a debatable issue since it is still its implementation phase, especially in Dubai, where the implementation began in 2014 and is expected to be rolled out completely by the end of 2016 (Sonmez et al., 2011). However, in Abu Dhabi, the system has been in place since 2005. So far, important lessons and implications for healthcare can be noted. For instance, following the implementation of the policy in Abu Dhabi, there has been a recorded increase of more than 40% in-hospital visits in both private and public hospitals. While such an increment in hospital visits does not indicate increased sicknesses, it is a clear indication that more people are willing to visit hospitals wherever they have any conditions that require medical consultation or treatment. Further, influxes have been witnessed in health insurance companies that are keen on benefiting from the mandatory insurance policy. More than 98% of the people in Abu Dhabi are now insured and hence a good indication of the success of the policy. Thus, based on these success stories, the mandatory insurance policy seems the best option for the future of the UAE health sector.

Conclusion

The mandatory health insurance policy in the UAE has been influenced by the desire for a more robust and effective healthcare system, which offers better financing alternatives, quality and safety of care, and overall sustainability. The country has followed in the footsteps of its GCC neighbors in the quest for ensuring a better healthcare sector. The mandatory health insurance policy has so far achieved great milestones, especially in the Abu Dhabi region, where it has been in existence since 2005. Such a success story is highly commendable. It offers important insights and solutions to the healthcare challenges that the UAE has been experiencing under its government-financed healthcare system, which is unsustainable in terms of financing and hence the many problems that have been witnessed relating to the quality of care and accessibility.

Evaluation of the Mandatory Health Insurance Policy in the UAE

Policies have become an integral part of societies. Many resources are dedicated to the policymaking process and implementation. The policies indicate key frameworks, which guide important projects and programs that are geared towards the improvement of the welfare of the people of a given country. The policies encompass many aspects, including financial management and the evaluation of the success of the policy in terms of handling specific societal problems among other factors. Evaluating the effectiveness of a given policy is a major issue in public discourse since it allows policymakers to assess whether a given policy has achieved its stated objectives. If the assessment exposes that the strategy has not attained its specified plan agenda, it then becomes important to identify the problems that are hindering the success of the policy implementation process. Consequently, the findings will help to make important suggestions on the solutions that can be put forward to ensure the achievement of the set objectives. In worst-case scenarios, the policy can be withdrawn altogether, especially when it aggravates the situation, rather than bringing the benefits that it had been expected to bring.

Policies are based on key goals, which are used as appraisal points for the victory or disappointment of a given plan. In the UAE, the mandatory health insurance policy is based on seven important objectives, which guide the implementation and evaluation of the policy. The objectives will be used in this section to evaluate the effectiveness of mandatory health insurance in the United Arab Emirates. The policy objectives can be narrowed down to:

  1. Guaranteeing coverage for all people
  2. Guaranteeing accessibility to quality health care
  3. Implementing timelines for the nationals and non-residents

Firstly, before the enactment of the policy, the provision of healthcare in the UAE was a major challenge, which faced major constraints related to financing and access to quality healthcare. Under the guidance of the Ministry of Healthcare (MOH), the government was in charge of financing health care, which was accessible and free of charge for all people, both expatriates, and nationals. In this country, just like many Arab countries in the GCC, healthcare is viewed as a right for all citizens, which should be provided free of charge. For a long time, the country has kept pace with this ideology (Benomran, 2010). However, as of 2009 when more than 80% of the population comprised foreign people, it had become increasingly unsustainable to continue offering and financing health care under the previous policy framework where the government was the sole financier. The situation required a better and more realistic policy. Such a policy would not only introduce new financing approaches, but also ensure a policy that would warrant quality improvement, diversification, and accessibility of care throughout the country for all people, regardless of their status.

Through the insurance scheme, the country has experienced drastic improvements in terms of quality and access to healthcare services. This situation indicates a good start for the policy. For instance, previously and even today, the country faces a challenge in terms of the number of specialties that are available to provide healthcare services to the citizens. With a ratio of 1.5, the country has the lowest ratio of medical personnel in the GCC, a situation that demands proactive approaches to addressing the issue of the quality of care, its accessibility, and the availability of medical personnel (Al Awad, 2010). However, while the national ratios of medical personnel show that the challenge is available, the situation is entirely different in Abu Dhabi where the mandatory health insurance policy has been in place since 2005. For instance, the healthcare sector in Abu Dhabi is provided largely by the private sector, which accounts for 64% of all the healthcare facilities in the country. Such statistical findings greatly show a great improvement in the healthcare sector, which was almost 100% controlled by the government, before the implementation of the mandatory health insurance policy. The government-managed health facilities are only 14 in the emirate. The private sector provides health care services to more than 2.5million people (Alwan, 2014). The influx of health insurance providers in the country shows that the policy has attracted increased investment in the current USD$10billion market in the country.

The steps towards quality care do not just involve the inclusion of the private healthcare facilities but also healthcare technology companies that can proactively guide the health sector towards improved quality in both governmental and private sector health facilities. In the 2013 fiscal period, the government spent a total of USD$16billion. This expenditure is indicative of the high cost of healthcare not only on the national revenue but also a clear indication of the government’s dedication to a robust and advanced healthcare sector that can provide quality to the level of other nations that have an excellent healthcare system (Al Awad, 2010). The government has not only encouraged private investment in the healthcare sector but has also has created important partnerships with major health technology companies and players from other regions of the world such as the USA and the UK to implement important projects that will guide the country on a path towards high-quality and accessible health care. For instance, the government has partnered with Cerner Corporation, healthcare technology, and IT company, to offer important technology and IT-integrated solutions to Abu Dhabi hospitals for improved efficiency, management, and the quality of care while adhering to the requirements of the regulatory framework of the mandatory health insurance policy (Jabbour & Yamout, 2012). Other major players in this approach to more collaborations and partnerships include John Hopkins, GE Healthcare, Partners Harvard Healthcare, and the Children’s National Medical Centre, which are all affiliates of major healthcare institutions from developed nations such as the USA and the UK. Such partnerships have been very important in guiding the establishment of strategies and frameworks that will lead to quality and accessible health care in the country.

The country is in the process of ensuring a less decentralized healthcare system where the government does not play an overbearing role. It has embarked on the creation of various regulatory bodies to ensure the smooth implementation and success of the mandatory insurance policy. For instance, in Abu Dhabi, the Health Authority of Abu Dhabi (HAAD) is the regulatory body that is tasked with the creation of the requirements for all health facilities, clinicians, health insurance, and health services while ensuring adherence to the policy at all times (Alwan, 2014). On the other hand, the Dubai Health Authority (DHA) is the regulator, as well as the operator of Dubai’s health sector. Just like Abu Dhabi’s HAAD, DHA is charged with providing health care policies and strategies. It also regulates and licenses health care facilities and personnel while at the same time developing medical education and research among other activities, which are geared towards improving the quality of care, providing alternative financing options, and ensuring accessibility of healthcare to all people in the emirate (Jabbour & Yamout, 2012). As per the guidelines of the mandatory health insurance policy, the UAE has made important strides towards providing quality and accessible healthcare to all people. This achievement is a key indicator of the success of the policy.

The second objective of the mandatory health insurance policy in the UAE focuses on providing coverage for all people. By coverage, the goal of mandatory health insurance is to ensure that 100% of all people, including expatriates and nationals, are covered by health insurance plans. In this case, the mandatory health insurance policy offers two plans through which people in the country will be insured (Alwan, 2014). The first insurance plan covers all expatriates. It requires the health insurance to be financed by employers and their employees through the co-financing plan where employees contribute a given amount of their salary towards their insurance while the employers finance the rest. The second insurance plan, which targets the UAE nations, is wholly funded by the government. To ensure that the insurance policy is workable and effective, the government formed the largest insurance company, namely the DAMAN (the UAE National Health Insurance Company) to offer specialized federal health insurance (Sonmez et al., 2011).

The company has been in existence since 2006 when the first mandatory health insurance policy was implemented in the UAE. The government-affiliated insurance company provides insurance solutions to more than 2.4million people in the UAE in both private and public sector organizations. The company offers its range of insurance solutions to both individuals and organizations. It is also charged with managing the government’s health care programs, including China, for the UAE nations and the Abu Dhabi Basic Plan, both of which target low-income earning expatriates (Alwan, 2014). Although it is the largest health insurer in the country, the DAMAN is not the only health insurance company in the UAE. Other private health insurance companies have come up to fill the gap that the DAMAN has left while at the same time taking business opportunities that the health insurance sector offers in the rapidly growing insurance sector (Alwan, 2014). The DAMAN has also contracted more than 2000 insurance companies to provide insurance services on its behalf.

The successful implementation of the policy is also a major objective. The country has made important strides towards universal coverage for all people in the emirates where the mandatory health insurance is in place, or the process of implementation. For instance, in the state of Abu Dhabi, nearly 98% of the nationals and residents have some form of insurance cover. In this emirate, the nationals are covered through the government-financed Thiqa while the residents’ insurance is provided through their workplaces (Sonmez et al., 2011). The government of Abu Dhabi has also provided schemes for the expatriates who earn less than AED4000, or approximately USD$1000. This group comprises the low-income earners. The government’s plan for this group is referred to as the Abu Dhabi Basic Plan, which is also managed by the DAMAN and financed by the government, the employer, and the employee. In Dubai, the mandatory insurance policy is in its implementation phase. It is being implemented in phases. The first phase that has already been accomplished focused on organizations that employed more than 1000 workers where companies were required to comply by October 31, 2014. Companies that have 100-999 employees have to comply before July while those that have fewer than 100 workers have until mid-2016 to provide coverage (Alwan, 2014). So far, 1.2million people in medium and large organizations have received coverage. This move is a clear indication of the increasing coverage uptake by people. The plan is in line with the goal of the policy to provide coverage for all citizens.

The implementation process has also witnessed challenges. Firstly, the overhaul of the healthcare system has been a major step for a country where the government has been the sole financier of healthcare for a very long time. For instance, providing a regulatory framework for health insurance has experienced many challenges. For a long time, it has been a big hindrance to the entry of many insurance companies due to the lack of an elaborate regulatory framework (Jabbour & Yamout, 2012). Further, many challenges have been witnessed in terms of streamlining the reimbursement processes in the country, especially for the nationals who are covered under the Thiqa platform. However, such problems are expected in a system, which is still in its early stages. As the problems are solved through the appropriate changes in the policy, the mandatory health insurance policy will be a very successful procedure, which will revolutionize the healthcare system for the better, thus leading to sustainable health care financing, accessibility, and quality of care.

Conclusion

The evaluation of the policy indicates that the policy has so far been a success. It is on the right track towards ensuring a robust healthcare sector that is marked by sustainable financing, universal accessibility, and quality healthcare services. The policy, which is based on three objectives, focuses on quality and access to healthcare coverage for all people. Its implementation process has been allocated specific timelines. The implementation process in Abu Dhabi has already been finalized. The expatriate populations are already covered by their respective health insurance plans. In Abu Dhabi, the various regulatory bodies that are mandated with the management and implementation of the policy are already in place. The implementation in Dubai is underway. The policy is expected to be wholly implemented by the end of 2016. Issues such as the influx of insurance firms and the increased investments in both private and public hospitals are all important indications that the achievement of the three objectives is going on as planned. Consequently, the mandatory health insurance policy has been a major success in the UAE.

Reference List

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Sonmez, S., Apostolopoulos, Y., Tran, D., & Rentrope, S. (2011). Human rights and health disparities for migrant workers in the UAE. Health and Human Rights: An International Journal, 13(2), 17-35.