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Barbados health insurance failing consumers

MEDICAL INSURANCE PLANS should protect families from financial hardship when someone gets sick, but they often fall short.

A 2023 Latin America and Caribbean Health Insurance Survey found that 42 per cent of Caribbean and Central American policyholders are surprised by out-ofpocket costs despite having coverage. Medical bills accumulate through deductibles, co-insurance, and claim denials - exceeding families’ savings and forcing impossible financial decisions.

Barbados faces these same systemic problems.

The Barbadian health insurance market systematically fails consumers due to structural design flaws and regulatory gaps, not isolated problems. Whether you are young and healthy, managing a long-term illness, or approaching retirement, these gaps affect every Barbadian.

One accident or sudden illness can bankrupt even insured families under current rules.

Understanding Barbados’ health care system

The health care system in Barbados creates two different realities. Public healthcare through polyclinics and the Queen Elizabeth Hospital - although designed to cover all medical needs - means long waits for specialists and limited diagnostic imaging. Private insurance purchases speed: specialist consultations within days, immediate MRI scans, and prompt treatment.

This ability to purchase speed is deeply unequal. Those with employer-sponsored group plans access affordable, comprehensive coverage that bypasses public system delays.

Self-employed workers (approximately 20.5 per cent of the workforce), independent contractors, and individual policyholders face substantially higher premiums for inferior coverage - often contributing for years without receiving benefits while remaining dependent on the overburdened public system.

Switzerland’s community rating

Switzerland uses “community rating” - everyone pays similar premiums regardless of employment or health status. Premiums vary only by age, location, and chosen deductible, eliminating the discrimination that forces Barbadian selfemployed workers to pay more. With only 8.7 million people - 30 times Barbados’ population Switzerland proves small countries can effectively regulate private insurance. Barbados should implement identical community rating, ensuring self-employed workers pay the same rates as employer groups, with income-based subsidies capping premiums at eight to ten per cent of household income. Implementation would require income verification and funding - potentially through payroll taxes or general revenue.

How insurance companies avoid paying claims Insurance companies routinely deny legitimate claims using narrow definitions and “not medically necessary” determinations. Common tactics include excluding pre-existing conditions through retroactive investigations, requiring difficult-toobtain prior authorisation, and denying out-ofnetwork charges when patients had no choice.

Research suggests insurers deny substantial portions of claims, with few patients appealing because illness leaves them without energy to fight (Commonwealth Fund, 2022).

Maria’s experience illustrates this failure.

The 40-year-old Christ Church teacher maintained employersponsored health insurance and purchased critical illness coverage for “extra security”.

When a severe stroke required two weeks in intensive care costing $175 000 - her critical illness policy paid only $60 daily, totalling $840. After her regular insurance processed claims, she still faced $18,000 in out-of-pocket costs for out-ofnetwork specialists, deductibles, and co-insurance. “I did everything right - two policies, paid every month for years - and I still nearly lost my home,” Maria said. Both insurers met their contractual obligations, yet she confronted financial ruin.

Eight months later, she’s still negotiating payment plans with collectors.

US independent medical review

The United States Affordable Care Act mandates independent external review of claim denials by medical experts unaffiliated with insurers. External reviewers overturn 40 to 50 per cent of insurer denials - proving a significant portion lacks medical justification (HHS, 2023).

When implemented, premiums increased only two to three per cent, far less than industry predictions (Kaiser Family Foundation, 2015). Barbados should establish an Independent Health Claims Review Board within the Financial Services Commission, funded through small per-policy fees, making it self-sustaining without burdening taxpayers.

The affordability crisis

Middle and low income families are trapped between bad options. Low-premium plans have deductibles so high that routine care remains unaffordable, while comprehensive plans exceed monthly budgets. High-deductible plans require families to pay thousands out-of-pocket before insurance covers anything, and co-insurance means they still pay portions of every bill.

Germany’s income-based caps

Germany caps total annual out-of-pocket costs - everything beyond premiums, including deductibles, coinsurance, and co-pays - at just two per cent of gross household income for routine care and one per cent for chronically ill patients (German Federal Insurance Office, 2023). Once reached, all further care is free. This ensures healthcare costs scale with ability to pay rather than imposing fixed dollar amounts that devastate lower-income families. Germany (83 million people) and the Netherlands (17 million) both successfully implement comprehensive insurance regulation, demonstrating that market size does not prevent effective consumer protection.

Eliminating surprise billing

“Surprise billing” occurs when patients receive unexpected charges from providers they never selected - typically emergency specialists - who bill the difference between their charges and insurance payments. Patients choosing in-network hospitals still receive bills from out-of-network anesthesiologists or radiologists.

The US No Surprises Act

The No Surprises Act (2021) bans surprise billing for emergency services and out-of-network providers at in-network facilities. Payment disputes are resolved through independent arbitration - patients are removed from billing disputes. Surprise billing complaints decreased 75 per cent in the first year (CMS, 2022). Barbados should adopt identical protections. Given Barbados’ small size and limited providers, the island could require all licensed physicians and facilities to be in-network for all insurers, with standardised reimbursement rates negotiated through a commission including the medical fraternity, insurers, and consumer representatives.

Other essential protections

Banning pre-existing condition exclusions: The US completely banned pre-existing condition exclusions in 2014. Insurers cannot deny coverage, charge higher premiums, or refuse treatments for prior conditions. This protected 27 million previously uninsurable Americans (CBO, 2017).

Despite industry warnings, premiums increased only marginally. Barbados should adopt this ban immediately.

Requiring cost transparency: US healthcare facilities must publish prices and provide cost estimates within three days, enforced through $300 daily fines (CMS, 2021). Barbados should mandate that providers publish price lists and provide binding estimates within 48 hours of scheduling non-emergency procedures. Patients cannot make informed decisions when costs remain hidden.

Why hasn’t Barbados reformed?

Limited consumer advocacy: Barbados lacks dedicated consumer health advocacy while the insurance industry maintains regular FSC consultation. Approximately 20 insurers control the market, with the largest holding over 50 per cent market share. This concentration may limit regulatory willingness to impose requirements that could prompt market exit. Without organised consumer pressure to counterbalance industry influence, policy discussions reflect insurer preferences over patient protection.

Small market concerns: Some policymakers worry regulation might cause insurers to exit the small market, reducing competition. However, Trinidad and Tobago have implemented stronger protections without losing insurers. Market size is not a valid excuse for inadequate consumer protection.

Government capacity questions:

Establishing an Insurance Ombudsman requires resources but can be self-funding through perpolicy fees - Australia’s successful model for three decades (Australian Ombudsman, 2023). Initial setup costs are modest compared to economic damage from medical bankruptcies and delayed care. Political will, not financial capacity, is the primary barrier.

Lack of public awareness: Many Barbadians do not realise their insurance gaps until catastrophic illness strikes. Without sustained public pressure, politicians have little incentive to challenge powerful insurance interests. Consumer education and organised advocacy are essential first steps toward reform.

Medical insurance in Barbados is necessary for shielding families from devastating costs, yet current practices shift financial burdens onto consumers while lacking robust protections found elsewhere. Barbados simply needs political will to implement these solutions. The question is whether Barbadian policymakers will prioritise family financial security over industry preferences. Every month without these protections, more Barbadian families discover their “comprehensive coverage” is anything but comprehensive.

International experience proves these reforms are feasible, effective, and long overdue.

Dr Ankie Scott-Joseph, a lecturer at the University of the West Indies, Cave Hill Campus, is an economist and public debt management specialist.

Email ankie.scott-joseph@cavehill. uwi.edu

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