May 22, 2019

Yes, you certainly can.
Sen. Nicholas Kempe: I have two questions about
the announcements that we just . . . the nature of what
was in them.
The President: That is not usual , sorry.
The Clerk: Questions about the Ministerial Stat ements , but—
The President: But not on the announcements.
Sen. Nicholas Kempe: Okay, fair enough.

464 22 May 2019 Official Hansard Report

Bermuda Senate The Clerk: Under . . .

The President: So, the Order of the Day , then, is the
second reading of the Health Insurance Amendment
Act 2019.
Senator Richardson.

Sen. Nicholas Kempe: Madam President .

The President: Yes, Senator.
Sen. Nicholas Kempe: I certainly oppose us moving
straight to the second reading.
In the legislative best practice meetings that
were held a couple of weeks ago, under the “Recommended Benchmarks
for the CPA Caribbean, Amer icas, and Atlantic Region [Democratic Legislatures] ,” in
the report gi ven under section 6.23 it states, “There
shall be adequate time allowed between the first and second reading stages of Bills as provided in the rules
of procedure. Any exceptions must be transparent,
narrowly defined, and extraordinary in nature.”
And I s truggle to see how this particular
movement from first [reading] to second [reading] in
the same sitting qualifies under those standards.
The Clerk: The Senator is proposing—

The President: Sorry, Senator Kempe, what are you
proposing?
Sen. Nicholas Kem pe: I am opposing that we move
to—
The Clerk: The second reading?
Okay, there is objection—

The President: Is there any objection to the second
reading motion? Is there any objection from the—
The Clerk: There is objection, so we will take a vote
on th e moti on to proceed to second reading, okay?
The President: Yes.
The Clerk: Okay.

The President: So what we are doing . . .
Senator Richardson, you had a —

Sen. Anthony Richardson: I am able to continue. I
am ready . . . so let’s proceed . . . I don’ t think we
have to go through.

The Clerk: Well, r ight now we are taking a vote on his
motion—

The President: We are taking a vote on his motion,
the motion to proceed— The Clerk: —to proceed to the second re ading. So,
we will vote on that.
The President : —to see whether or not it carries.
The Clerk: If the motion is defeated , then we will pr oceed with the second reading. Okay?
Sen. Anthony Richardson: Yes, we can get some . ..
The Clerk: All right. We will go on that now.
Senator Kempe, this is on the motion—

The President: On his motion—

The Clerk: Senator Kempe’s motion—

The President: —not to proceed.

Sen. Nicholas Kempe: Not to proceed?

The President: Mm-hmm.

The Clerk: Not to proceed.

Sen. Nicholas Kempe: Yes, I support that motion.

DIVIS ION
[Motion opposing second reading of Health Insurance
Amendment Act 2019 ]
Ayes: 4 Nays: 5
Sen. Nicholas Kempe Sen. Anthony Richardson
Sen. Marcus Jones Sen. Crystal Caesar
Sen. Dwayne Robinson Sen. Vance Campbell
Sen. James S. Jardine Sen. Michelle Simmons
Sen. the Hon. J. E. Dillas -Wright

Absent: 2
Sen. the Hon. K. L. Simmons
Sen. Jason Hayward

The Clerk: So the motion is defeated by six votes to
four . . . no, no, that would be five votes to four, sorry.
So the motion is defeated, and we can proceed with
the second reading.

[Motion to oppose the second reading of the Health
Insurance Amendment Act 2019 was defeated by a
majority on division .]

STANDING ORDER 25
Sen. Anthony Richardson: Good morning, Madam
President, fellow Senators and members of the listening audience.
I am pleased, first of all, to request, Madam
President, that the provisions of Standing Order 25 be granted so that the Senate may now proceed with the


Bermuda Senate second reading of the public Bill entitled the Health
Insurance Amendment Act 2019.
The President: Is there any objection to that motion?
Carry on, Senator Richardson.
[Motion carried: Leave granted for the Health Insurance Amendment Act 2019 to be read a second time
on the same day as its first reading.]

Sen. Anthony Ric hardson: Thank you.

BILL

SECOND READING

HEALTH INSURANCE AMENDMENT ACT 2019

Sen. Anthony Richardson: Madam President, for the
sake of complete clarity, I am going to advise that in
my professional capacity I do provide various consu ltations, but I do not have any direct interest in any health care provider or any health insurance company. So I do not have a conflict in what I am about to
do.
And, for members of the listening audience, I
just want to say before I start that what we are doing today is moving forward with the Government action
to avoid an estimated $20 million increase in overall
health care cost s and the consequent increase to us
individually in terms of our health care [insurance]
premium. Clearly, there will be disagreements in terms
of comments from Members around the table, but I do
not believe there is any disagreement in the general
sense that Bermuda must now act to reduce our general level of sickness, and also to reduce the cost of
health care in Bermuda.
And, as you said, Madam President, I am pr esenting on behalf of the Junior Minister, Senator Ha yward. And I certainly want to acknowledge the work of
Minister Kim Wilson , who has done a tremendous
amount of the work to ensure that there is clarity in terms of what is being done w ith this amendment, and
also members of the general business community
who have assisted to ensure, in my personal case,
that I understand what the challenges are, what their
comments are, and the significant of their comments,
in terms of that.
So, with those comments, Madam President, I
will now give my formal comments on behalf of the
Minister.

The President: Carry on, Senator Richardson.

Sen. Anthony Richardson: Thank you.
Madam President, I bring to the Senate today
the Bill entitled, The
Health Insurance Amendment Act
2019 . Madam President, the purpose of this Bill is to
streamline the way Bermuda funds its only hospital in
order to control health care costs and make the necessary amendments to effect this through updates to
the Standard Premium Rate and the Mutual Re-insurance Fund. However, before getting into the su bstance of the Bill, I would like to pause to invite the
Senate and the public to reflect for a moment.
Madam President, some members of the public and the Opposition may be asking, Is access to
health care a privilege or a right? Health care in many
countries is considered a basic human right. Article 25
of the United Nations Universal Decl aration of Human
Rights provides that “everyone has the right to a
standard of living adequate for the health and wellb eing of himself and his family, including food, clothing, housing and medical care . . . .”
The World Health Organization’s Constitution
preamble provides that “the enjoyment of the highest
attainable standard of health to be one of the fundamental rights of every human being.”
Bermuda should join the rest of the developed
world and take steps to deliver quality and affordable health care for all. We can no longer accept a system
which distributes health care unevenly on factors ot her than necessity.
A community that permits some persons to
have greater access to care than others creates inequality and a two- tier system. In such a system, we
will inevitably see persons who fail to receive the care
that they desperately need. If persons are unable to
access care early, they could end up consuming a
larger portion of our health care resources. So, again, Madam President, health care is a human right to
which all members of our society are entitled to.
Now, Madam President, some members of
the public and the Opposition may be asking, Why
now? For years we have had conversations about
health care and health costs around dinner tables, at sports clubs and under the tents at Cup Match. We
have talked about which family member or which
friend had what experience with what doctor or what
nurse or what physiotherapist. We have talked about the amounts of the bills and the increases in prem iums, the receipts and the co- pays, the stories and the
subtleties, the comparisons and the controversies. We have talked about the emergencies and the not -so
emergencies, the urgent care and the nurse whose name we could not remember, but whose kindness we could never forget. We have had this conversation
before in the House, in the Senate and also in our various caucuses and with our Opposition, and it has all brought us to this moment, Madam President.
Our discussion about health care here in
Bermuda, as we have been recently engaged, is not just a conversation about corporate profits and hosp ital funds. It is, however, about coming to look in the mirror as a country, about who we are. It is coming to grips about where we have fallen short and what we
466 22 May 2019 Official Hansard Report

Bermuda Senate can highlight that we really do well. The truth is that
we do a lot in health care extremely well, and we have
qualified professionals who are highly skilled and who
are passionate about their current patients and those
they may serve in the future. It is in this reflec tion,
Madam President, that I come to address this very
important issue.
So, where are we? Our current spending on
health care in Bermuda is over $720 million, but we are not living as long as we should. We are knee- deep
in chronic illness and waist -high i n health risk. We are
eating more than we should and exercising less than we should. We are treating more and not preventing
enough, i.e., a complete switch now; let’s move more
towards preventative care. We are spending almost $2 million per day on trying to keep healthy people in
healthy communities. Some of that money is being spent wisely, and some of it could be spent a whole
lot better. It is for the latter that we are building our
work around health financing reform. Yes, Madam
President, we are reforming our health system.
We are changing the way in which those dollars come from your pay cheques and taxi fares, and construction salaries and corporate offices and hotel
rooms, and how they end up being spent on your
health in order to make your abili ty to contribute to
Bermuda stronger. We are taking what we have been
talking about for decades and putting those energies
into real action. We are, in real and significant ways,
changing how we do business here in Bermuda, for
health.
So, again, Madam President, why now? I can
go on and list the reasons why a stronger Bermuda in
the face of a rapidly changing and technology -driven
world, where blockchain and global economies, genetic breakthroughs and transportation strategies for our
international tourism need a much healthier population
to drive business. I can talk about how we need to
reduce our cost of doing business by lowering the cost
of health insurance to attract more international companies to the Island. I can even talk about how we can
compete better in sports and education if we were
healthier.
And while those things are all true, maybe this
conversation is more straightforward than that. Maybe
the reality is that this is our moment as a country to seize an opportunity to do something better, not for
business reasons, but for people reasons. This is an
opportunity to really put Bermuda and its people first.
Madam President, let me lay out what is happening and what this initiative of reform is all about.
We are putting in health care and financing reforms to improve our health system for the sake of our economy and each of our families. We are starting with the
way that we pay for the hospital. We are giving our
hospital a fair budget so that they can deliver the care they need to the public. A s a return for that budget, we
are also holding our hospital more accountable for how much care they need to deliver and the quality
and patient care they provide.
As a return for the funding, we are asking for
better reporting and better negotiation of c osts, better
reviews of utilisation and better partnerships with our
community doctors and nurses. We are also looking
for better efficiencies and better health outcomes and
demanding the best from our hospital, and they are taking the progressive and responsible steps to
achieve under those demands.
The budget is being paid for through a fund
that all able -bodied residents already contribute to.
And this has been established, as we all know, from
some time ago. Whether you use the health system or
not, we are asking for a base level of social . . . towards health for all.
Not every person has the ability to contribute
to that goal equally. Some within our midst must bear
the cost more than others. Some in their 30s and 40s
will have to pay for someone in their 80s and 90s.
Some workers will have to help in support of those
seeking employment. And, Madam President, you will
be aware that sometimes that is the public argument. I
pay from age under 20 to age, say 49, and never
need health care; why am I paying? And the reality is
that we are paying for the others that in the system
that would need to access health care more than they
have actually paid in.
So, s ome costs will have to shift, and some
caps will have to be put in place to control those
costs. Some smaller businesses may need more support. Some families will have to sacrifice additional
funds to assist those who are in more challenging ci rcumstances. We will have to share responsibility now so that the future costs of future responsibilities can
be less. We will have to share the costs of investing
more in prevention . . . about how we make this social
contract of shared responsibility a fair proposition.
How providers, payers, politicians, regulators, r esearchers and religious bodies can use their u nique
skill areas to put forth and implement timely solutions
in a proactive and non- reactionary way.
As the carefully considered and evidencebased changes are being made, we are at the same
time asking our health insurance companies to co nduct business d ifferently. We are looking for each of
those companies to use more of the money that you
are paying into health insurance premiums to pay for
your health. At the same time, we are looking for our
health professionals to look for cost savings within
their b usinesses and between colleagues so that we
can move forward with fairer pricing.
Madam President, that is what I was referring
to earlier as part of the process of understanding the reform. It is to understand the reality that the standard
hospital premi um process, or the standard health
premium process, actually cross -subsidises the other
health benefits that we achieve. And for me, that was a revelation in this whole process.


Bermuda Senate Madam President, this is a change in how
things have always been. This is a change in the st atus quo, and we understand that these conversations
have not always been easy to be involved in. Yes, we
are demanding to put the health of people as a higher priority to the health of profits. But this is not the opening and closing of the conversation. Our teams are
working on a number of other initiatives in collabor ation with the different members in health care. We are
working on making the Standard Health Benefits a
better set of services for you, we are working on ways to better measur e quality in services, and we are
working on updating our strategies and innovating our
care. We are working on prescription drugs, mental
health and maternity care. We are working on educat-ing our youth and putting them in health careers to fill
the gaps. And we are working on bringing more care
home to Bermuda while preserving smart choice.
And I believe in the community we have seen
that more and more now, whereby in the past, we
have gone overseas for so much health care. And it can now be done locally, mostly because providers,
including the Hospitals Board, now have doctors com-ing in on a regular basis to perform specialist services
in a more cost -efficient manner.
So, we are also working on communicating
with you, the public, on all the steps we are taking to
create a better system for you, your parents and your
children. So, again, Madam President, the question is
asked, Why now? The answer? This is the moment
that we can do what we can. We can rise to the occ asion to put partisan arguments to the s ide and find
common understanding of what we need. And I refer
again to my opening comments in terms of, I believe
there is general agreement that Bermuda must now
work to reduce our level of generic sickness and the
continuing rising costs in health care. There is dis agreement as to how we do that, but that fundamental
agreement I do believe exists.
We can listen to our seniors and give them
some financial relief. We can start to stop the abuse
within our system, in many cases the overutilisation.
We can buy better, smarter and at lower health prices. We can set an example to the next generation of how
better health is a tool for better living —i.e. , prevention.
We can empower our communities and ourselves to
eat better and laugh harder. Interestingly, Madam
President, I had lunch yesterday and I actually asked
for a smaller portion. And the person serving me said,
Why? And I said, No, I’m serious. I don’t want to have
this huge portion because there is a psychological
piece there. If you get it, you’re going to eat it all. But I
did not want to be super full. I wanted enough to just
keep me going. So, it is a conversation we have to have sometimes in terms of portion size and portion
control. And then, yes, you can laugh harder as a consequence.
We can embrac e our challenges of mental
health and give those affected their needed treatment. We can manage those chronic illnesses —diabetes,
cancer and heart disease —and find ways to stop the
devastating effects of stroke, which we have seen
some other initiatives by the Hospitals Board now to
better manage strokes on Island. We can reduce our
road traffic accidents, broken bones and traumatic
brain injuries. We can make health care more affordable for all and make sure that health care is available
for all.
As Bermud ians, we have always sought to be
the best, and we should always want to change and
adjust for the better. So, Madam President, we can
change now. We can, and we will because if not now,
when?
So, again, Madam President, in this context, I
would like us al l to consider the Bill and its aims. The
purpose of this Bill is to streamline the way Bermuda
funds its only hospital in order to control health costs,
and make the necessary amendments to effect this
through updates to the Standard Premium Rate and
the M utual Re-insurance Fund.
Madam President, you will be aware that,
previously, I was on the Bermuda Hospitals Board when you were the CEO. And we developed the real ity that the hospital has to be preserved to provide
care. Because, irrespective of your per sonal level of
wealth, [the hospital] is a stop in the event of an
emergency. And even if there was a medevac plane on the tarmac at the airport and you had a significant
medical event, you cannot go from that medical event
to the airplane. You have to go via the hospital. And
so, I was happy to see that there is the continued recognition that the hospital must be preserved to
provide the 24/7, 365- days -a-year health care for
each of us.
The Standard Premium Rate (or SPR) is the
premium for Bermuda’s basic, mandated package of
insurance, the Standard Health Benefit (or SHB). The
premium is set annually following an actuarial review
facilitated via the Bermuda Health Council.
Madam President, as this Honourable House
is aware, the Standard Health Benefit is the basic i nsurance package that all employers must provide to
their employees and their employees’ non- employed
spouses, and they pay a minimum of 50 per cent of its
premium. That also, Madam President, bears empha-sis, because I am aware that there are some emplo yers who are actually not contributing 50 per cent of the
cost of the health premium. And so, employers need to know that that is the minimum that they have to
contribute. And so, as an employer, you might pay 100 per cent of the health insurance premium, but you
cannot pay zero. You must be able to pay at least
50 per cent.
So, by law, Madam President, all health i nsurers must include this package, this basic package,
in any insurance policy. The package is regulated, as are its fees and premium. A nd I think we all . . . well,
many of us are aware that there is a process by which
468 22 May 2019 Official Hansard Report

Bermuda Senate the benefits themselves are determined. And then,
they are actuarially priced, and then that forms the
overall component of the premium. In addition, government subsidises the cost towards the Standard
Health Benefit coverage for children, indigent persons
and seniors. The premium for the mandated package is called the Standard Premium Rate [ SPR]. It co mprises the Standard Health Benefit component and the
Mutual Re-insurance Fund [MRF ] component, which I
will explain in a few minutes.
The Standard Health Benefit covers most l ocal hospital -based care (both inpatient and outpatient
services), select diagnostic imaging in and out of the
hospital (for example, mammograms) and sel ect medical home care benefits (for example, IV infusions).
The MRF is a pooled fund into which all insurers currently pay a prescribed premium to cover all insured
persons’ kidney transplants and dialysis, and to pr ovide transfers to specific health progr ammes. Again,
Madam President, you will be aware that in the past the inability to fund kidney transplants caused adverse health complications for certain individuals. And so,
now it has been amended to provide a bigger benefit
to those who are in need.
Madam President, following actuarial consi deration of the volume of services used in the past year, and historically, as well as projections for future use of the SHB and MRF benefits, the Ministry of
Health learned that an $84 standard premium i ncrease woul d be needed to sustain the current level of
coverage. This was due to utilisation increases, fee levels and unequal risk pooling. And that, Madam
President, goes back to what I said earlier. The action that has been taken with this Bill is to avoid that $84
increase that would have otherwise been required
based upon the actuarial assessment. This would
have resulted in the standard premium increasing by
23.6 per cent, from $355.31 a month to $439.32 a
month. Such a change would have been untenable for the public and for the employers, so it was unacceptable to the Government. And we know how that
works, as an employee, for sure.
Madam President, everyone paying for health
care knows all too well that year -on-year increases
cause hardship on individuals, fami lies, businesses
and the community. The Government could not sit by
and allow this to happen. Actions commensurate to
the problem had to be taken, and the Government has
acted. It is well known that the primary step taken to
prevent the premium increase was to streamline the
way we fund the Bermuda Hospitals Board. While this
has not been universally popular, I know it was the only way that the premium escalation could have been
averted. And again, as I said earlier, I believe that we
all understand the need to reduce health care costs
overall. There may not be full agreement as to how, but this is what we are doing.
Madam President, the Bermuda Hospitals
Board represents over 95 per cent of claims against the standard premium across the system. Again, that
means that most of the claims that are paid under the
SHB programme are going to the hospital, which r eceives 95 per cent. So, if we retained the status quo,
the claims would have exceeded the premium signif icantly. So, our choices were to increase the premium,
reduce BHB’s fees dramatically , or change the way
that BHB is funded. Now, I do believe, Madam Pres ident, that time does not really permit me to explain this even more. But what we are saying [here] is that
in the absence of making this change and then not
increasing premiums, the total programme would have
been underfunded significantly. The Government
chose the latter.
The option to reduce BHB’s fees was consi dered seriously. But it is not a viable solution, as it
would not solve the larger, systemi c problem , [which
is] that fee- for-service makes cost containment i mpossible. Further, such a change could not be impl emented fast enough for the Standard Premium Rate to
suffice. Rather, the Government took the decision that
to get a different result we have to do things different-ly, and accepted that a fundamental change to the
overall funding of the hospital was necessary and
timely.
Madam President, I want to pause and remind
the Senate that this is not the first step in streamlining
the hospital’s funding with a fixed- budget model. In
2017, when the then Government decided to reduce
the hospital’s subsidy budget by $25 million, it
amended the legislation to change the subsidy from a
fee-for-service model to a block grant. While the $25
million grant wa s a one- time reduction and the subs idy budget was restored to $108 million in 2018, the
elimination of fee- for-service created significant eff iciencies for both the Hospitals Board and the Health
Insurance Department without hampering utilisation
monitoring and collaboration.
Madam President, for emphasis, we are moving away from the idea whereby the hospital will be paid based upon the actual services they provide, as
opposed to, here is a total amount of money, and you
operate within that. And then, they will manage accordingly.
So, Madam President, I want to stress that
funding the hospital in more efficient ways is not new and has been used successfully in recent history. We
expect a similar outcome from the change that is now
being proposed. Ultimately, what we all want is for the
hospital to be properly resourced and funded to deli ver the quality care that we all want and deserve. And of that I can give complete assurance.
Madam President, the $330 million revenue
target was derived on the basis of extensive discu ssions with BHB and a review of their financial needs
and position. And the figure was concluded on the
basis that it is a realistic funding level that will enable the hospital to operate and deliver quality care. Again,
Madam President, for emphasis, it was interesting for


Bermuda Senate me to note that the funding number was not pulled out
of a hat, but instead determined in conjunction with
the Bermuda Hospitals Board, who would ultimately
be the ones who have to manage within that. And so,
it is important, I think to emphasise that.
In addition, Madam President, I have to r emind us all that the very origin and spirit of the Health
Insurance Act 1970, which established the structure of
our health financing, is that the Standard Health Pr emium is community rat ed. This seems to have been
forgotten by some. However, anyone who has the r esponsibility of the Minister of Health is all too aware of
this fact and its fundamental rationale: The point is to
distribute risk evenly throughout the community. The
change we are making ensures that this happens as
intended.
And I know, again, Madam President, there
have been some comments in terms of the loss ratios
within the Standard Health Benefit programme for the
private insurers versus the public insurers, which
would include GEHI and some of the government pr ogrammes. And that is why I was saying earlier that, as
part of this process, it helped me to understand that
there is actually a cross -subsidy , if you will, of these
programmes. And [for me] to also understand that the
public programmes, actually almost by default, have a
sicker population than the private programmes do,
because, of course, when you turn 65, you generally
cannot get private health insurance and all those
things. And so, it does make financial sense t o see
how the numbers are actually distributed.
Madam President, the Bill brings amendments
to effect this important, necessary and beneficial change. In particular, the Bill:
• requires a licensed insurer, or employer who
operates an approved scheme, to pay the Mutual Re-insurance Fund premium into the
MRF within 30 days of the start of the month
or week (as the case may be) covered by the
payment;
• provides that a prescribed transfer from the
MRF to the Bermuda Hospitals Board is to be
used to fund all standard health benefit s received by insured persons where it is provided
by the BHB (so, the MRF will now fund all of
the treatment s that those persons [ receive] );
• provides for an insurer, or employer who operates an approved scheme, to not be liable
to pay the Standard Health Benefit claims
from BHB if they have paid the MRF premium
for an insured person, which makes sense.
And so, if I have collected the premium and
paid it already through the Mutual Re -insurance Fund,
my liability has stopped. You cannot the n come back
to me and, Anthony, now, pay the claim, because I
have already paid the payment to the MRF .
• provides for an insurer, or employer who operates an approved scheme, that has not paid
the MRF premium for an insured person to be liable for the S tandard Health Benefit claims
from Bermuda Hospitals Board in respect of
the insured person (again, in my mind, that is
practical );
• makes all dialysis claims payable by the Mutual Re-insurance Fund;
• provides for the hospital to bill for all nonStandard Health Benefit services;
• increases the proportion of the Standard Pr emium Rate that is ceded—

Sen. Nicholas Kempe: Point of order, Madam Pres ident.
The President: Senator Kempe, your point of order?

POINT OF ORDER
[Misleading]

Sen. Nicholas Kempe: I am not sure if the Member is
inadvertently misleading the House, but he stated that
all dialysis claims will be paid out of the MRF . [Is] m y
understanding [correct] that the $25 or so is left to the
private insurance companies to cover non- hospital
benefits, which includes dialysis? Just for my clarity.
That was my understanding.
Sen. Anthony Richardson: If I may, Senator Kempe
and also Madam President, defer. That would be a question. And once I finish the brief, the officers then
can clarify that.

The Presid ent: Yes, f ine. You can keep your questions to the end, please. Thank you.

Sen. Anthony Richardson: But that is the note, that
all dialysis claims [are] payable by the MRF.
• provides for the hospital to bill for all nonStandard Health Benefit services;
• increases the proportion of the Standard Pr emium Rate that is ceded as the MRF premium
from $101.97 to $331.97 and adjusts relevant
transfers .
And this, Madam President, if I may, is what
was certainly significantly discussed in the public ar ena, the signif icant increase in the amount that goes to
the Mutual Re -insurance Fund. Also, it increases the
MRF transfer to the Hospitals Board from $13.16 to
$231.33 in order to fund hospital care of insured persons. And that, I believe, is the crux of it all, is that the
change in the way that the funds are selected as pr emiums are then eventually transferred across the Hospitals Board.
• updates the definition of “the general hospital”
to clarify that this means only a hospital facility
operated by the Bermuda Hospital s Board;
and
470 22 May 2019 Official Hansard Report

Bermuda Senate • clarifies the definition of inpatient and outp atient hospital services for the purposes of
Standard Health Benefit coverage.
That is a lot, Madam President. Madam President, to effect these changes, the Bill amends the
Health Insurance Act 1970, the Bermuda Hospitals
Board Act 1970, the Bermuda Hospitals Board (Hosp ital Fees) Regulations 2018, the Health Insurance
(Standard Health Benefit) Regulations 1971, the
Health Insurance (Mutual Re- Insurance Fund) (Pr escribed Sum) Order 2014, the Health Insurance (Maternity Benefit) Regulations 1971, and the Health I nsurance (Mental Illness, Alcohol and Drug Abuse) Regulations 1973.
Madam President, I do anticipate questions.
And so, what I would propose to do is to end the brief
at this stage to allow f or the questions. And, of course,
I do beg your indulgence in terms of the process by
which questions are asked and then we [will be] able
to [provide] the responses so that the public are a ppropriately informed. Thank you, Madam President.

ANNOUNCEMENT B Y PRESIDENT

SENATE VISITOR
The President: Thank you, Senator Richardson.
Before I open the floor to other Senators to speak on
this Bill, I would just like to acknowledge the presence of the Permanent Secretary of Health, Dr. Jennifer Attride -Stirling; as well as Mr. Brian Eaton, Parliamentary Counsel; and Dr. Ricky Brathwaite, the acting CEO of the Health Council.
Welcome to all three of you.

[Health Insurance Amendment Act 2019, s econd
reading debate, continuing]
The President: Would any Senator car e to speak on
this Bill?
Senator Jones, you have the floor.

Sen. Marcus Jones: Thank you, and good morning,

Good morning.
Sen. Marcus Jones: Good morning to my fellow
Senators , also, a hearty good morning to the listening
public.
Allow me to preface my presentation and my
questions and observations of this Health Insurance
Amendment 2019 Bill that has been presented this
morning. At the early part of this month, in May,
May 1
st and 2nd, we as Parliamentarians, both in this
Chamber and in the House, had the privilege of being
a part of a Parliamentary Strengthening Seminar
Workshop. It was very interesting. It was very well
attended. And I believe that kudos and congratul a-tions are to be extended to the Speaker of the House
and to Madam President here with us today for the
way that it was conducted and the inspiration and education that we received.
One of the speakers who was there happened
to be the Honourable Shirley Osborne, who is the Speaker of the Legislature there in Montserrat. Her
presentation was very good. And one of the things
that got my attention was in her jurisdiction, the size of her legislature is 11. Nine are G overnment Members
of Parliament, and two are from the O pposition. And
one of the points that she r aised, which I thought was
very important, was the need for there to be collabor ation, the need for those who are sitting in the minority
of the House to get equal time and opportunity to be
able to present their arguments, to present their part of the debate, to be a part of even the agreement to
plan out the calendar year f or the presenting of Bills.
And in her discourse, she conveyed a story
about how she had to hold back on the government’s
push to proceed with a Bill to the first and second readings. A nd prior to the presentation by the Government Senator this morning, my colleague just read
out the
1Legislative procedure that is practiced about
presenting first and second readings to a Bill, and the operative words there are “for any exceptions, there
must be transparent, narrowly defined and extraordinary in nature.”
And I believe, in the spirit of collaboration and
in the spirit of a democracy where we are doing the
people’s business, and sufficient time must be allowed
and allocated, for us as legis lators to do the people’s
business, the comments that she made, which en-gendered and encouraged cooperation between both aisles of parliament, struck a chord with me. In those
two days of workshops, we engaged in breaking
bread and singing Kumbaya and all of the wonderful
social gatherings that we experienced. And there was
generally a healthy vibe there. And I believe that we
all left there very optimistic that some of the practices that have been exercised in the past that actually
worked to divide us would be at least attempted to be
overcome.
But I do not believe that the airplane that
landed and transported the Honourable Speaker to her home country in Montserrat had barely touched
the tarmac of the airport, when quite quickly we find
that we as a legis lature were right back to how we
have done in the past.
And just for the public’s information, we on
this side of the Senate are not entirely pleased with
the speed and the reckless abandon that the Go vernment has presented this Bill. And it should be noted that I believe in the coming months and years as
we sit around this table that there should be a certain

1 Recommended Benchmarks for the CPA Caribbean,
Americas, and Atlantic Region Democratic Legisl atures, 6.2.3


Bermuda Senate level of courtesy that is afforded the Opposition, who
are sitting in the minority, to be given sufficient time to
prepare such an important Bill, such an important
change to our health care system which requires
enough time for us who are debating it, who are considering different aspects of this Bill, to be able to
reach out to those stakeholders within the community
who can add to the information that we require, to be
able to fairly and equitably debate this Bill.
Now, having said that and stepping off of my
soapbox, I will proceed, Madam President.

The President: Carry on, Senator Jones.

Sen. Marcus Jones: If you allow me, Madam Pres ident, I just want to just read from the opening of this
Bill, its purpose. And I am reading, Madam President:
“to provide for a new method of funding hospital
treatment provided by the Bermuda Hospitals Board in
respect of standard health benefit . . . .” That is the
purpose of this Bill that we are debating here today.
I also would like to bring the public into r emembrance of a statement made during the Gover nment’s Throne Speech last November 2018. And may I again quote from the Throne Speech, Madam Pres ident?
The P resident: You may, Senator Jones.
Sen. Marcus Jones: “The Government will change
the way we pay for health care and make it more affordable by expanding access to coverage at better
rates . . .
“Therefore, upon conclusion of the necessary
consultation, th e Ministry of Health will advance a national health plan . . . .”
Now, from that statement and from the entire
Throne Speech that we as Parliamentarians and the
greater public hear from the Government, it is the
Government’s agenda for that particular year . And we
pay close attention to what the Government has laid
out for its Legislative agenda for that year. And so,
from that statement made from the Throne Speech of last November 2018, there are two phrases that get
my attention. And I think it is pertinent to this particular
amendment Bill that we are debating here today. And that is, “more affordable” and “ample, necessary consultation” in regard to a health care plan.
I humbly submit to my fellow colleagues here
today and the greater public audience that those two
elements of the Government’s aspirations were not
met in this particular Bill.
Now, as we listened to the Government Sen ator Richardson spell out this Bill, for the listening public it may have sounded very complex, very integrated, very . . . almost tedious , because there are lots of nuts
and bolts to this legislation that we as legislators have
to pay attention to. But I believe, from the perspective
of the public, for any change of any insurance plan, I would submit to you, Madam President, t hat their concerns are, Are my premiums going to go up? Do I still
have access to the services that I always had? Do I
have choices? A mongst a myriad of questions, I b elieve the listening audience and the public at large
would break it down to those three major questions.
And as I was reading over this particular Bill
and trying to break it down, because I think there is a certain amount of expertise to be able to communicate
a Bill or any concept like this, take it from the complex
and sort of break it dow n so it is comprehensible and
understandable to the layman, I was thinking of this:
Let us say that my wife and I want to lower the cost of
our budget for a year. And let us say that as the husband, I am responsible for certain payments like the
mortgage and probably the car payments and other
things around the house. And let us say my wife is responsible for the health care costs, for the children
and for other day -care costs. So, as a family unit, we
have our budget of expenses. The father has his r espons ibility of payments. The wife has hers, as well.
Now, let us take this health care situation. And
let us say that in an attempt to lower the costs, and for
this particular illustration, I explain to my wife, I tell you
what. In addition to the expenses of the household
that I have taken on, I’m going to take away from you
the cost of the children and the rest of our family’s health care. So, all the GEHI premiums that we have
to pay for, I’ll take them on. But that does not reduce
the payment of health care, in this case, the Jones
family. It just shifts the funding from the wife to the
husband.
And in essence, to make the complex simple,
this particular Bill does not embark on the aspirational goal of reducing health care costs. It simply shifts the
funding of this particular plan from the hands . . . funding to the Government’s pool from this limited capital, $330 million. And I think it is important to put that
marker down, not to say that the Government does not have that as its overall goal, to reduce the cost of
health care. But this Bill does not do that.
I am also concerned because I quickly asked
the question, What is the Government’s end game in this particular move to [make] this amendment to the
Health Insurance Bill of 1970? And I have heard bits and pieces, the Minister’s Statement, the statements
we have heard today. And clearly, the Government’s
long-term plan is to have universal health care. And I
would say that that is a lofty aspiration for a country of
this size. It is aspirational, and it is noble. And I believe it is safe to say that the majority of parliamentar ians, legislators, if you walk down the North, East, South, and West of this country, most people would
agree that we need a system in place that is going to
make sure that everyone, those who cannot afford it
and those who are vulnerable, can be able to have
health care.
I believe where you will find that we will differ
on this side of the aisle, which is in most big- ticket
472 22 May 2019 Official Hansard Report

Bermuda Senate items that we discuss as parliamentarians, is, How do
we ge t there?
Now, the Government would suggest to you
that this is the first step in creating a situation and an
environment where health care is available for all. But my concern is that I would have felt far more comfor table, and I believe that stakeholders within the community, Madam President, would have felt far more comfortable, as well, to see and hear a plan from point
A to point Z, this being the first step. These are our
aspirations to get us to universal health care. We do
not see that. We do not he ar that.
We know that the aspirations are there, but
the blueprint of how to get there is not, first of all, iden-tified in this Bill, in its presentation, or in aspirations for the future. It is like me, Madam President. If I was an
architect or a contrac tor and you came to me and you
said, Mr. Jones, I’d like for you to build a house for
me. And this is what I would like to have. I would like
to have a nice home. I’d like to have a spacious home.
I’d like it to be overlooking the water, all these beaut iful things. And I turned around, and I said to you,
Okay. Very good. I will just start to build the founda-tion. I have given you no drawings of how and what
the house is going to look like. But we will build it, and we will design it as we go. But we’re going to establish
a foundation. And we will make it work however it works out.
So, I use those two illustrations to hammer
home the point that the precise blueprint of how this
country is going to go from point A to point Z, although
the Government is suggest ing that this is a first step,
has not been made clear to the public. And from what
we are hearing on the streets, what we are hearing
from those who support the OBA, what I am hearing
from those who support the PLP Government is a little
bit of concern. A nd from those friends of mine whom I
socialise with within the IB [international business]
community, they have concerns, as well.
So, I think it is important, and that is why we
are belabouring the point, the need for there to have
been at least a pause a nd time for even added consultation to make sure that all of the stakeholders, al though they may not be agreeing on everything, there
could be some level of comfort that sufficient consult ation had been done.
Now, when we talk about more affordability,
we compare service providers and private insurers.
One of the things that I would like to have seen and
heard from this Government, in addition to bringing
this amendment to the House and then consequently
here to the Senate, was how they are going to tackle and target the service providers, because that is
where the health costs really hit the Bermudian public
very hard.
Let us just consider a few numbers. We now
know that health care in Bermuda has an expenditure of about $723 million annually. That is a lar ge sum of
money. We also understand that health care in Ber-muda represents 11.5 per cent of our GDP. We also
understand that since 2006 up to today, to 2017, the
health care expenditure has blossomed and blown up, from I would say was a workable $420- or-so million in
2006 to an astronomical amount of $723 million in our
last year, or 2017. That represents about a 70 per
cent increase in health care costs. Actuarial reports
suggest to us that that bill, or that cost, that line item,
is going to increase somewhere around 6.5 per cent
on an annual basis.
So, it is a large part of the expenditure in this
community. And as a country, we are faced with an
ageing population. We now know that at this point,
one in four of our residents is over the age of 65, and
that by 2026, that number is going to be astronomically higher, [those] over the age of 65. So, we definitely need to get a grip on not only how we sort of rear-range the allocation of funding of health care in Bermuda, but we have also got to target that challenge of
getting the prices down.
Now, when we look at how the Government is
taking more and more of the lion’s share of health
care, at least the SHB, the hospital benefits, the basic
hospital benefits, we have to question, How much of
that pie will the Government takeover, knowing that
the loss experience of the public system’s share in
Bermuda compared to the private sector is fairly high.
We understand that the loss ratio in 2017 for the Government was 148 per cent. That means for every do llar of premi ums that the Government received, $1.48
was paid out in claims. We know in the same exper ience year, the private sector’s loss ratio was 89 per
cent. So, for every $1.00 premium that was received
from the private sector, $0.89 was paid out in claims.
And s o, for the listening public, who are only
concerned about, I don’t want my premiums to go up,
and I want the same services, for us as legislators, we
are dialling in and looking a bit more closely at how
the cost of health care is going to be handled. And we
do have concern when we see the Government, as it
were, is taking more and more of the responsibility of
the hospital costs.
Now, I could be wrong. But I am thinking here
on my feet to see, was there a previous administration
that actually attempted to tackle service providers, this
present Government or the former one? And I believe
that experience tells us that under their stewardship
the former OBA Government tried their best through
the Bermuda Health Council to rein in, for example,
the costs of diagnostic imaging. And we know the
brouhaha that was generated when those providers cried foul when those prices were lowered. And we
know, it is all public knowledge, that one service pr ovider of diagnostic imaging was actually reimbursed
for what we would say was a shortfall in his revenue
for the services that he provided.
Now, we also know that in tandem with that
reimbursement the Bermuda Hospitals Board was
also reimbursed. But it begs the question: Why did


Bermuda Senate this present Government actually reimburse the hospital if, at this point, we know that there were $65 million
sitting in reserves to cover for shortfalls? Now, if that
$65 million was known and was revealed, it makes me
want to question why that was done. Was it done so that it would appear to be equ itable? Not only was a
private service provider of this diagnostic imaging r eimbursed [but] the hospital was as well. Are we bend-ing to certain people within the private sector if they
cry the loudest?
So, it makes the public ask the question, How
can we ensure that those within the private sector who provide these services are actually scrutinised to the
highest level possible? And are we genuine in tackling
this health care cost, Madam President?
We also considered the block grant. We now
know that there is going to be a shift. No longer will
there be fees for service. This block grant, which will
be $330 million annually, according to the Gover nment’s statements, will represent a $20 million savings. What I would like to know is, what does that $20 million savings represent? Because we surely know
that this $20 million does not represent savings in
administrative costs, because there will not be that
extra line of process which requires claims to be pr ocessed. Because there is going to be a block grant,
we know that there is no longer going to be such a
need for such administrative support for being able to
recover payments, because you have got a block
grant.
So, I would like to know, and I believe the
public would like to know, specifically what does tha t
$20 million savings, which is the difference between
what the actuaries calculate it would cost, $350 million
to fund the hospital to be able to do its job to provide
service, compared to the number that they came up
with, which was $330 million? I belie ve that will be
good to know.
Because I would want to ask the question,
Does that $20 million savings represent services that
may be denied or held back or limited? Because we know that with this $330 million grant the hospital is
going to have its feet to the fire to have to live within
that budget. So, I would be curious to know.
Now, with that cap of $330 million, another
question would be . . . There will be some years . . .
and we know, because the industry and the cost of health care is growing at a r ate of 6.5 per cent every
year, in the coming years that $330 million is going to
be used up. We know that the $65 million reserves
are going to be used up eventually. How will that be
worked out, as well?
Now, another thing that we have heard in the
publi c as well, and I know the Government does not
want this change in the model for premium payments to be sort of redefined as taxation, but it is hard to see this being anything else but another way of saying
taxation. Although the price tag will not change,
$355.51 I believe the dollar amount was, if it quacks like a duck, if it walks like a duck, chances are it is a
duck.
Now, I also want to bring to our attention necessary consultation. That was something that was
mentioned in the Throne Speech that will be a part of the Legislative practice of this Government when looking at health care. In talking to some of the private
insurers, in the little time that we had to do our due
diligence to sort of get our heads around this change
in model, the overwhelming c omments that we got
were, We didn’t have sufficient time. The Government
rolled this thing out. We would have liked to have had time to go back and crunch numbers. The suggestion
was also thrown out to us in regard to the 6,000 u nderinsured or uninsured people who are in our com-munity . . . I threw that question out to them. I said,
This is a vulnerable group of people who need to be
considered. Would you as private insurers have had a
solution for the Government?
And we found that they were willing to cons ider, thought it was a great idea, if the three or four m ajor private insurance companies could actually underwrite these 6,000 underinsured or uninsured persons,
spread the burden of covering their insurance, which I
thought was intriguing. You don’t find too many profit -
making companies that are willing to take on that type
of burden.
But I guess the point I am getting at is, was
there sufficient time for the Government to go through
the pains of actually sitting with the private sector in
this country and trying to find solutions to problems
that are already there that could be done before even reverting to this new model? Because, again, I have to
reiterate, the private sector . . . and that is part of the
capitalist system. When you have a profit -making incentive, by nature, it creates efficiencies. It also cr eates competition. It also breeds innovation and crea-tive ways of doing things.
I was made to learn that some, for example,
within the Government, some of the GEHI payments back to the service provi ders, the delay is like six and
seven months behind. That is an example of ineff iciencies. Whereas we know that when the private sec-tor, the private insurance companies receive their
premiums from their clients, they make sure that the service providers for their clients are paid back within
30 days. I mean, you can fully understand the cash
flow issues that private service providers can apprec iate under a capitalist system.
So, I would like to hear from the technical officers of the Government on how they intend tackling
that inefficiency of where service providers are having
to wait for extended periods of time for the payment of
the services that they provide?
Now, I also believe the public was sort of taken aback, even as news came out to the public, about
this change in the modelling of the funding of the Standard Hospital Benefit. We know that the Minister
was able to make one or two statements in the public
474 22 May 2019 Official Hansard Report

Bermuda Senate domain. And then we know that another private insurance company quickly alerted their clients to the
changes in the model. And to some degree, I believe
that their attempt to pre- warn or prepare their clients
for the changing modelling of health care in Bermuda
was seen as being mischievous. It was seen as being
profit -generating by these private ins urance companies.
Now, Madam President, if you would allow me
just to quote from a portion of the Minister’s Statement
made to the media in regard to this situation . . .

The President: You may.

Sen. Marcus Jones: The Minister of Health, at the
time, was quoted as saying, “2The premium increases
made by this company are a business decision based
on profit margins and shareholder interests. The extra
premium they are charging is not to pay for hospital
care—the Government is protecting that —it’s to fund
their profits.”
Now, in response to that, this particular insurance company made the following statement, and if I
may quote this, as public knowledge. It is from the
BF&M, from the President of the BF&M, Mr. John
Wright. In his response to the statement made by the
Minister, he said the following (and I quote): “3We
want to work together with the Government to develop
thoughtful, comprehensive health care reform that
achieves our shared goals of stabilising costs, i ncreas ing accessibility and driving better health outcomes. We are in the process of presenting to Government viable alternatives. And we are hopeful that
those discussions will result in thoughtful solutions.”
So, from a small sample size of the quotes
made, and the tone by the Government versus t he
private insurer, we see that there is definitely a different approach to it. I believe that this Government can
be a little bit more collaborative, less demonising to
private insurers and seeing how they can present s olutions.
So, I think it is worth s tating again that we on
this side would have really appreciated the added time to actually do the grunt work, to do the rolling- up-thesleeves and meeting with more intense and technical
consultation with the private insurance companies out
there, so we as a country can be together, and allev iate the fears of the public and come up with solutions
that work for everyone.
Now, as I am looking at the trajectory of this
Government and its approach to health care, I am concerned that little by little the private insurance
companies are going to be elbowed out of this very
integral and important part of health care in this country. We know, as I said earlier, part of the Gover nment’s target is for universal health care. Now, that is

2 Bernews , 2 May 2019
3 Royal Ga zette , 3 May 2019 a term that can be misunderstoo d, misinterpreted,
Madam President. And if you would allow me, I would like to just give the definition of this particular term inology.

The President: You may, Senator Jones.

Sen. Marcus Jones: According to Google, “universal
health care” is “all citizens have access to affordable
high-quality medical care, which can be funded and
managed by the government where the system could
use both public and private health care servi ce pr oviders.” So, that is one definition of universal health
care.
Now, another word or another phrase which is
bandied about that is similar to this definition of universal health care is “ socialised medicine .” And, Ma dam President, if I may read a definition of socialised
medicine. Socialised medicine —“a health care system
where the government both operates the health care
facilities and employs the health care professionals,
with little to no private company participation.”
Now, you in the listening audience, and my
fellow colleagues around the table, may feel that I am
jumping the gun, getting ahead of the debate. But
having watched and observed the lightning speed in
which this Government rolls out its legislation and
does not afford for sufficient debate and discourse, my
thought in even coming here today was at least to get
that co ncept out there into the marketplace of public
opinion and discourse so that we as a country can
start talking about the end game that I believe the
Government is aiming at.
Now, one thing that concerns me, as the
Government takes on more and more of this health care, and fewer and fewer private insurance companies are going to be involved in this whole process,
one of the things that we have seen over the years is
that the private insurance companies have been very, very diligent and very enthusiastic with the health- iswealth promotion. I believe the private insurance realise, as we all do around this table, that the healthier
we get as a people in this country, that will go a long way in reducing the cost of health care.
My question to the Government woul d be, As
the private sector gets more and more, shall I say, marginalised from this health care process, does the
Government have plans to do even more in regard to
promoting health and wellness? Are you going to budget significant funds to ensure that the public is
educated on things like the chronic illnesses that plague this small Island —diabetes, obesity and the
like? So, those are definitely some of my concerns as
we start to bend towards a government -funded, a
government -managed- type of health care.
Now, one thing I would say in regard to this
consultation, the original legislation was drafted and
rolled out, the health insurance plan of 1970. Now, that was 49 years ago. I wonder if we even had 49


Bermuda Senate days to have consultation and discussion and specific
technical discourse about this amendment to the
Health Insurance Bill. I cannot belabour that point
enough.
Now, I do have a couple of more observations
and possible questions that the technical officers can possibly answer for us before we come to the end of
this debate.
First, let me give another illustration of my
concern about health costs. Earlier this month, I had
to take a senior member of my family to the doctor, to the physician, for an annual health check. Of course,
she is on FutureCare. I was able to take her in, and I
realised as I was about to pay for her co- payment that
it was $289. I thought that was a large amount of
money, especially since on my last medical when I
went to my doctor, my co- pay was $150. Now, I rea lise that she is under FutureCare, and I was under m ajor medical. But herein highlights one of the overriding
issues that we face as a community.
Now, I was at my doctor’s office for about two
and a half hours. I was plugged in to every machine
known to man. I could not see the ski n on my body for
the wires that were hooked up to me. The cardiovascular testing that I went through was a rigorous exercise, and a doctor was poking at every space within
my body, two and a half hours.
And this senior member whom I took to the
hospital was there for 15 minutes. And I was saying,
What? I share that story because I really, truly believe
that one of the ways and one of the things that we
need to focus on as a country is . . . and I know that
there are set prices for different services that ar e done
in the hospital, as well as within the external health service providers. But something must be done and
said if physicians and other service providers can
have a wide range of co- payments for those seniors
and for able- bodied working men and women in this
country, [but] where the user of these services cannot
readily be able to compare prices.
Now, I spent most of my working career within
the hotel business. So, especially here in Bermuda, if a person is coming and looking for a place to stay he can quickly find out if the hotel that he is staying at is
a four -star, is a two- star. If it is a two -star hotel, there
is an expected price range that this consumer is going to be expecting to pay out. If he is staying in a four -
star, he is going to be expec ting more amenities. He is
going to be expecting the restaurants to have meals that are far more expensive, compared to the lowly
two-star hotel that may just have a snack bar som ewhere. So that consumer is really aware of the comparison of prices of the product that he wants.
Now, let us take that into the health care sy stem. It is not user -friendly. It is more geared to the
provider. You can try your best to nail down the cost, for example, of a physician to sort of determine, okay,
do I want to go to Phy sician X or Physician Y? What
types of services do they give? How vigorous of an annual physical do they do? What lists of testing do
they do that is going to take care of my needs? It is
not user -friendly. The health care system that we have
here is geare d to the service provider.
And again, I hail back to the challenge that
was made to the private insurers that we are claiming
are out to get profits and are looking to take advantage of the system, when we have the actual pr oviders who are not strenuously regulated, as they
should be, so that this can be the target where we can
drive down health care costs. So my question is, as the private insurance companies come out of the
health care business, are we as a public going to be
comfortable and satisfied that the gap that they leave
behind, which they practice in regulating the service
providers, i.e., are the doctors over -referring their patients for testing, for diagnostic imaging? Are they
sending their clients overseas more so when they
should be settling on sending their clients to local service providers?
These types of questions have been asked
strenuously by the private insurers, because they
know that their bottom line is either made better by
them scrutinising possible overcharging by the service
providers, or made worse if they do not pay attention
and read the fine lines and make sure that the service
provider is not taking advantage of their clients. So, that extra level of policing and checking on the service provider may be lost as the private insurers step away
from the model that is now being introduced, I would
feel far more comfortable if I knew that the Gover nment entities will be just as vigilant.
Then we look at the newly formed, I call them
“mini hospitals” that are starting to come on the horizon in the City of Hamilton. What will the Government
be doing? Will the Government be encouraging many
of the public to come to the hospital for their SHB
benefits? Or will they be actually encouraging the public to actually utilise these external service providers? We know, and we have heard the stories of some of
our loved ones having to sit in the emergency room
for five, six hours to get service. And we have heard of
the challenges of there not being sufficient beds in the
hospitals, where some of our loved ones have had to
sit out in the corridors as they wait for a bed and wait
for a room to be made available.
So, those things, those inefficiencies definitely
have the concern of the public. And the public would be far more amenable to this change in the modelling
of the funding of the hospital for its SHB if there were, I guess, an education of the public on what the Health Council watchdog does to make sure that services
meet the demands of an ever -ageing population
where many of the working younger generation are
finding it far more better to their liking to leave their
home shores and go to the UK or go to America. We
need to be able to keep a handle on that.
Madam President, I believe that I have expressed my concerns about this amendment to the
476 22 May 2019 Official Hansard Report

Bermuda Senate existing legislation. Again, I do wish that more time
was afforded for both those stakeholders within the
community who have expressed to us their dismay
and disappointment that insufficient time was afforded
for them to actually crunch numbers and possi bly pr ovide solutions to the Government. I also want to rei terate what we are hearing, and that is that the private
insurers do not want to be demonised, do not want to
be made to look like profit -grabbers over taking care
of the wider public when it comes to health care, that
greater collaboration and working together helps us to find solutions far more quickly than statements that
are made to (like I said, I will use the word again)
“demonise” the private insurance companies.
And with those comments, Madam President,
I take my leave.

ANNOUNCEMENT BY THE PRESIDENT

SENATE VISITORS

The President: Thank you, Senator Jones.
And before I open it again to other Senators to speak,
I would just like to acknowledge the fact that we did
have the Minister of Healt h, the Honourable Kim Wi lson, here for a short while, and also the Minister of
Home Affairs and the Deputy Premier, the Honourable
Walter Roban.
I would also like on behalf of the Senate, to
welcome Kathy Lynn Simmons, the Attorney General,
who indicated t hat she was not feeling well. And she
has got off her sick bed and come in to support us in the discussion and debate of this Bill; and also acknowledge Jason Hayward, who, we were also told,
was not feeling well. So, on behalf of the Senate, I
want to wel come both of you for coming today, even
though initially you were not feeling well.
[Health Insurance Amendment Act 2019, s econd
reading debate, continuing]

The President: Would any other Senator care to
speak?
Senator James Jardine, you have the floor.

Sen. James S. Jardine: Thank you, Madam Pres ident.
Madam President, before I sort of get into the
meat of it, I want to first acknowledge, for the sake of
full disclosure, that I am a former director of one of the
local health care providers. Having retir ed from that
board some years ago, I no longer have any involv ement with that company or, indeed, with any other health care provider in Bermuda or outside Bermuda.
The next thing I wanted to say and make clear
is that I do believe that access to health care is a basic right for all Bermudians. There is no question of
that. And also, probably one of the most important, if
not the most important issue of the day is controlling our health care costs and looking at ways to reduce them, going forward. How we do that, obviously, is the
question that is on everybody’s mind. And it is complex, and it is not something that can be done overnight.
So, Madam President, with those few comments, I will get into the meat of my comments today.
Much has appeared in the news media over the last
few weeks about the proposed amendment to the
Health Insurance Act. However, there has been little
information on this proposed amendment prior to April, and just exactly what those changes would be
and how they would impact the average person in
Bermuda. So, this has all happened fairly quickly. And
there are a number of people who are still trying to come to grips with what this actually means.
Madam President, I attended the town hall
meeting on this subject last Thursday, which was informative and provided some answers to some of the
questions and concerns that I had. The only other
source of information on this particular issue can be found on the Bermuda Health Council website, and
there is some very good information on there, whic h I
was able to pull off, one entitled “Standard Premium
Rates —2016 to Present.” And “What’s New: 2019/20
Standard Premium Rate.” And so, a lot of the information which I sought to gather came from infor-mation which is available on the Bermuda Health
Counc il website and some other sources that I dug
around to find information.
Madam President, while I appreciate that the
Government wants to enact these changes by June
the 1
st of this year, it seems to be making this change
far too quickly and has not given the general public,
let alone the insurers —and I include in that some of
the banks who have approved schemes that they run
themselves —enough time and opportunity to figure
out what this means to them and the community at
large, and to put forward viable pr oposals, alternative
proposals to the Government of the day.
As the Minister told us at the town hall meeting, the 2018 actuarial report recommended an i ncrease of some $84 in the Standard Health Premium
per person per month, which works out to approx imately $48.5 million on an annual basis. So, that is a large sum of money; there is no question about it. And that would have represented a 24 per cent increase in
the [SHP].
I tried to get a hold of a copy of the 2018 actuarial report, but was told that it would not be r eleased to the general public until June 1
st, which, of
course, is after the date at which this Act takes effect. I am pleased to say that late last night or early this
morning, I check it every day, miraculously, the 2018
actuarial report appe ared on the Health Council website. So, I quickly scanned it to try to get some infor-mation off of that for purposes of this debate today.
Unfortunately, that report is sort of excerpts
from the full actuarial report, and that is some inforBermuda Senate mation that was included in the 2017 report which
may not have found its way into the 2018 report. So, it
was difficult to see what really caused the actuary to
say, You need an extra $84 per person per month.
And, you know, that may have been an initial comment from the actuary, and then when he issued his
final report, all of that information just disappeared.
But, certainly, I could not find it.
Madam President, I can understand the Mini ster’s concern and her need to avoid increasing the
SPR by this amount, if at all possible. For the listening public, as we know, the most significant part of the
proposed changes will result in a 226 per cent i ncrease in the amount of money paid to the Mutual Reinsurance Fund, and thence to the Bermuda Hospitals Board. This means that 93 per cent of the Standard
Health Premium of $355, or approximately $195 mi llion, by my calculation, will be paid into the Mutual Re -
insurance Fund. And those numbers are based on the
actuary’s report of 49,000 insured persons in our pop-ulation.
As far as I can gather, this amount, together
with the hospital grant from the Consolidated Fund, will make up the $330 million lump sum amount that
the hospital will need in order to operate for the ens uing year. And just a couple of refresher points for the
public at large just in case they missed it, and there
have been three or four articles in the Royal Gazette
and Bernews, which have laid out some of these
facts. And the first is the insurers will still be respons ible for collecting the Standard Health Premium. So,
they are still responsible for collecting that. They will keep only $23.34 of that premium to cover three ar eas. Probably the most noticeable one is outpatient
diagnostic testing.
Now, by my calculations, the premium for being responsible for that, in total, for the whole year,
works out to about $10.3 million. However, the total cost for diagnostic imaging for 2017, as per page 23
of the 2017 actuarial report, was over $37 million. So,
we are getting $10 million of revenue to cover $37
million of imag ing claims. Now, it is not clear from the
report, in all honesty, what portion of those imaging
claims are hospital imaging claims or claims from service providers outside of the Bermuda Hospitals
Board. That information is just not there. But certainly, if I were an insurer, I would be concerned that this tiny
bit of premium that I am getting per person per month
is not going to be sufficient to cover those costs of
imaging from the general service providers.
The 2018 report, which I quickly scanned this
morning, did show some good news. And it showed
that the imaging number, or cost, has dropped from
$37 million to $24 million. So, I guess that if there is
some good news in the 2018 report, it is that. And I
will leave it there.
The hospital will be respon sible for processing
all of the claims, as they have in the past, so no real change there. It appears, from what the Minister said at the town hall meeting, that insurance cards will still
be required to be shown when attending the hospital
for treatment. But the question is, obviously, What
happens to those with no insurance and, therefore, no [insurance] cards when they show up to the hospital? Presumably, they will now just be treated without any
question, even though they have paid no premium. I
have no idea how that is going to be handled, but pr esumably that will be tracked in some way and the st atistics at the hospital will be retained.
The hospital will be responsible for recording
treatment data just as they are now, but who will be
checking the treatment being given to make sure that
it is in accordance with the Standard Premium Benefits? Presumably, the hospital. But one insurer has
argued that because the insurers are no longer r esponsible for processing and reviewing those claims,
there is no independent party attesting to the validity
of the treatment that is given for the charges that are
being given or the treatment that is being given at the
hospital. That is to say, making sure that it is in accordance with the benefits granted under the prov isions of the Standard Premium Rate. Pretty important
thing.
I understand reading from the fact sheet that
was just issued yesterday by the Minister that the
hospital will be sharing this claims information, or as
they are now calling it, “hospital utilisation data” (I think I have that term right) with the Bermuda Health
Council, who will then share that information with the
insurers. So, the insurers will need to know how that
information is going to flow and how current it will be.
Madam President, I hav e analysed the components of the Standard Health Premium, as well as the loss ratios for the two insured sections, that of the
government plans and that of the private sector plans,
over the last four -year period, from 2015 to 2018. And
the loss ratios are as follows, just for the general public: Government plans varied from a loss ratio of
122 per cent to high of 144 per cent over that four -
year period. The private plans varied from 80 per cent
to 89 per cent, and that 80 per cent number, again, is
just fr esh off the 2018 actuarial report.
Of course, there are a number of reasons why
the government plan loss ratio exceeds 100 per cent.
These include, but are not limited to—and I stress not
limited to, because there are other factors at play
here. But certai nly, there are a couple of key factors to
bear in mind. One is care and claims for the elderly
over 65 are much higher than the premium charged,
and this area is heavily subsidised. Secondly, HIP also covers the people who are on financial assi stance, and their claims are historically much higher
than they are for options. So, there are reasons why
the government plan loss ratio is as high as it is.
Madam President, there has been much said
in the news media from two of the insurers about the disruption thi s will cause to their businesses. The lack
of consultation that has taken place between Go v478 22 May 2019 Official Hansard Report

Bermuda Senate ernment and the insurers and the many questions and
concerns that they have regarding the operation of the
Standard Health Premium and benefits, going forward. And t hese have been expressed by two of the
insurers in a variety of Royal Gazette articles —May
the 3rd, May the 11th, May the 14th, and a Bernews
article on May the 2nd. There was also what I would
call a to -the-point article from Martha Myron on this
subject just a few days ago.
Madam President, the speed at which the
Government is moving forward with this change has
left little time for adequate consultation or consider ation of the possible unfavourable outcomes of this
move. And, as Naz Farrow, from Colonial , put it in a
May 14th, Royal Gazette article, if I may quote her,
Madam President?
The President: You certainly may, Senator Jardine.

Sen. J ames S. Jardine: She said the following: “The
situation is complex, with the potential to deeply affect
the lives of thousands of Bermudians across the board. The views of all stakeholders must be carefully
considered in order to achieve reforms that are s ustainable and that bring about much better health outcomes.”
So, Madam President, what are the financial
implications of what is happening here? As I said ear-lier, the Mutual Re -insurance Fund, and , by extension,
the hospital, will receive approximately an extra $195
million with the proposed change, which would have
gone to the insurers in the past. The hospitals will now
be responsible for covering all of the costs associated
with treatment under the Standard Health Benefits,
except for outpatient diagnostic testing and a few ot her small areas, which will fall to the insurers to cover.
And I have mentioned that earlier.
At the town hall meeting last Thursday, we
were provided with a pie chart which showed that, by
switching to this new basis of funding, $50.67 of the
standard basic premium would no longer be used to
cover administration costs and profit. Now, I do not
know where this amount came from because, accor ding to the details of the Standard Premium Rate, which I have gone back over the last five y ears and
analysed, there is no amount in there for administr ation costs and profits. So, I am not sure where that
number came from, because the only administration I
can find in their costs are $1.06 for administration for the Health Council and Mutual Re-insurance Fund,
which continue under the new plan. So, where this number has come from, Madam President, is a my stery to me.
I do know that, with a loss ratio of 80 per cent
for fiscal 2017/18, the private plans would have netted a contribution of approxim ately $20 million. And ma ybe that is where the $20 million in cost savings that the Government is talking about is coming from. Let
me just say that again. I do know that with a loss ratio of 80 per cent for fiscal 2017/18, the private plans
would have net ted a contribution of about $20 million.
However, I should point out that, according to
a May 14
th, 2019, Royal Gazette article, the actual net
profit on this business is only about 5 per cent. So,
effectively, the $20 million transfer in net revenues after claims that I had mentioned above results in a
much smaller amount of profit to be shared by all the
private insurers, including those companies with a pproved health care schemes, because all of that mon-ey is now going to the hospital. So, I presume that is where the $20 million in savings is coming from.

Sen. Jason Hayward: Point of order, Madam Pres ident.

The President: Senator Hayward, what is your point
of order?

POINT OF ORDER
[Misleading]
Sen. Jason Hayward: I think the Senator is inadver tently misleading the House. The Government has
never spoken about $20 million in savings. The funding change prevents $20 million of added spend to the
health system. I think the language is substantially
different.

The President: Senator Jardine, carry on.
Sen. James S. Jardine: Thank you, Madam Pres ident.
Perhaps I can rephrase and say that by transferring the $194 million of premium to the hospital, if
the hospital does not incur any further costs of hiring
staff or anything else, they will net $20 million, bottom
line, out of that premium which they now have.
So, some would say, Is this fair? Some will
argue it is the right thing to do. Others will argue the
contrary. But, Madam President, my concern is not so
much with that; it is how this change will affect the
average Bermudian and non- Bermudian, for that matter. As I understand it, the hospital will be able to co ver its operating costs with the lump sum grant of $330 million, part of which will now come from the additional
funding provided by the Mutual Re -insurance Fund.
The grant is capped at $330 million.
Well, Madam President, we know by looking
at the 2018 National Health Accounts Report, which I
printed out, the total cost in 2017 to run the hospitals was exactly $330 million. We do not have the i nformation yet for 2018 or 2019, so we do not know what
the costs were for those last two years. This is why I
asked the question at the town hall meeting, What
happens if the cap of $330 million is exceeded? The
response was that the hospital will be able to cover
that with the additional $65 million of cash that they
currently have on hand. And I understand that. The


Bermuda Senate concern is, I do not think that they can continue to do
that for too long. There will have to be a point in time
where additional funds will have to be sourced from
elsewhere.
Madam President, I know this debate is not
about the hospital expenditures. But it is noticeable
that we only have audited accounts for the hospital to
March 31st, 2014. This means we have five years of
outstanding accou nts which we have not seen yet.
And for an operation that represents some 46 per cent
of our total health system expenditures, it is extremely
important that these accounts be made available on a
more timely basis, in particular to us who sit here in
the legislature, but also to the public at large so they
can see what the costs are for running our hospitals
here.
I prepare and keep an analysis of all of the
hospital’s expenditures since going back to 2004. And
unfortunately, in 2013 some of the information that
was contained in the financial statements, which
broke out the salaries in the six key areas, has now
disappeared and we just have one total.
That particular detail was extremely important
because it broke out where the salaries were in each
critica l department in the hospital. And I would certai nly urge that this information be put back in the financial statements.
Madam President, I apologise for the slight d iversion, but I think it is important to stress that our hospital costs keep rising. And because it is the single
most important or largest component of [our] health
care costs, it needs to be looked at with some urgency
and diligence. And we have heard from Senator Jones the concern about the other service providers’ costs,
as well. And again, I have tracked those since 2004,
and they have all gone up by about 91 per cent. So,
across the board, our total health expenditures have
gone from $378 million in 2004, they are now up to
$723 million in 2017. Some massive increases have occurred over the last 10 years. And certainly, it is of
great concern.
Based on the sudden change to our health
system some insurers have said the effect of these
changes will impact, in part —and I stress in part because certainly one insurer has indicated that it was
only part of the reason why they have increased their
insurance rates —the health insurance premiums that
they will charge their customers for 2019 have gone up. I have heard that increases of between 7 [per
cent] and 20 per cent are being experienced by employers and employees in some companies.
A close friend of mine told me only yesterday
that he had received his notice from his insurer, and
his insurance premium has gone up by 25.5 per
cent—25.5 per cent. But the real impact on health i nsurance expenditures will be unknown for some time.
Again, it obviously takes a long time for this information to be put together so we can see where it is going. One insurer has explained that rate increases are a combination of several factors, namely, the ri sing health car e costs generally; overall claims exper ience of each group; and lastly, Government’s pr oposed changes to the distribution of the SPR. As I
have said before, in all fairness it is not just these pr oposed amendments that we are talking about today,
but there are other factors that are at play that have
caused this increase.
But as we heard from Senator Jones, a number of insurers have all turned in solutions, which they were in the process, as I understand it, of putting forward to the Government. And it seem s to me that
these should be considered. Another insurer produced
a health Q&A sheet, which was attached to the May 14
th, 2019, article in the Royal Gazette. That particular insurer said in her comments to the Royal G azette . . . and if I may quote her, Madam President?

The President: Yes, you may, Senator Jardine.

Sen. James S. Jardine: “[We] are disappointed the
Bermuda Government’s proposed healthcare reforms
are ‘rushed’ and do not address the real drivers of
spiralling healthcare costs . . . includin g overutilisation,
healthcare inflation and an ageing population. These
challenges must be confronted if we are to secure a
sustainable future for Bermuda’s healthcare system.”
And she further explained, Madam President,
for her clients, “it means that th eir total claims exper ience— whether they use the hospital or not —cannot
be factored into their health insurance policies, ther eby removing one avenue to lower premiums. . . . Because the set government fee is based on the entire insured community’s experience, the fee will be greater than the premium many of our clients would otherwise pay.”
So, Madam President, while there may be no
increase in the Standard Premium Rate determined
by Government, these changes contemplated in the
Bill before us will result in some cases in higher health
premiums for a significant number of insureds.
Madam President, insurers have five choices
when it comes to changes in their business model.
And they are as follows: One, they can do nothing and
simply absorb the change and make less profit. Two,
they can decrease overheads by reducing staffing
levels in areas where they are no longer required. For
example, since the insurers are no longer required to
process and maintain adjudication over the Standard
Health [Benefit] claims , they could lay off staff, since
the staff who were previously used to do that may no
longer be required. So, that is the second alternative.
Three, they could increase other health insurance premiums to compensate, where they can justify those increases. Four, some combination of the last
two; or lastly, they could just get out of the health i nsurance business altogether. So, businesses who are confronted with this sudden change are wrestling with,
What do we do? And those are the alternatives which
480 22 May 2019 Official Hansard Report

Bermuda Senate they will have to deal with. And it remains to be seen
which of those options the insurers will go with.
Madam President, there are some other concerns I have, some of which have been expressed by
others outside of this Chamber, which may come about as a result of this change. And they are as follows: The first is utilisation. And I think Senator Jones
touched on that in his remarks. Will the hospital see
substantial use or increase in the utilisation of its facil ities now that it appears that all will be attended to at the hospital regardless of whether or not they have any insurance coverage? Will the hospital become
overloaded and thus unable to cope with persons on a
timely basis? If this happens, what can the hospital do
to alleviate this possible situation? Will those who can
afford it seek treatment overseas as a result, and what
will be the possible increase in cost of that scenario?
So, there are a lot of questions here.
Secondly, impact on employers and emplo yees. Will the cost of the additional benefits currently
being provided by employers be too much and force them to reduce the benefits that they provide for their
staff? Or will their staff simply opt out of any additional
benefits because they are just too expensive? Will
employers think twice about hiring more staff because
it is now going to cost them more in terms of health
insurance if they provide more than the Standard Health Benefit?
Because of the uncertainty in the minds of
some, we do not know what impact this sudden
change will have in other areas. Many are expressing
high levels of concern and uncertainty. And I have
spoken to a number of local Bermudian businesses in all areas. And I have also had information given to me
from the international business community, which I will
share with y ou in a minute. But there is concern out
there, real concern —disgruntled employees, because
they are now being faced with some pretty substantial increases in their health coverage. Will companies
faced with higher insurance premiums start to charge
more f or their goods and services in order to compensate for these increased costs? Who knows? I have
heard one say, Yep. Already underway. Will families
and companies decide that Bermuda is just too expensive and leave?
Will companies who thought they might com e
here think twice because of the cost of health care?
Maybe it is cheaper somewhere else. Will still other
companies decide to leave because of the higher
costs? These are my main concerns, Madam Pres ident. There are others, I know, but those are the ones
that I am really concerned about.
Madam President, last evening, I received a
letter from ABIC, which has also been endorsed by
the Bermuda Chamber of Commerce, the Bermuda
Employers’ Council and the Bermuda Hotel Associ ation. And with your permission, Madam President, I
would like to read extracts from that letter. I think it is particularly important that the listening public hear
these. Would you grant me permission?

The President: Certainly, Senator Jardine, yes.

Sen. James S. Jardine: And it starts by saying,
“Bermuda’s business associations, the Association of Bermuda International Companies, Bermuda Chamber of Commerce, Bermuda Employers Council and
the Bermuda Hotel Association represent all se gments of the economy and virtually all private sector
employment, and they are very concerned about the impact of the changes contained in the amendments
entitled Health Insurance Amendment Bill 2019.
“We know that these proposed amendments
will impact cost and, perhaps more importantly, access to comprehens ive quality health care for Berm udians with limited financial resources. Premium i ncreases have been announced by insurers, as the
amendment Bill fundamentally and adversely changes
the claims experience models of insurance companies, affecting costs and t he competitiveness that has
benefited the Island. The employers that cannot afford
the premium increase will either pass the increased
costs onto their employees, many who cannot afford
it, or organise only basic insurance coverage for their
employees.
“Local employers, who employ the majority of
Bermudians, will be the ones most likely to cut other costs, including employment, in order to pay the i ncreased premiums. International businesses have fr equently commented on the high cost of doing bus iness in Bermuda, and the impact of the amendment Bill will exacerbate the concerns, making it more diff icult to attract new business and maintain the bus inesses and jobs that we have.” Pretty cold, stark
facts.
“The amendment Bill will alter the checks
monitoring wi thin the health care system for overutil isation and appropriateness of health care, since the insurance companies will no longer be providing that
service to control costs of the Standard Hospital
Benefits programme.
“It is important to note that the local economy
has been mired in a recession for many years. And any extra expenses that the community has to shou lder are not likely to be borne without consequences.
We respectfully ask you” (that’s me) “to use your efforts to persuade the Government to tempor arily wit hdraw the amendment Bill so that a robust consultation and review of alternatives may take place. We strong-ly believe this is necessary. The Government has not
justified the need to move this amendment Bill so
quickly.
“Additionally, we believe the Government is
moving ahead in the face of increase in the cost of
health insurance for the working population and for
businesses.”


Bermuda Senate Madam President, that is an extract of co mments in the letter. And I specifically asked if I could
mention those today, and I was told I could. So, I think
it was important that I do that because there has been very little public comment from the business sector and from individuals on this, except if you read the
comments attached to the articles in the online articles
on the Internet. So, I think it was important to read that
because that is coming from the international bus iness community. It is coming from the local business
community. And they are very concerned.
So, Madam President, this amendment does
nothing to reduce h ealth care costs, but simply holds
the fort against cost increases, hopefully, at the hosp ital. It is able to do this by seeking to change the way that service at the hospital is charged, going from a
fee-for-service approach to lump sum grants. And
again, I do not necessarily have a problem with the
change in that particular methodology. I think the concern is the speed at which it is happening and also
how it is being covered in terms of costs.
This change does not address the real issue,
and that is to reduce health care costs. In fact, it will,
in my opinion, result in increased health care costs.
And we have just heard from that letter I just read out
why I believe there will be increased health care costs
generally throughout the Island. How much and just where we will come out at the end of the day is an ybody’s guess. I would personally have liked to have seen far more consultation with the insurers, in parti cular, and others, to find real solutions to reducing
health care costs. Many are only just no w finding out
the facts. And again, I have spoken to a number of
them who are just beside themselves in terms of how
they are going to fund this additional premium cost.
In my view, this has all happened far too
quickly with insufficient consultation and t ime to reflect
and look at possible alternatives, with the undesired result of higher insurance premiums being levied on
many in Bermuda. I would urge the Minister to pause
and consult further, and look at other alternatives before ploughing ahead with thi s amendment.
Thank you very much, Madam President.
The President: Thank you, Senator Jardine.
Would any other Senator care to speak on
this Bill?
Senator Robinson, you have the floor.
Sen. Dwayne Robinson: Thank you, Madam Pres ident.
I also believe t hat health care for all is a basic human
right. And I believe that most of the Senators who have spoken so far have outlined exactly what I wish
to outline as far as my reservations towards this particular legislation. But since they have been outlined this so well, I would like to focus mostly on something
that I heard in the brief, which mentioned younger generations paying for older generations. I think this is one of the main gripes that many people have come
to me, [those] in my age bracket and I have put up a
few things and went to speak to a few of my peers.
And it just seems to them that with the state of things
and the prices rising and Bermuda’s cost of living that they will be the ones left with this Bill if we push forward.
I do believe that univ ersal health care is i ndeed something we should look at. And I do believe that if there was a pinpoint bullet point presentation as
far as how we were going to take a step to do this, being that we have so many other beasts to tackle
before we can even dis cuss lowering health care
costs, we have to tackle how to increase the healthy
options for our people or else the health care costs
will continue to increase regardless of what changes
we make. There will always be people paying more because we have an age ing population, and eventually there will be fewer bodies paying into this system.
So, until we tackle these present issues, people will remain pensive and they will continue to stand
confused as to how exactly health care can drop when we have these glari ng, blatant issues to still tackle.
And I know that many Senators have already mentioned it, so I will not harp on it too much. But I do believe that this is the main cause, of health care. We
have to figure out how to get more folks paying into the system , or else it will always, always be a rising
cost.
And even to discuss the goal of universal
health care one must then analyse exactly how we can transfer into that system, and what we require. Because if you look at universal health care in other
countries, it usually comes with a raise in taxes or a
tax dedicated to funding that. And folks have agreed
to pay this tax and also feel confident in paying this
tax because they have a clear insight into what care
they can get, what standard of care they can get . And
a lot of folks in Bermuda have constantly complained
that, when they go to one doctor they get one set of
treatments, and when they go to another doctor they
get a different set.
So, my question will also be, on this topic, Is
there a standard operating procedure as far as doctors are concerned when they come across? Because you have a doctor who might be trained in India, and
you have a doctor who may be trained in the Caribbean, and they may practice differently. So, with universal health care, we all have to know that if we are pa ying into a system, that we will get the same standard of care.
So, there are a lot of questions that we will
have in the community regarding that which I feel
have not been answered and have not been given
proper time for people to digest, because speaking as
a layman myself, I am not an expert in health, so it requires me to do a lot of digging and a lot of research leading up to this. And I will say that I did see the efforts of the Government to give some sort of consul ta482 22 May 2019 Official Hansard Report

Bermuda Senate tion to the people and some sort of explanation. I did
see the town hall; unfortunately, I was working and I
could not attend. But I do believe that to overhaul an
entire system, Madam President, it should be taken a
bit more seriously than it is current ly. It is not som ething that we can just shotgun through or set up and
do two readings in one session, when we are the
watchdogs of legislation.
We know it is going to pass in the House, so it
is up to us, you know, to put the brakes and say, Hey,
there is still a lot of confusion around this Bill, a lot of
tit for tat between the Minister and the heads of insur-ance, a lot of people posting on Facebook about how
they are not sure, about confusion as far as what the
changes are. Many people believe that ther e is just a
cost factor on top. So, you know, it is just . . . we cannot push forward with legislation without making sure that our people are properly notified or at least have a
way to feel safe that their taxpayer money that they
are paying is going to be put into a system that they
can rely on.
And then there is the difference between sa ying that it is for people reasons and not for business reasons. And this particular thing did not sit well with
me, because I feel as though businesses are our people. And this line that is being drawn, our people are
employed by these businesses. If they incur costs
where they can no longer sustain employment or can
no longer sustain health care benefits for their people,
then we are in a catch- 22. Nothing will move. Pe ople
will be unemployed. People will be laid off. We have
already seen businesses close. We have already
seen layoffs in places that should be a bit more stable than the average Bermudian business, such as banks.
So, what exactly are we saying with this Bi ll?
What are we as a legislative team saying that we feel
is so . . . that this huge change can be properly analysed and properly broken down in one session? So, I
am not going to go back into the specifics that Senator
Jardine and my colleague, Senator Jones, have laid
out, because I think that they did an excellent job at it.
But this is what I want to leave with.
The youth and the young folks of Bermuda
right now feel as though there is no path for them to
get ahead in this country. And I am not going t o speak
for every single one of them. But I have done my fair
share of canvassing. And I feel as though this is
something that we have to assure them that they will
not be left holding a big, fat cheque because we
wanted to do some people- pleasing legislat ion that did
not actually tackle the actual issues that will be left for future generations to tackle.
So, with that, Madam President, I end my
comments. Thank you.

The President: Thank you, Senator Robinson.
Well, Senators, it is now 12:24. Do you want
to break for lunch? Because I think that whoever else
wants to speak, I am sure they will want to speak for more than four or five minutes. So, shall we break for lunch? I am putting it to you whether or not you would
like to break for lunch and we will res ume?
Yes? Fine.
So, Senators, we will break for lunch and we
will return at 2:15. Yes. Thank you.

Proceedings suspended at 12:2 3 pm

Proceedings resumed at 2:16 pm

[Sen. the Hon. Joan E. Dillas -Wright, President, pr esiding ]

BILL

SECOND READING

HEAL TH INSURANCE AMENDMENT ACT 2019
[Continuation thereof]
The President: Good afternoon, Senators and listening audience. The Senate is now continuing with the
second reading of the Health Insurance Amendment
Act 2019.
So, I will now ask if there is any oth er Senator
who wants to speak.
Senator Michelle Simmons, you have the
floor.
Sen. Michelle Simmons: Good afternoon, everyone.
Thank you, Madam President.
I would like to begin my comments by saying
the provision of health care is complex. That word has
already been used at least three times around the t able this morning. This is not just in Bermuda, but it is
in just about any democratic society. There are so
many parts to the system, and I am sure I am not
alone in having to take time to recognise and then to
try and understand how all the parts fit together. It is a
complex system.
All of us accept that the cost of health care in
Bermuda is fast becoming unaffordable by the aver-age person. So, we cannot allow that situation to con-tinue. Madam President, I am going to go back to a
quote you permitted me to use some time ago. It was
during the economic debate, and I am going to ask you if I can share it once more.

The President: Absolutely, Senator Simmons.

Sen. Michelle Simmons: It is from the . . . it is from
page 42 of the 2016 Population and Housing Census
Report. This is it: Eight per cent of our population is without health insurance— an increase of three percentage points since 2010.
Madam President, this represents 5,341 people. That is up from 3,233 people without health insurBermuda Senate ance in 2010. Now, obviously, I have not done a trend
analysis, but it looks as though the number of people
in Bermuda who do not have health insurance for various reasons is increasing.

The President: Mm-hmm.

Sen. Michelle Simmons: I do not have any figures
for 2019, but I am going to assume the number is
close to the 6,000 figure I heard Senator Jardine mention this morning. It is worth noting as well, Madam President, that the 45- to 64- [year] age group (and this
is still from that report) that age group, the 45- to 64year age group had the highest number of uninsured persons, i.e., it was 1,541, and following closely be-hind them was the 15- to 29- year-old age group, with
1,286 uninsured persons.
I think we should also tak e a moment and r eflect on this fact: Thirty -six per cent of those people
who were uninsured, i.e., had no health insurance,
were employed. So, they are working! The remaining
64 per cent who did not have health insurance were
evenly divided between those w ho were economically
inactive (and I assume this means they may be self -
employed people who were not working), and the unemployed. It just does not seem right for people in
Bermuda to be working but unable to afford health insurance coverage. Not only are they putting themselves at risk, they are putting their families at risk, for
obvious reasons.
I am pleased, very pleased, that Government
has recognised that Bermuda’s cost of living, and this is a quote, if I may use it, from the Throne Speech—
The Pre sident: You certainly may.

Sen. Michelle Simmons: —delivered on November 9
th, last year, Madam President: “Bermuda’s cost
of living is negatively impacted by the high cost of
health insurance,” and it continues in the Throne
Speech, Government promised to, I quote, “Change
the way we pay for health care and make it more affordable by expanding access to coverage at better
rates.” And Senator Jardine, I believe, used the same
quote this morning.
Today, we are here talking about one of the
key contributors t o our system of health care, and that
is our hospitals. We are also talking about how the hospitals should be funded going forward. Indeed, it
has already been acknowledged that the hospitals
account for the most costly part of the health care sy stem.
Currently, the BHB, the Bermuda Hospitals
Board, derives a large part of its funding by charging
insurance companies for services provided to persons
who have health insurance. This applies to the greater
proportion of our population, but as we know from the figures I have shared earlier, it does not apply to ev eryone. The insurance companies are then billed by the BHB, and in turn, the hospital receives payment for
services rendered, that is under the SHB, the Standard Health Benefit.
Now, Madam President, I hope you will i ndulge me, because I am going to try to share with the listening public and with everyone here, how I have
managed to understand what is going on, what is being proposed here. The change being proposed today,
as I understand it, and correct m e if I am wrong, is
that the Bermuda Hospitals Board will no longer charge the insurers for services rendered to clients under the SHB, i.e., to people who have insurance.
Instead, all insurers will pay the Mutual Re- insurance
Fund, the MRF, premium, into the MRF within 30 days of collecting the payment from the insured. Then, the
BHB will receive these funds, at least the larger pr oportion of these funds, which will be applied toward the cost of its provision of the Standard Health Benefit to insured persons.
So, instead of the hospital now billing insurance companies, it is working quite differently. Insur-ers, or insurance companies, will collect money from
those they insure. They will pay the Mutual Re -
insurance Fund premium into the MRF within 30 days,
and then the hospital will receive, I think it is 95 per
cent or more, or slightly less, of that fund.
As members of the community, and I am
viewing myself as a member of this community, we all
need to educate ourselves as to what is covered by
the Standard Health Benefit. I do not think this information is shared as widely as it should be. Because anything which is not covered by the SHB will either
be billed to the insurer or to the patient. I do note that
(and this is my understanding again, I could be wr ong)
the cost of dialysis will be covered under the MRF now, instead of separately as it has been done in the
past.
One of the comments made earlier by Senator
Jardine was also something I focused on, but I do
have a recommendation to make. I noted as I read through the Bill that is before us today, that information regarding the services . . . actually, sorry, I
read this in the questions. I read this in the information
put out by the Health Council recently. It was a fact
sheet , the standard premium rate in the BHB funding
2019 Fact Sheet, which I found extremely helpful.
I noted that information regarding the services
which the BHB has provided to individual patients will be sent to the health insurer on a regular basis. I am
really happy about that. How ever, there is a gap, because there is no mention of providing this information to the patient, or the client. And that, in my opinion, is something that could easily help us all to understand
more, and also, it could be a way of double- checking
and it could be a way of helping patients understand
where their insurance dollars are going.
I remember many years ago (I am dating m yself) when patients . . . and I personally remember receiving a statement on a regular basis regarding
484 22 May 2019 Official Hansard Report

Bermuda Senate services I had received as a hospital patient. And I
believe I also saw quite clearly in that statement any
services that I had received from other doctors. That
system is worth reinstating or providing in some way
that is more efficient now. But I really think that pa-tients should r eceive as much information as the i nsurers do with regard to the services that the BHB has
provided to them.
I am not sure who is responsible for sending
those statements out years and years ago, but I hope
that this is something that either the Health Cou ncil or,
indeed, the hospital can look into with regard to
providing information to patients about services they
are receiving or they have received. It may even lead
to better decision- making on the part of the patient.
One of the things I noted also in t he fact sheet
was that the BHB is going to be implementing an eff iciency improvement programme, which may address
some of the concerns of individuals I have spoken
with in the community. The people I spoke with are
fearful that the changes being proposed i n this Bill
may put the BHB in the precarious situation of not
having sufficient funding in order to cover the services
it currently provides. And so, I have questions such
as, is there a danger of some services being cut b ecause of a lack of funding? Madam President, is there
the danger of some services being offloaded into the
private sector where Government has no control over
the amounts charged? These were a couple of the
major concerns that individuals were sharing with me
as I spoke to people in the community.
With regard to consultation, which has been
mentioned several times today, I was not that happy
to see that there has been very limited consultation,
as I understand it, with the insurance companies. It
seems as though in making this change with regard to
how insurance companies will liaise going forward
with the Bermuda Hospitals Board, it would have been
appropriate to have, I think, more extensive consult ation than has occurred, according to what I have been told. And I can only go by what I am told because I do
not know how much consultation took place. But the
impression I have is that it was limited.
Another concern that I would like to raise is
with regard to the BHB looking more closely at whet her services that they are rendering to patients are ac-tually the services that they must render. And what I
am referring to is something called “Utilisation R eview,” a system whereby the hospital itself takes a very close look at whether patients indeed need to be
in the hospital. Are certain services that are being rendered to patients in hospital absolutely necessary under those circumstances? Does the patient need to
be in the emergency room, for example? I know this
question has been raised time and time again, and
patients have been encouraged to seek the support of
their GP, their general practitioner, before making the
decision to go to the emergency room. Maybe some
more scrutiny needs to be made in that area. I am also being asked by people in the community about the system that the hospital s et up many
years ago when they introduced the idea of house
officers and hospitalists. Is that system working in the
favour of patients, and at what cost? Because it would seem to me that there was a substantial increase in
staff at the hospital, especiall y in doctors at the hospital, and that would have certainly had an impact on
the BHB’s bottom line. So, right now, Madam Pres ident, I am trying to share some of the concerns that members of the community have shared with me with regard to the change in sys tem that we are seeing.
Madam President, I will share that the intent
of this Bill is something that I do endorse, because it is looking at putting a cap on the services or on the cost
of running our two hospitals. But one of my biggest
concerns, and this is one for me, about what has been
tabled today in this amendment Bill, is that we are
dealing with only one part of the system. It is a major
part. But, in my opinion, if we have a system, Madam
President, that is in some kind of balance, by tinkering
with one major part of the system we stand the risk of
throwing all the other parts into a kind of spasm.
And so, I would really like to urge the Go vernment to go further, because we need to deal with
all the other parts of the system that do not come under t he auspices of the Bermuda Hospitals Board,
under the BHB.
For example . . . and I believe earlier today a
couple of the Senators referred to, you know, the cost
of going to your general practitioner, the cost of going
to a specialist in the system, or in the system outside
of the BHB. What about private medical clinics? What
about pharmacies? What about all the allied health
facilities? None of these have been addressed by the
Bill that is before us today. These services are all crit ical parts of the syst em of health care in Bermuda and
none of them (at least that is the understanding I have
and I stand to be corrected) are subject to Gover nment control, especially in terms of what they charge.
Madam President, I would also like to ask
about the Government ’s National Health Plan. What
progress has been made with that? Because I see that as another major, major component of what must
be retooled in order for us to have more comprehen-sive health care in Bermuda. Is the Government really
considering a system of universal health care, as defined by the World Health Organization? It is som ething I hope that they are looking into.
But tinkering with one part of the system so
far is not going to address the escalating cost of
health care in Bermuda. It may have a small impact.
But I think that by dealing with the other aspects of the
system, we have a greater chance of having the major
impact on health care that we really need.
One other point I took from the Speech from
the Throne in 2018, Madam President, was thi s, and
may I just read it?



Bermuda Senate The President: Yes, you may, Senator Simmons.

Sen. Michelle Simmons: The Government stated in
the Speech from the Throne: “The needs of Bermudians must finally take precedence over insurers’ prof-its.” End of quote.
I am not pr ivy to financial statements from any
insurance companies, so I cannot judge whether this is a fair challenge. But we all know that Bermuda’s
insurance companies have published information on
their profits. Madam President, I am going to ask you once again if I may quote from one of the statements
put out by one of our local insurers?

The President: You certainly may, Senator Simmons.
Sen. Michelle Simmons: And this is from a December 11
th, 2018, report from BF&M on their nine- month
earnings. It says: “BF& M Limited today reported
shareholders’ net income for the nine months ended 30
th September 2018 of $16.9 million. Shareholders’
net income for the prior -year nine[ -]month period of
2017 was $5.2 million.
“President and CEO John Wight stated,
‘BF&M reported strong earnings for the nine months in
2018, along with strong operating results for the third
quarter.’”
And this was one of the most interesting parts
of the statement. “Our earnings were driven by the solid performance of both the Life & Health busines s
and P&C operations,” (I am not sure what that is) “with
continued support from income on non- insurance o perations.” End of quote.
Profits are rising. Just as we need to share
responsibility for the national debt —and “ we” is ever yone in this country —we mu st also share in the sacr ifice which must be made to ensure that everyone in Bermuda has access to good health care. Unfort unately, I do feel that this Bill only deals with the fund-ing of the BHB, and it is being presented somewhat out of context.
But the health care system does require
change, and it does require even more change than we are looking at today, in order for everyone in this community to benefit from affordable health care,
which we all agree is indeed a human right. Madam
President, I will stop there.
The President: Thank you, Senator Michelle Si mmons.
Would any other Senator care to speak on
this Bill?
Senator Kempe.
Sen. Nicholas Kempe: If no one from the Gover nment wishes to speak, I will speak, Madam President. Thank you.

The Presiden t: Senator Kempe, you have the floor. Sen. Nicholas Kempe: As we seem to be in a pattern
of declaring interests, I will also declare that I have no
interest in any health insurance companies, et cetera,
et cetera.
I think kind of everyone around the table so
far seems to agree that we would like to see a system that provides affordable universal basic health care
coverage to our population. My concern is that this Bill
achieves none of those outcomes. It advances that
conversation not one step. It has seem ed to be a very
rushed piece of legislation. The public consultation
and the industry consultation have been utterly lac king. The drafting of the Bill was completed a question
of days before the House had to debate it. We are
sitting here today doing first and second readings in
the same session, and presumably the Government’s intention is to do the third [reading] as well today.
This whole process, as people have said, is a
complex issue. We do understand that health care
costs in Bermuda are a major fac tor which inhibits
people’s quality of life, because it is a major driver of
cost of living. It is a major inhibitor to creating employment in Bermuda because it is a massive cost of employment. It is something that is borne between
50 [per cent] and 100 per cent by employers as a
business cost. But this Bill provides no savings to
those actors in the system. It is simply a transfer of negative claims experience from government’s book
onto the private sector’s book. And I will get into that a
little bit mor e. I mean, we have heard a lot of numbers
around the room. I am going to use some [numbers] in
my time, Madam President, but I am going to try not to
get too deep into it.
But when we looked at the tardy release of
the redacted actuary report late last night or early this morning, we note that the public book runs at about
130 per cent claim to premium experience and the
private sector runs at about 80 per cent. So, the
claims experience for employees in the private sector
is positive, so the private health insurance companies
either do not have to charge the full premium rate or
use the subsidised supplemental. They pool all that
risk in with the supplemental coverage that they offer. This is a far cry from the political rhetoric that we have
heard about ev il insurance companies profiteering, et
cetera, et cetera.
All the Government is trying to do is pull the
positive claims experience. As they have said this rate
was community rated across the whole Island, instead of according to the various pools that ha ve to manage
these policies. So, it is simply pulling that approx imately $50.00 per private sector employee positive claims experience over to the Government. If you add
up the numbers, there are some 34,000 private sector
employees. That is where you get your $20 million.
Now the Government talks about there being
savings, $20 million worth of savings, and I know
Senator Hayward point -of-ordered Senator Jardine
before, so before that happens, I will quote from Mi n486 22 May 2019 Official Hansard Report

Bermuda Senate ister Kim Wilson on March 28 from her press statement: “ The new approach to finance BHB will allow us
to save approximately $20 million dollars. ”
So the only people that are saving money here is the
government; where the private sector is simply being
asked to contribute more to subsidise other parts of
the community. And that is fine, but let’s call this what
it is. It is a tax increase to cover the negative claims
experience of the individuals insured under gover nment policies. It is not an efficiency exercise. It is not an ingenious ploy to rem ove excessive profits from
the private sector. And, if it were, why are not these
magical savings being passed on to those who are
actually contributing? Why isn’t the premium rate for
the private sector being allowed to run its course, or taxes being lowered on the back end or somewhere
else? All this is is a transfer of government’s burden
more so on to the working- class individuals in Berm uda and their employers.
It is simply a driver of the cost of business. It
makes Bermuda less affordable to set up s hop or to
live in. It is simply going to drive up the premiums of
the majority of people that work in the private sector.
Now, if you work in a company that has got a
lot of people that are in that highest -demographic
range under 65, you might not notice a large increase.
But if you work in a company with a lot of younger i ndividuals who were using the hospital services very
little and you were receiving those savings as part of
your collective premium from your private insurance
company, you could be seei ng your monthly premium
go up by $50 to $80 perfectly well. For a company that
is about 20- people large that could be an extra
$10,000 in expense right off the bat. This is going to
clearly have to be passed on through increased cost,
et cetera.
So whilst the Throne Speech quote that has
been used by a number of my colleagues talks about making health care affordable and making it universal,
this Bill that we are debating today achieves neither of
those things. It does not extend coverage at all and it
certainly does not address or tackle any of the actual
drivers of health care cost. Again, controlling costs:
this is the real area, as we have heard from independent financial folks and all this thing, that the three
main drivers of our health care costs in Bermuda are
the excess use of laboratory testing, diagnostic imaging. We have self -referrals between doctors and their
own labs, which we are probably the only country in
the world which still allows that to happen, and we
have a demographic time bomb, whereby our retir ement -age population is growing far faster than our
working- age population. And this move is simply shif ting that burden onto our ever outnumbered working-age population.
And Bermudians are not replacing themselves, so either we need to get more people onto this Island or we need to tackle the cost of the inputs into
the system. Those are our two major levers, Madam President. And this Bill does nothing to pull on either
of them. It simply shifts the burden onto the working
class.
Again, cost of business: We just came off the
blacklist, which was a major fail for a regrettable error. But adding to the cost of business, adding to the cost
of doing business in Bermuda is not going to help us
turn around this situation. We got one self -inflicted
black eye, and this Government seems to insist on
making it harder and harder. Instead of controlling the
cost of government, we see increased spending and increased taxing. The Government has been perhaps
mislabelled as a “Tax and Spend” Government in the
past. I would allege that they are a “Spend and Tax”
Government —spend first and then we will tax later
and try to figure out how to cover it.
We have seen the letter from ABIC which was
sent around to Senator Jardine. I am not sure if an yone else received it. I did not. But t he fact that ABIC is
coming out . . . they are not directly affected by this
policy in the sense that they are offering private insur-ance in Bermuda to employees and they are seeing their mar ket taken away. So, it is not like they hav e a
dog in this fight, but rather, they see what this does to
the cost of doing business in Bermuda. It transfers
that negative risk and we are not seeing those savings
passed on anywhere. It is simply Government passing
off $20 million, but they have not said who the savings are going to be passed on to.
Are we going to see less taxes? Are we going
to see a surplus of $20 million at the end of the year? Because none of this was contemplated in the budget we debated so recently.
We hear talk about efficiencies and better
controls at the BHB, but not one thing has been artic ulated about what these efficiencies are and why could
not these efficiencies have been done without doing
this change. If the BHB can better control their costs,
as I said, controlling the cost of the inputs is one of the major levers. If they can now, all of a sudden, magically control their costs and find efficiencies, why
could not this have been done in the absence of this
Bill? This Bill is a half -baked measure. And Senator
Simmons said it more politely, but it is neither one nor
the other. It is a halfway measure and it really does nothing to improve the system.
We talk about transparency and this kind of
thing. As I said, the fact that the actuary report was released after the Hous e debated it; the fact that
BHB’s accounts are published only through 2014; the fact that the report was abridged, too. I mean, we should be having fully anonymised health usage data
published and put out to public, so that people can
engage with this information, engage with one of the
major challenges that Bermuda has to deal with. We
can actually get some constructive, collaborative sol utions, not just on a bipartisan level, but on a community engagement level. Instead, we are getting this stuff
shoved d own our throat with a Government that likes


Bermuda Senate to throw around its majority in Parliament like it is
some kind of weapon. We need time for these things
to be considered, debated wholesomely, and for the
community to engage with the problem and the sol ution in a transparent manner.
What exactly is the math? We have heard
these vague one- or two- tiered solutions for national
health care. But it is all very vague stuff. And this first
move that has come out in a very rushed and seemingly, kind of, unsubstantiated manner does not fix
any of the things that we heard Senator Richardson speak to in his opening remarks. All these lofty ideals
about universal cover sound great. But they have
nothing to do with this Bill at hand. We are hearing the
fluff, but then we ar e reading the substance and there
is a bridge between them that I cannot connect.
We look at the increased spending at the
Government level and it makes me question how all of
a sudden the BHB is going to move in a completely
opposed direction from Government’s direction on
cost control.
So, I struggle to see how this Bill is going actually do any cost containment. We look at the claims history between the private and the public pools, and
as I said, part of that is the demographic, yes. But a
strong part could also be that the private sector has to
respond to its shareholders. They must find efficiencies; they need to scrutinise the claims that are being
sent to them. If they are miscoded or if there are over -
charges, they will push back because they need to
manage the claims history of the pools of their clients.
We talk about the uninsured and the under -
insured. It has come up in a number of Senators’
speeches, that approximate number, 6,000. And,
again, this Bill does nothing to address that. We have
heard solutions of the private sector insurers sharing
that load. Quite frankly, I think it should be shared by
all of the plans, including the government ones. But
there are solutions, and again, we all seem to want
this affordable, basic, universal health care. But the
question is: How?
How is going to be delivered? How is it going
to be executed? What system, what model do we trust
to deliver better outcomes? And I am not wed to one
or the other, but from an economic standpoint I would
like to see some cogent arguments put forward so that we can engage wholesomely on this.
I have already spoken about the control of
costs, of overuse, of unnecessary services, of self -
referral. In certain instances, it feels like we have the
fox guarding the henhouse, when y ou have GPs
[general practitioner s] setting the oversight for the
Health Council which oversees the GPs and the specialists, that kind of thing. It feels like it is not an ind ependent system that is going to drive for some of
these radical cost -containment changes that this
health system needs.
Again, we have talked about the transparency, the BHB accounts that are woefully delayed on their website, the need for anonymised usage data on
a national level (call it a registry or just a purge data
dump) so that people can engage and see where the
trending goes, see what areas are being used on a
per capita basis, on a per service basis, and compare that to other baskets of health goods in other jurisdi ctions. I mean, there are plenty of people who run big
numbers here in Bermuda. We probably have the
most actuaries per capita in the world. And the public
needs to be made a part of this challenge and the s olution. But this fashion that we are seeing, this neither -
here- nor-there- solution railroaded through just does
not sit well with me, Madam President.
We need more people to pay for our ageing
demographic, and I would like to know, what is the PLP’s plan to grow our residential population or to
actually curb the cost?
We have heard in the presentation from the
Government Senator that we are moving the hospital
from a fee- for-service to a block grant model. And I
hear his argument that fee- for-service could lead to
administrators driving unnecessary costs to get in more revenue. I cannot understand, but I could see
where the temptation comes from certain bad actors
in the private sector who run for -profit businesses
where they would want to do that. But, I am struggling
to see that we would have administrators of a public
institution doing that kind of excess fee generation for something that they are not profiting from. But if this is
what the Government believes the hospital was doing,
then so be it.
Let’s talk about the effects of a block grant. If
the services needed at the hospital exceed the block
grant, they are either going to have to receive supplementals from somewhere or, to fit within their block
grant, they are going to have to start offering less
hours, lower quality product, et cetera, et cetera;
which is the standard thing with this kind of funding
shift. You also lose the incentive for people to manage
their own usage. If I am in a relatively small insured
pool at my job and we all meaningfully take steps in
our lives to use the hospital less, we see that reflected
back in lower premiums from our insurer due to our
claims history. Because that is being taken away,
there is no incentive now to curb usage at the hospi-tal.
The other question I have when we talk about
the efficiencies of the model is, Why not collect the whole standard premium? This silly little 10 per cent of
the SHB, the $23 out of $355, is being left with the private insurers to manage claims from all the non-hospital community health benefits that are included in
the SHB. And if the hospital starts to curb its usage or
increase wait tim es because of its block grant, we can
see the potential for those services in the non- hospital
portion to skew upwards from the historical trends.
We also saw, I believe it was Senator Jardine,
who highlighted in the actuary report what the claims
history for some of these non- hospital things were,
488 22 May 2019 Official Hansard Report

Bermuda Senate like diagnostic imaging. And I believe that the rate
quoted was from 2017 (and I welcome to be corrected
here) was when there were some cost -containment
measures put in place by the OBA administration to curb those costs. So, if we are basing our forward premium based on a year when there was historically
low usage due to the curbing, we can also see the
potential for claims on that non- hospital portion to
skew wildly upwards. And that risk . . . for those people who have comprehensive plans, you can understand how insurers would easily pass that on into the
rest of the pool with the comprehensive stuff. So, why
doesn’t Government just collect this whole Standard
Premium Rate entirely, and manage that 10 per cent?
If they are confident that this $25 is going to cover the
non-hospital portion, why don’t they just take the
whole Standard Premium Rate? We are talking about finding efficiencies in the system and we are vilifying
the private insurance companies, but Gov ernment still
wants them to collect all this money, pay it promptly
on time. It is very convenient to receive three cheques a month as opposed to 3,000 from all the employers
out there.
And it is easy to make it look like it is the i nsurance companies that are expensive, when they are just collecting a tax now on government’s behalf, b ecause this premium has been converted into a tax.
Obviously, Government does not want people to see
on their pay cheque that we are getting a Standard
Hospital Tax or Standard Health Tax. It is more convenient to say it is a health insurance deduction from
the insurance companies.
This same sleight of hand gamesmanship was
used with the financial services tax, where it was set
out, We are putting the tax up, but insurers mus t bear
this burden. It just becomes a cost of business. It will
get passed on with an increased premium. What Government did not want to see on your invoice from the
insurance company was your premium on a separate
line showing how much you are paying in t ax. All this
stuff is just high- level balance sheet sleight of hand.
There is no savings actually going into the system, Madam President.
We look at government management versus
government regulation. Quite frankly, I would be much more comfortable, and many people I have spoken to have, with seeing some level of regulation. The hospital is what? Some 46 per cent of the total spend in the
country. The other 60 per cent (so more than half) is
outside of the hospital. Where are we going to start
seeing some r egulation on fees, on self -referrals, on
this kind of stuff?
The actual management of it does not fill me
with a whole lot of joy. And the Premier’s recent com-ments at the House of Assembly that they are coming
after pensions next scares the bejesus out of me. I have seen how much of a meal was made of the sugar tax. We hear about the lofty intentions about what it
is meant to achieve, but when you look at the way it was crafted, it does not do anything to provide these
behavioural economic goals that are stated in the pr eamble. So, all these things concern me.
I mentioned before about one of the reasons
why the private and public pools have different claims
rates, and it is demographics. But I would contend that
it is also [because] there is far better sc rutiny on the
claims in the private sector pools.
And again, we look at this kind of pattern
emerging with some of these health care reforms. We
hear a lot of talk about “transformational” and “trans-parency” and all these lovely buzz words. But when
you l ook at the actual actions and the way the things
are being implemented, it makes you ask the question, What is being hidden? This Bill is being super
rushed; the actuarial report was not released publicly until after the House debate. We have seen what wen t
down with the former head of the Bermuda Health
Council. We have seen the pay outs to the politically
connected private sector providers after the regul ations to contain costs were done under the previous
administration. We see even here today that we ar e
being forced to pass these things in illogically rushed
timelines. There seems to be no appetite for scrutiny.
We have now had five speakers today, Madam President, besides the opening statement, and despite the usual norms of, certainly, high school le vel
debate and debate in another place, where you see
an alternation between the various representative
groups in the House, so that you can have some
wholesome presentation and rebuttal, the Gover nment seems to have passed on their opportunities to
engage in this alternating fashion. I am assuming they
are all going to have something to say, but they want to hear one in a row as a bit of a self -supporting echo
chamber.
We all understand that we need change here
in health insurance. Change, yes. But in what dire ction, in what way, and do we want it to be piecemeal without a clear understanding of the path forward? I
think that about gets . . . I am not sure where my time
is, Madam President. I should have been watching the
clock a little bit better.

The P resident: No, you are fine with time.

Sen. Nicholas Kempe: But that was the crux of my
concerns here. I believe this is a rushed, half -
developed measure that does not actually deal with
any of the fundamental drivers of health costs in this
country, and I do not support this Bill, Madam Pres ident.
Thank you.

ANNOUNCEMENT BY THE PRESIDENT

SENATE VISITOR

The President: Thank you, Senator Kempe.


Bermuda Senate And before I go onto another Senator, I would
just like to acknowledge the presence of the Honour able Walter Roban, Deputy Premier.

[Health Insurance Amendment Act 2019, s econd
reading debate, continuing]

The President: Would any other Senator care to
speak? Minister, sorry.

Sen. Vance Campbell: Thank you, Madam President.
I won’t speak long.
We have heard fr om many Senators and se veral of them have indicated that this Bill does not deal
with the creation of a universal health care system, it does not address certain costs. But if I could go and
read from the Bill itself, Madam President, as to what
the purpos e is?

The President: You certainly may.

Sen. Vance Campbell: It says: “to provide for a new
method of funding hospital treatment provided by the
Bermuda Hospitals Board in respect of standard
health benefit.”
That is the purpose of this Bill, Madam Pres ident. And anyone listening in today, or sitting around
this table should know that this is what is being pr oposed— a new method of funding hospital treatment
provided by the Bermuda Hospitals Board. It does not
claim . . . that is it; it stops there. It do es not claim to
address certain costs. It does not claim to create a
universal health care system. [It is] simply to change the method of funding hospital treatment provided by
the Bermuda Hospitals Board in respect of standard
health benefit.
Madam President, can I read from the stat ement made by a Senator Richardson earlier?

The President: Yes, you may, Senator Campbell.

Sen. Vance Campbell: He said, “Madam President,
the purpose of this Bill is to streamline the way Bermuda funds its only hospital in order to control health
costs, and make the necessary amendments to effect
this through updates to the Standard Premium Rate and the Mutual Re- insurance Fund.”
However, he did say this was a first step. A
first step. He did not say it was the complete thing; he said it was a first step.
Let’s look at the status quo, because we might
have some upset people, because the status quo is
being changed by this Bill, well, one part of the status
quo. We heard earlier, Madam President, that our current spend on heal th care is over $720 million. But we
are not living as long as we should with that amount of
money being spent on health care. We are knee- deep
in chronic illness and waist -high in health risks. That
was how it was put by Senator Richardson. We are eating more [and] exercising less. We are treating
more and not preventing enough. And we are spen ding $2 million per day on health care. That is the status quo.
No one has argued with that. That is the status quo. They have argued, in my opinion, Madam
President, to preserve that status quo.
We have heard “tinkering” [and] “reckless
abandon to which this Bill was approached.” We have heard “rushed.” This Bill with its purpose, as stated
earlier, is the result of the input of highly qualified indi-viduals. It is not a result of “tinkering” or “reckless
abandon.” We have three of those individuals, highly
qualified individuals, in this room right now, Madam
President. And we are reducing their work to “reckless
abandon” and “tinkering” and “a rushed job”? They
have professional standards that they have to meet in
the conduct of their day -to-day duties.
We heard from another Senator that, You do
not build a foundation and then decide on what the rest of the house is going to be. That is fine and dandy
when you are b uilding a house from scratch. We have
a house that is built, and it is on fire, Madam Pres ident. And should we then wait until we know what we
are going to do after we put out the fire before we actually put out the fire? That is what I get from that
analogy. It is better to wait until we know what we are going to do after the fire before we start to put out the fire.
This is a first step. This is putting out part of
the fire. We can work on the other phases that we know need work, but you have to make a f irst step.
When I came here today, Madam President, I took a
first step followed by a second step, that is how I am
here. I did not take one step and [then I was] here.
This is a first step.
We have heard comparisons between the experience in the private sector versus the BHB. You
cannot compare the experience. Those who may ref-erence it know that you cannot make that comparison,
because the Government is obligated to subsidise,
whereas the private sector is not. The Government
has an obligation to its cit izens to look after them; the
private sector does not.
We have heard, Madam President, about the
6,000 or so uninsured or underinsured and how the
existing or private sector insurance companies would
have liked the opportunity to put a proposal together
to collaborate on the underwriting of the cost of
provi ding these 6,000 or so individuals with some form
of health care. Rest assured, Madam President, that it is only as a result of the changes that this Gover nment has proposed. These insurance companies have
been in existence for 40, 50- plus years. Nothing was
stopping them from collaborating amongst each other
and putting a proposal together for the Government to
take care of the vulnerable people of this country. They did not, because the sole purpose was profit.
490 22 May 2019 Official Hansard Report

Bermuda Senate They want to reduce their costs. They never reduced
their premiums.
We heard how some of these insurance companies put together these wellness programmes. I
think that is great. I think it is. We all need to be healthy. This country needs to be healthy, but let’s not
be fooled. The purpose was to reduce their individual
costs. Healthier people who are paying premiums to
them are not going to claim on those premiums as
much.
So they increase and improve their bottom
line. It was never linked with if you do this, then we will
reduce the insurance premium. So you win on both
occasions —you are healthier and your insurance
premiums go down. No. It was designed to reduce
their loss experience.
We have heard how Government . . . this Bill
is just changi ng the method of funding hospital treatment provided by the Bermuda Hospitals Board. It has not changed the Standard Premium Rate, that has not
gone up. But somehow . . . we heard today that Government is increasing the burden on the average
Bermudian.
The rate has not changed, Madam President ,
but when we dig deeper, if the rate goes up we find out why, do we not? The insurance companies —

POINT OF ORDER

Sen. Nicholas Kempe: Point of order, Madam Pres ident. The Member may be inadvertently quoting, I
certainly never said the “average” Bermudian, but the
“working class” Bermudian. There is a big demographic difference, Madam President .

The President: Senator Campbell, continue.

Sen. Vance Campbell: Madam President , I was not
directly quoting anyone, but w e have heard terms
used— "Bermudians,” “average Bermudians,” “Mr. and
Mrs. Bermudian,” Mister . . . you know, the “John Q.
Public” —whatever you want to call it. We have heard
today where the statement was made that the Government is increasing the burden on them as a result
of this Bill, a Bill designed to provide for a new method of funding hospital treatment provided by the Bermuda Hospitals Board in respect of the Standard Health
Benefit. I cannot say that enough because a whole lot
has been attributed to this Bill, but that is the only purpose.
So, the Standard Premium Rate has not i ncreased as a result of this, but yet, Government is accused of increasing the burden on Bermudians. How
is that? Is that acceptable?
It is the insurance company . . . if you have an
increase in the insurance rate after this Bill it is b ecause the insurance companies, looking to their bottom line, have raised their portion—the portion that
they control —of the overall premium that individuals pay, Madam President , not what this Bill is doing here
today.
With that, Madam President , I will finish by
just advising Senator Simmons that P&C stands for “property and casualty.”

Sen. Michelle Simmons: Thank you.

Sen. Vance Campbell: Thank you, Madam President .
The President: Thank you, Senator Campbell.
Would any other Senator care to speak?
Senator Hayward, you have the floor.

Sen. Jason Hayward: Good afternoon, Madam President .
The President: Good afternoon to you.

Sen. Jason Hayward: The Government’s ultimate
aim is to improve ac cess to outcomes and control
costs.

The President: Mm-hmm.
Sen. Jason Hayward: That is what the Government’s
aim is.
We do have a number of steps that we will
embark on, measured steps, to get us to a place
where we have improved access, outcomes and controlled costs.
Step 1 —Reform the health financing system.
And we have options, whether we are going to move
forward with a unified system or dual system. In addition to Step 1, there is another component, and that is
reform the Standard Health Benefit or minimum pac kage to cover prevention and primary care. That is the portion that we are actually discussing today. That is a
part of Step 1.
And so we will have further decisions we will
have to make. We will have to determine if we are
going to move down the road of a dual or unified sy stem. Much consultation has already been had with
insurers, with health care providers. I was part of
those consultation meetings. Individuals had an op-portunity, even after the consultation meetings, to
submit their feedback. Those meetings were facilitated by the Bermuda Health Council.
What we will do then is share with the public
the proposed new basic plan or new Standard Health
Benefit and consult widely on what it should include and what is affordable.
We consult when and where necessary. We
do not do things absent of consultation. We, as elec ted officials and appointed officials, are not the experts
in the health care industry. We do not sit in a caucus
room and determine what the Standard Health Benefit will be, because we are not the experts. We have to


Bermuda Senate consult the experts in order to have informed dialogue
to inform our decisions moving forward.
But we will also build the infrastructure to i mplement the unified or dual system with the new basic
package. After that we w ill roll out implementation to
ensure universal coverage for a three- year period,
and we will continuously add benefits to the plan that
we roll out. That is all part of Step 1. That is the pr ocess we are currently engaged in now.
Step 1A and Step 1B are happening simult aneously.
Step 2—Update the Bermuda Health Strategy
2014 to 2019 to renew and refresh a unified vision of health to improve health outcomes and health costs.
Step 3—Improve controls to help fees and
health care provisions.
That is the proces s that we will follow to e nsure that we improve access, outcomes and control
costs moving forward. We need that process in place
because we recognise our current system is not desirable.
Madam President , at the end of January of
this year the Bermuda Healt h Council published data
on the Island’s health system costs for the fiscal year
ending 31 March 2017. Bermuda National Health A ccounts report, this is what the report is actually
[called].
It speaks to health funding and health care
expenditure. In 2017 ( the year in which the latest data
has been reported) health care costs went up by $20
million to $723 million. That put us third in the world
regarding health care spending per person.
I know there is talk to say if we moved to universal health coverage w here we will ensure that ev erybody has access to quality and affordable health
care, how will we pay for it? Will we need to raise taxes?
I believe and we believe that there is enough
money in our current system to ensure that everybody
has access to affordable and quality health care. But
the way in which the funding is allocated, and also the
way expenditures are allocated creates difficulties.
And people are getting left behind. People who do not have access to quality and affordable health care as it
currently stands. But we believe there is enough money in the system so that everybody can have access.
Those reports also showed us, Madam Pres ident, that while financing from private insurance d eclined, their revenues increased during the same per iod. So fewer individuals were reliant on private insurance to fund their health care, but the insurance companies’ profits —or revenues, I should say, in this
case —increased during that same period.
Madam President , the report revealed that
more people are now pay ing for health care out of
pocket. That number was up 23.3 per cent. And more
people are paying for health care from donations. That
number was up 47.5 per cent. These figures should
cause alarm to us all, Madam President . Madam President , all residents should have
access to basic health insurance coverage. Health
care coverage contributions should be affordable, and
all residents should have access to quality health care
services. That is the end game. We are on the jour-ney.
I appreciate that up until this point, to some it
has not been clear, the steps we were following, what the overall reform looks like, how this piece that we
are doing today ties into the larger puzzle. But it does
tie into a larger puzzle. We are not making this step in isolation, because if we make this step and nothing
improves, what are we spending time debating here
for?
But we know that this is a critical step in getting us to our end game. As a result, we will ensure
that we provide the public with the knowledge that is necessary so that they are not left behind on the journey that we are embarking on.
And Madam President , the train has left the
station, because the need currently exists within our community to change our broken system.
Madam President , we need to find ways to
address chronic disease, ageing, and high health care
costs. And the reform steps I outlined seek to tackle that. We need to change the way we pay for health
care through health care financing reform. This is part of changing the way we pay for health care. This Bill represents part of our health care financing reform
journey.
Madam President , to be clear, what this Bill
does is: (1) reduce the cost to the public of hospital
services; (2) it reduces dialysis fees; (3) it reduces
costs needed to transfer to HID; (4) it reduces costs of
multi- business claims adjudication; and (5) it adds
investment for long- term savings for chronic disease
care. That is what this Bill seeks to do. It is not taking money from one pool and just putting it in another
pool. It has out comes and aims that will improve the
lives of individuals.
Health care cannot be viewed just from the
lens of whether my health insurance premium goes up or down. It cannot be viewed from that isolated lens.
We have seen cases where the Government has r educed health costs and premiums still went up. The
previous administration reduced the rate by roughly
around $4.00. Health care costs did not go down si multaneously. Health care costs continuously went up.
We are keeping the rate the same. Health care costs
are still going up.
See, it is this narrative that is being formed
that somehow the Government is driving up health
care costs. But what is really driving up health care
costs are chronic disease and our ageing population.
Had the Government not done what it is doing now,
we would have seen the rate that was recommended by the actuaries go up some $80. What would have been the outcry from the community then? If we do
nothing, the rate goes up and health insurance costs
492 22 May 2019 Official Hansard Report

Bermuda Senate go up. We contain the cost, we put measures in place
so it does not rise and health care costs still go up.
And so this is why the whole journey we are
on is important, understanding that we recognise that
this is one piece of the puzzle. To persons that do not understand the complete vision , it may seem like an
irrelevant, seamless, un-sensible piece of the puzzle,
they are not sure where this piece actually fits. But we are clear, as I said a minute ago, about what the Bill
actually does.
Madam President , we rely on the advice of
actuaries. To say that there is no consultation, as if
the Government caucus sat in a room and conjured
up this great idea on our own to discuss alternative
financing for the hospital is pie- in-the-sky type of
thinking. Why do we have a Health Council? Why do
we hav e technical officers in the Ministry of Health?
They study health care systems, they study health
care policy, they study health care strategy, and they
provide us with the technical advice. We then determine what we believe is in the best interests of the
people that entrusted us to lead.
How did we get to a number of $330 [million]
that will go to the hospital? Madam President , it was
not a number that we just plucked out of the sky —
$330 million. It was not a number that we plucked out of the sky. In order to determine if the number was reasonable or not we would have had to have had
adequate consultation with BHB. We would have to
have seen what they had spent in previous years. I
appreciate that the audited reports are not completed,
but that does not mean that they do not have income
and expenditure records. We all go through a process . . . or an audit is a greater process than [just] you
knowing what your financial data is.
And so we have had that adequate consult ation, Madam President . There has been ongoing consultation with insurance companies. Health care f inancing reform . . . those consultation meetings took
place. The insurers were in the room. The insurers are
well aware of the path that we are heading down. But
you have to appreciate that they operate with a different mandate than the Government and so, naturally,
there is going to be pushback.
First and foremost, change is not always readily accepted in this country —that is number one. But
change that disrupts a system that [has been] in place
uninterrupted for decades is not going to be palatable
to some. Like Senator Campbell spoke about, now we
hear proposals in terms of how insurers can work collectively together to provide insurance for all those
who are unemployed . . . or uninsured. It sounds noble, but nothing prevents those insurers from putting a
proposal to this Government.
I was a little taken aback that Senator Jardine
could read a letter that was presented to him by our
business community. The same business community
could have wri tten directly to the Government. And
then read a redacted letter? It does not speak to the form full scope and nature of what their concerns actually are, because I wonder if the business community had been writing letters to the insurance companies
all th is time, because this particular Bill does not
swing Bermuda rates out of whack. Bermuda’s health
insurance costs have been —

Sen. Nicholas Kempe: Point of order, Madam Pres ident.

The President: Senator Kempe, what is your point of
order?

Sen. Nicholas K empe: The Member may be inadvertently misleading the House. Can he categorically
say that these groups have not written the Gover nment?

The President: That is not a point of order.
Senator Hayward, continue.

Sen. Jason Hayward: Because health insurance
costs in Bermuda, Madam President , have been sky
. . . unaffordable for years. They have not just been
unaffordable for years; they have been a bit discrim inatory —health insurers —whether you have a precondition, whether you are a senior. You would be
shock ed to know that some seniors receive letters
regarding their insurance package to say that insurers
will no longer cover eye care and dental. And if they
want that coverage, all of a sudden they have to pay a
greater rate now. When those individuals need t hat
coverage most, they are being provided with these
letters.
Our current system is broken. Health care has
been one of the top three concerns and health care
costs has been one of the top three concerns in this country for over a decade now. We are attem pting to
do something about it. We cannot sit back and conti nue to operate as “business as usual.”
Madam President , Senator Jardine asked the
question: Does this change mean that the uninsured
can now just go to the hospital and receive services? I
ask the question now, Madam President : Should the
uninsured be excluded from receiving health care services? And if they should not be excluded, then yes,
they should be able to walk into the hospital and r eceive service, because that means they will not be
able to receive service from anywhere else.
And so when we look at the big picture, at the
end of the day, we want to improve health outcomes, access, we want to ensure that we control costs, we
want to ensure that our people have access to affor dable and qual ity health care, Madam President .
Thank you.

The President: Thank you, Senator Hayward.
Does any other person . . . I think everyone
has spoken.


Bermuda Senate I just would like to say, Senators, that you
have given a robust debate today on this Health Bill.
And I would just like to say that we do have expertise
in the room in the persons of the Permanent Secretary Dr. Attride -Stirling. We also have it, of course, in Dr.
Ricky Brathwaite. And we also have the Parliamentary
Counsel. And I am sure the concerns and question s
that have been raised can be answered by them
through Senator Richardson.
So I would just like to hand over now to Senator Richardson so he can address some of the con-cerns. And I am not denying the fact that I, as a health
care person, have been really stirred by this robust
debate today because the concerns which were
raised around this table have been a concern of mine over many years of working in the field.
So, Senator Richardson, I hand over to you.

Sen. Anthony Richardson: Good afternoon, Madam
President .
The President: Good afternoon to you.
Sen. Anthony Richardson: And, again, fellow Senators and the listening audience.
What has been interesting, to be honest,
Madam President , is that we have been at this for
several hours —
The President: Mm-hmm.
Sen. Anthony Richardson: —and many persons
from my summary here have made statements and
given opinion, but there have not been that many
questions asked, to be honest.
But what I will try to do is I will go through
those [questions] that we believe were asked and pr ovide commentary and then give a wrap- up for my
comments and then we can hopefully proceed.
And so what I will do is . . . in no particular order, but I believe Senator Jones did speak first and
one of his comments was in terms of affordability in
the whole health system. And I just wanted to let you know that the health system required $209 million last
year to pay for the Standard Health Benefit and the
Mutual Re- insurance Fund services, and the actuary
noted that it would cost an additi onal $49 million to
fund the same benefits this year. And that speaks to
many comments today in terms of why now?
There is an urgency of “now” in terms of . . .
there had to be some adjustment to the funding within
the system in order for it to move forwar d. And so the
Government had to either accept what the actuary
recommended and, therefore, increase payments
(which would have been significantly higher than we
all had anticipated), or do nothing, which would have meant that if the hospital was still fund ed on the same
basis, there would have been a substantial shortfall. So we could not sit still and tread water. You made a comment in terms of shifting . . .
and the Government actually putting the same amount into the system remembering that those that ar e in the
Health Insurance Department are putting in what they can afford, which has always been the case. There is no real change from that perspective.
You made the comment in terms of service
providers . . . I guess I want to be polite, but . . . I will
separate this comment just as a general comment. I
think that some of the comments that have been
made today also demonstrate for us, collectively, that there is some misunderstanding as to the whole pr ocess.
I just want to clarify that when it comes to the
Standard Health Benefit programme, it primarily refers
to services that are provided at the hospital or outside
the hospital with approved providers. So, therefore, it is not this free- for-all whereby I go anywhere and get
a service that is covered under this whole thing that
we are talking about because, again, primarily, if, for
example, the hospital offers all their services, but if I
want to offer them in the community, I have to actually apply to the Health Council to be an approved provi der of that service. And then, once that is done, I can
then provide the service. But remember the cost for
those services are still regulated by the Health Council, so there is some containment in terms of the costs of the services which are provided.
And so you gave an example before in terms
of you going to your GP [general practitioner] and
there being the tremendous variance in terms of costs
and that is because . . . I am making an assumption
now that the services that you were engaged in were
not Standard Health Benefits.
So, therefore, the general practitioner, or
whoever you went to, can charge whatever they
choose, which is entirely a private contract between
the health care provider and you as the health care
consumer . . . manage those through the insurance
programme.

Sen. Marcus Jones: Sorry, Madam President .

POINT OF CLARIFICATION

Sen. Marcus Jones: Sorry, point of clarification. In
relation to the comments that I made in regard to like services between two different systems, the example I
used was goi ng to a physician.

Sen. Anthony Richardson: So, Madam President , I
think the same thing applies then in terms of if Sena-tor Jones goes to a health provider and says, I want to
get a physical, and I do the same thing to a different
provider, what they determine as necessary for me
versus him is different and, therefore, you will get di fferent services, again, depending on the provider. And
if you think about it, you would know, Madam Pres ident, it would be things such as, What do I present as
494 22 May 2019 Official Hansard Report

Bermuda Senate my health prof ile effectively? And then they will do
services based upon that.
Madam President , Senator Jones also spoke
about the loss ratios. And what is interesting in this
overall process is that in going through the brief, the civil service professionals (I want to call them) do pr ovide information. And what is interesting, which I think
is for everybody’s benefit, because I do not think we
fully understood this (myself included), is that the i nformation that I have before me speaks to the overall pool of money that is comprised in the Standard
Health Benefit system, if you want, and then it breaks
down the loss ratios between the private sector and
the public sector.
And so, roughly speaking, in the private sector
the loss ratio has been about 80 per cent, sometimes
it is as high as 93 [per cent], but 80 per cent all the
way through. Whereas, in the public [sector], it has
been about 130 per cent, give or take. But overall, the
loss ratios have been between 96 per cent . . . say 96,
98, 90, 94 and 106, which really m eans that in its t otality, there is enough money raised as Standard
Health Premiums to pay almost all of the Standard
Health Benefits.
And so, in large measure, if the system works
correctly, all the funds raised for this purpose will be paid for the appropriate purpose and, therefore, the system will actually end up at a net zero, which is a
proper balance, which is what you would expect. I
mean you may want the loss ratio to be a little bit less
than 100 per cent, however, in this context the system
is providing enough money to cover all of the benefits.
Madam President , again, we were given a
reference to Google when it comes to the health context. And, clearly, you know, Google is not an appr opriate source for these things. I think we all understand that Google is based upon algorithms and you
would be surprised in terms of how, as a system, you
can actually manipulate what Google will spit out. I will
not give an example. Sometimes there are things you
could imagine you put something in and the result is
altogether different.
So, when it comes to the professional admi nistration research and management of the health sy stem, of course, the appropriate references would be
. . . as a set, I suppose, the Royal Health Organis ation, the OECD, the Royal Bank, and international . . .
other standards. And so, certainly, Google is not the
appropriate reference point for any comments in this
context.
There was also a comment in terms of the
relative efficiency of the insurance companies versus some of the public plans. And to clarify, the [GEHI] -
[Government Employee Health Insurance] is actually
operated separately from the Health Insurance D epartment. And so, yes, we do know (I know, we all
know, I believe) that when it comes to [GEHI] there
are some delays in terms of payments. But that does
not cover the entirety of the public plans which are run by the Health Insurance Department. So we need to
be mindful of that.
Senator Jardine, you referenced the idea, if
my memory serves correctly, that the amount that is
left in the insurers’ hands of the Standard Health Pr emium will be to cover all of the Standard Health Benefits that are performed outside of the hospital. And I
have been advised that if you look at page 25 of the
actuarial report, Appendix 3, it does, in fact , have the
breakdown for our general information.

Sen. James S. Jardine: Point of clarification.

POINT OF CLARIFICATION

Sen. James S. Jardine: Point of clarification, if I may,
Madam President .
I think what I was saying specifically is that
under the ne w scheme, the new rating, there is
$17.78 left for the insurers to deal with diagnostic i maging, and I referred to a page in the 2017 Actuarial
Report which said the total for diagnostic imaging was something like $37 million.

Sen. Anthony Richardson: Mm-hmm.

Sen. James S. Jardine: And then I think in 2018 it fell
to $24 million. That really was the reference.
Sen. Anthony Richardson: Right.
Sen. James S. Jardine: But I clarified it also by sa ying that I do not know what portion of that $37 million
or that $24 million would actually fall to the account of
the insurers because I did not have that information.

Sen. Anthony Richardson: Thank you, Madam President .

The President: Mm-hmm.

Sen. Anthony Richardson: And clearly, it is i mportant to have good information when we are having
these sorts of conversations.
There was a comment from Senator Jardine
in terms of, How did we get to the $50 allocation? And
I think it was a general mathematical calculation in
terms of if the loss ratio is 80 per cent, then the 20 per
cent, what is that based upon the premiums? That is
where that came from.

Sen. James S. Jardine: Point of clarification, again.

Sen. Anthony Richardson: Sure.

POINT OF CLARIFICATION

Sen. James S. Jardine: I think, Madam President ,
what I was getting at is that the pie chart we got at the


Bermuda Senate town hall meeting on Thursday showed it as a component of the Standard Health Premium, and it not
really a component of the Standard Health Premium
because two of the numbers that were quoted there, I
believe, was about $101 in each of two cases and then it just had this amount of $50 for administration
and profit. The only other charge in there is something
for emergency services, which was $52, and that
makes up the $355.
So, I mean, I understand what I think was tr ying to be achieved by presenting that pie chart. But it was somewhat misleading in that it did not show the
correct composition, at this point in time, under the
current scheme, for the Standard Health Premium rate
detail.
I mean, I understand, at the end of the day, as
I explained in my comments, that there is about a 20 per cent contribution after claims for the private
plans, which will now go to the hospital.
Thank you, Madam President .

The President: Thank you.
Sen. Anthony Richardson: Sure, and without going
back and forth, just to clarify, it is that the . . . we a ccept . . . well, the general information is that there is
an 80 per cent loss ratio for the private insurance,
which means there is 20 per cent left over, and then
that 20 per cent, multiplied by the Standard Health
Benefit Premium, less the portion that goes to the M utual Re- insurance Fund, that is where the $50 reference came from.
But, again, thank you. We certainly want to
make sure that we are as clear as possible.
There was commentary in terms of the lack of
currency with respect to the Bermuda Hospitals
Board’s finances. I believe they were presented as
2014, and Minister Wilson did talk about what steps
are going to be taken to ensure that they become
more current because, of course, it is important for us
to have current information.
Madam President , as a general commentary
to wrap up the discussion, I want to say, again, that I find this process to be quite interesting. Clearly, we
have the Government Senators, the Opposit ion Sen ators and the Independent Senators, and we are
charged with understanding what is being proposed,
sometimes doing collective, otherwise independent,
research. And for me it has been very interesting to go
through this process —

Sen. Marcus Jones: Point of clarification, Madam
President , or information.

The President: Do you accept the—

Sen. Anthony Richardson: Not now, I am o n a roll—
The President: He is wrapping up. Sen. Marcus Jones: The only reason why I am interjecting—

The President: He sai d no.

Sen. Marcus Jones: Oh, he said no?

The President: Yes.

Sen. Marcus Jones: Sorry.

The President: It is up to the person that you are
speaking to say whether or not they accept the point of clarification. He does not.

Sen. Marcus Jones: He does not.

The President: He does not.

Sen. Marcus Jones: Thank you, Senator.

The President: Carry on, Senator Richardson.
Sen. Anthony Richardson: I was on a roll.
What I was saying was that as part of the pr ocess, you know, we come here I would say as teams,
and we are responsible for doing our . . . sometimes
collective research and sometimes independent. And
in this process it was enlightening for me in my own
perspective, I suppose, in terms of going back to my
earlier history in terms of I previously work ed in the
Accountant General’s Department and understood
how GEHI worked, and I worked on the Hospitals
Board, at the Health Council and otherwise. And some
of this was —Okay, Anthony, cast back in your mind
how these things work, so that I could, at least, have
an appropriate appreciation myself for today’s discussion.
And that is what I am trying to get at, that for
me this was very interesting. And then, hearing the various comments today, it also, I think, does advance
the discussion to, as best we can, make the information as clear as possible for the general public. B ecause in this context, even though I do not like the
description, this is sometimes very technical infor-mation and I believe we have a responsibility to e nsure that the average person can understand it. So I
thank everybody for that process.
I want to emphasise again that a lot of the
commentary has not been directly related to what we
are doing today. What we are doing today is debating, discussing, and ultimately approving the Bill which
talks about a change in funding for the Hospitals
Board. That is what we are talking about. And there
are many other comments being made which I would
politely say, I guess, are extraneous, but that is the
core of what we are doing today.
The Government has said that, based upon
actuarial advice, in the absence of doing something
496 22 May 2019 Official Hansard Report

Bermuda Senate the rates would have increased quite significantly for
everybody , and this is the step that Government is
taking. There are other steps that are going to be taken in conjunction to reduce the overall health care
costs.
Very succinctly, I suppose within any health
care system you have people who are either sick,
well, or somewhere in between There is a process by
which there is a policy put together, a policy of insurance, which is then rated. And then you get your services and those are being paid for. And what the Go vernment is saying now, clearly, in the Bermudian con-text, one of the major participants in the health system
is the Hospitals Board. And this is a way by which we
will avoid an increase by taking this step. And that is
what we are going to be doing here today.
Senator Hayward gave a good summary, I believe, of the various steps and clarified that there has
been ongoing consultation in terms of what the Go vernment’s intent is and that, yes, there are several
steps to be taken. And I think it is unfortunate if per-sons conclude that if there are five steps to be taken,
you cannot take the first step. We have to understand
that this is one step in a progression . . . for the general public’s understanding.
There was a comment earlier, a general
comment, in terms of, What is happening in the sy stem to address utilisation? And, again, from exper ience the question around utilisation, in various as-pects, has been addressed by var ious administr ations, probably going back at least 30 years in terms
of the original Health Insurance Council and many
persons all the way through. There has always been discussion in terms of the primacy of the Hospitals
Board, how services can be provide d in the community, and the goal has always been to ensure that whatever transpires is reasonable.
There have been many discussions and stu dies to review the rates that are actually being used,
what jurisdiction Bermuda uses as a reference point to
inform us as to what the reimbursement rate should
be, and so clearly there has always been a significant
emphasis on monitoring and managing the utilisation within the health care system.
There were comments, both today and also
during the debate on Friday, in terms of the ability for
the insurers to receive the claims data from the hosp ital. And it was clarified that, yes, they will still get the
claims data to allow them to continue to manage
themselves internally. And so I think that is a very i mportant point for health care providers and the general
public that the detail that you require will still be given to your insurer.
And Senator Simmons, you mentioned that
there was a previous policy whereby the Hospitals Board itself would track each person’s utilisation of hospital -based services and then give them a stat ement. And you are right, because, once you receive it,
you do have a reality check that says, Oh, wow. For example, I went to the hospital 10 times this year for “X” reasons. And then it makes you, at that time in a
summary document, think about how you can better
manage your own circumstance, if that is the case.
Senator Jardine and others have mentioned
that they were able to obtain certain information. And I want to commend Dr. Brathwaite and his team at the
Health Council, and certainly the PS also, because
they do put out quite a bit of information. To be trut hful, sometimes it is almost overwhelming. And it is up to us individually to go and find the information and then take the time to underst and it, because it does
impact us. And, again, I do commend the BHeC for
that. They give quite a bit of information.
On a somewhat refreshing note, we all claim
to want to have unbiased information. And that is only
going to come if all information is made available in
whatever fashion. And so I almost want to say I take
exception to the idea that there would be correspondence given to, in this case, “a” Senator without it being
to “all” Senators, because there is a presumption that,
I guess, the presumption would be then that there is a reason why, in this case, Senator Jardine, would r eceive it in the absence of others, assuming that others
did not . . . I know I did not receive it, so let me put it
that way, being more personal. I did not receive it.
And so I am very surprised that if there is the
concern and it is a genuine concern, then that should
be shared amongst all because no one knows what
our individual and collective response will be to that.
And so even to the public now I will say the same
thing, to the extent that there is concern, write to ev eryone to ensure that there is full input.
With respect to the individual insurance companies, in my summary what they are appearing to
say is that their premiums that relate to the Standard
Health Benefi t have, effectively, been subsidising their
premiums for supplementary benefits. Because if you
separate the three programmes —which would be the
Standard Health Benefit programme, the MRF pr ogramme, and supplementary programme—and what
the Government is doing, effectively, is saying, Okay,
fine, we are now going to require a larger portion of
your Standard Health Benefit (or Standard Health
Premiums) to be removed from your individual control.
It then means that what the insurers are left with is
going to b e their premiums that are tied to their supplementary benefits.
And based upon what has been in the public
arena so far, it appears as if they are saying, Well, our existing supplementary premiums are insufficient to
fund our supplementary benefits and so , therefore, we
need to substantially increase our supplementary
benefit premiums to cover whatever.
And many of us, I guess many of you, will accept this in terms of if you are going to say that your
Standard Health Benefit pool —just for argument’s
sake—is $20 million, and you need to now increase
that by 25 per cent and you no longer have to take


Bermuda Senate care of the Standard Health Benefit, then that means
that your supplementary benefits are the issue.
And I am saying now, in here and also for the
public’s cons umption, that it will be interesting for the
insurers (I think Senator Kempe referred to this as
anonymously) to give us the information so that we
will be better informed. Because I do have significant
concerns in that in the public arena the narrative is
that, based upon the Government making an adjus tment in terms of the actual management, if you will, of
the Standard Health Premium as having this major impact on my supplementary premiums, I would like to
understand that. Because I think, again, that would
significantly inform the public discussion.
Sen. Nicholas Kempe: Point of clarification, I guess.
The President: Will you accept it?

Sen. Anthony Richardson: I will take it, yes.

POINT OF CLARIFICATION

Sen. Nicholas Kempe: Yes, I think the situatio n that
Senator Richardson was describing looks at the same
problem or the same . . . kind of pools the money from
the incorrect perspective.
It is not that the supplementals are insuff icient; it is that the claims history of the hospital usage
and the supplemental usage was being pooled by the
insurance companies. And, on average, of the $230 or
so that the Government is now taking, the claims hi story was about $175. So if that pooled claims history
was priced out and offered to private sector clients in
a competitive market, it was priced competitively.
Essentially, this move is fixing the claims rate
at $230 instead of $175 or $180. So it is effectively
increasing by a de facto way the cost of that coverage
for the hospital by about $50 per person in the private
sector —$50 times 34,000 persons insured in the pr ivate sector is the $20 million.
We are essentially going to transfer $20 mi llion worth of cost onto the private sector. That is why
the total premium is going up. It is not that the supplemental w as underpriced; it is that the insurers were
not passing on a full $230 to their clients. They were
passing on their actual claims’ history.
Sorry, I hope that helps.

Sen. Anthony Richardson: Madam President , I have
got to say thank you, but I do not agr ee because, as I
said earlier, the reality is that, based upon the information before me (which I have no reason to doubt)
the total amount raised in Bermuda for the Standard
Health Benefit programme is sufficient to cover all the
claims. And so I will lea ve it at that.
But, again, I will restate my point that it will be
interesting to inform the public by the . . . if the health
insurers pooled the information around their premiums segregated in those areas and then that was pu blished . . . and I assume that will be something that will
be done through the Health Council because, clearly,
they will want to maintain their business secrets, if that
is the right way to put it. Anyway, thank you.
And so, generally speaking, Madam Pres ident, I thank all those that played a part in preparing
the brief. There is a huge amount of information that has been included. Again, I think that the discussion
today has been quite interesting, but there still r emains some information to be put into the public d omain.
The Government has been very clear that
their intent and the intent of this Bill is to change the
way that the Hospitals Board is going to be funded for
the next coming year. The information has already
been disclosed that, in conjunction and consultation with the h ospital, the number has been agreed—the
$330 million has been agreed— and we all know, or
we already know, based upon public discussion a lready, that the hospital does have a $65 million amount that is based upon prior reserves. And I be-lieve it is accurate to say that the current estimate of
$330 million is that —an estimate. And, going forward,
the actual results of the hospital’s ability to operate within the $330 million will be determined after the
experience. And to the extent that it is not accurate this year, the $65 million will act as an equaliser. And
then, going forward, there will be more data upon
which to base the future hospital budget.
So I think we should be in very good stead.
With that, Madam President , I will conclude my wrap
up.

The Pre sident: Are you going to do the second reading?

Sen. Anthony Richardson: I now move that Standing
Order . . . oh, sorry, I now move, Madam President ,
that the Bill entitled the Health Insurance Amendment
Act 2019 be read a second time.

The President: Is there any objection to that motion?
No objection. Carry on, please, Senator Richardson.
[Motion carried: The Health Insurance Amendment
Act 2019 was given a second reading.]

SUSPENSION OF STANDING ORDER 26

Sen. Anthony Richardson: Now, Madam President , I
move that Standing Order 26 be suspended in respect
of the Bill.

The President: Is there any objection to that motion?
No objection.
Carry on.
[Motion carried: Standing Order 26 suspended.]
498 22 May 2019 Official Hansard Report

Bermuda Senate Sen. Anthony Richardson: And now, Madam Pres ident, I move t hat the Bill be read a third time.

The President: Is there any objection to the third
reading?
Three objections.

The Clerk: Standing Order 35 applies.

The President: Standing Order 35.
The Clerk: —in which case the third reading would be
carried over t o the next day of meeting.

[Crosstalk]

The Clerk: Well, we can move —
The President: Thirty -five?
The Clerk: Under the provision of Standing Order 77
you can move to suspend any rule.

SUSPENSION OF STANDING ORDER 35
Sen. Anthony Richardson: Madam President , I
move that Standing Order 35 . . . that the appropriate
rules be moved, or suspended, sorry, to allow us to
proceed.
Thank you.

[Crosstalk]
The Clerk: So, u nder the provision of Standing Order
77 you move to suspend [Standing Order] 35.

Sen. A nthony Richardson: Thank you.

The President: Is there any objection to that motion?
No objection?
Same objection?
Three objections.

The Clerk: Okay, so we can vote on that motion.
[Pause]

The Clerk: Okay, so this is on the motion to suspend
Standing Order 35.

[Crosstalk]
The President: I will read for you , then, Standing O rder 35:
“A Bill having passed through the Committee
of the whole Senate, or by leave of the Senate, having
been read a second time without referral to the Committee of the whole Senate, may forthwith be read a
third time and passed unless at least three Members object to the motion for the third reading, in which
case the third reading shall be deferred to the next
day of meeting.”
However, there can be an objection to that.

The Clerk: Yes, so, once again, we are voting [on the
motion] to suspend Standing Order 35.

DIVISION
[Suspension of Standing Order 35]

Ayes: 7 Nays: 3
Sen. the Hon. K. L. Simmons Sen. Nicholas Kempe
Sen. Anthony Richardson Sen. Marcus Jones
Sen. Jason Hayward Sen. Dwayne Robinson
Sen. Vance Campbell
Sen. Michelle Simmons
Sen. James S. Jardine
Sen. the Hon. J. E. Dillas -Wright

Absent: 1
Sen. Crystal Caesar

The President: The vote is seven to three to suspend
Standing Order 35.

[Motion carried by majority on division: Standing Order 35 was suspended in order to allow the third reading
of the Health Insurance Amendment Act 2019.]
Sen. Anthony Richardson: Madam President ?
The President: Yes?

BILL

THIRD READING

HEALTH INSURANCE AMENDMENT ACT 2019
Sen. Anthony Richardson: I now move that the Bill
entitled the Health Insurance Amendment Act 2019 do
now pass.

The President: Is there any objection to that motion?
No objection.
The Bill is passed.
[Motion carried: The Health Insurance Amendment
Act 2019 was given a third reading and passed.]

The President: Thank you, Senator Richardson and
thank you all Senators.
We will now move on to item 14.

MOTIONS
The President: There are none.



Bermuda Senate CONGRATULATORY AND/OR
OBITUARY SPEECHES

The President: Would any Senator care to speak on
that?
Senator Richardson, you can.

Sen. Anthony Richardson: Madam President , I want
to add my congratulations to all of the graduates at
the Bermuda College. I did attend last week,
Wednesday, and I was thoroughly impressed—it was
Wednesday and Thursday actually —I was thoroughly
impressed because many of the students had personal testaments in terms of what they had overcome to
get to that stage.
There were some who just had personal
struggles in terms of they started, had to stop som etimes for financial reasons, otherwise just personal life circumstances, and then return to the fold to achieve.
Some achieved, I want to say, greatness. And I really
want to emphasise the success of the dual enrolment students who attend the Berkeley and also the C edarBridge.
And I was significantly impressed because
there were at least three of those young people who
actually achieved the highest grades at the Bermuda
College, which meant that at that young age they had
to transit between CedarBridge and Berkeley and
Bermuda College, maintain effectively dual workloads
required at their high schools and Bermuda College,
and now have graduated the Bermuda College at a
level to attend the third year of an overseas university
before they graduated high school. And so that was a blessing for sure.
There are many who enrolled in a technical
programme in terms of motor mechanics. And I should not say this, but I smiled also because there were
several . . . we normally think of males in the technical
side, motor mechanics, drafting, carpentry, all the rest
of it. And I have to admit that I was pleasantly surprised that there were several females graduating
from the technical side and one or two were actually
deemed to be high achievers. And so it was just a pleasant, pleasant, opportunity to be there.
And I believe it would be appropriate to ass ociate all Senators with those remarks and looking forward, really, to the various graduations and school
leaving ceremonies that will occur between now and, I
guess, the end of June.
So thank you, Madam President .

The President: Thank you, Senator Richardson.
Would any other Senator care to speak on the
congratulatory and/or obituary speeches?
Senator Campbell, you have the floor.
Sen. Vance Campbell: Madam President , I would like
to send out congratulations to the Senior Men’s N ational Team. Now, that is the soccer team. Not only did they qualify for Group A in the Nations League, but they also achieved the historic feat of qualifying for the
Gold Cup for the first tim e ever. In a nation this size
that is a tremendous achievement and we would like to congratulate them. Those who wish to go out and see them before they go off and embark on the adventure of the Gold Cup can see them this Saturday
versus a select team from the Azores up at the N ational Stadium. I believe the game starts at 6:30 pm,
but do not quote me on that.
Thank you, Madam President .

The President: Thank you, Senator Campbell.
I am sure the entire Senate body would ass ociate themselves with your comments.
Would any other Senator care to speak?
No?
Then adjournment, Madam Attorney General,
Kathy Lynn Simmons.

ADJOURNMENT

Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President .
I move that the Senate do now adjourn until
Wednesday, June 5.

The Pre sident: Would any Senator care to speak on
the motion to adjourn?

Sen. the Hon. Kathy Lynn Simmons: Madam Pres ident?
The President: Yes, do by all means, speak.

BERMUDA DAY
Sen. the Hon. Kathy Lynn Simmons: I guess it falls
to me to wish all of our cit izens and residents and vis itors a happy Bermuda Day. We look forward to reco nvening on the fifth after we have had some rest and festivity. And I wish you all on behalf of the Gover nment, Senators, a happy holiday.
Thank you, Madam President .
The President: Thank you , Senator Kathy Lynn Si mmons, Government Leader. We thank you for your presence today in spite of not feeling well, and we
wish you a speedy recovery, as well as Senator Ha yward. Thank you for your presence.
The Senate stands adjourned then until 5
th of
June.
Thank you all very much.

[At 4:17 pm, the Senate stood adjourned, until
10:00 am, Wednesday, 5 June 2019.]


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