SHTA has serious concerns about draft NHI legislation

~ Believes implementation should be postponed ~

PHILIPSBURG–The St. Maarten Hospitality and Trade Association (SHTA) has some serious concerns with several aspects of the draft National Health Insurance (NHI) legislation, which Health Minister Emil Lee is hoping to table in Parliament before the end of this year.

The Association says its concerns are not adequately reflected in the draft and believes that authorities should postpone the implementation of NHI.

In an invited comment on the draft, SHTA a private sector/employer representative said it is concerned about Social Health Insurance SZV being the provider for NHI. “SHTA is not convinced that SZV will be able to do this adequately. SHTA is concerned about the private insurers being forced out of the market and government granting a mandated monopoly to SZV. Without proper representation on the Supervisory Board of USZV, employers have insufficient influence on the direction of this organisation and the management of the funds that are the responsibility of USZV. Mind you, the moneys contributed to these funds are primarily generated by the private sector and its employees,” SHTA told The Daily Herald.

SHTA also has reservations about the lack of proper statistics on the island’s population. With official numbers on the population ranging from 40,000 to 60,000, the Association said there is considerable downside risk to the 50,000 number used in the calculations.

The Association is also concerned that the estimated cost-per-person is significantly under estimated. The most recent annual average cost-per-person as recorded by comparable funds in Curaçao and Aruba are in excess of NAf. 4,400 per year, while St .Maarten’s model runs with approximately NAf. 3,600. “We have not received an explanation of the difference between actual expenses in comparable (albeit larger) islands and populations and the estimated expenses of the model. SHTA doubts that we will be able to provide care on St. Maarten cheaper than Curaçao and Aruba are doing. Combining this with spread in the population numbers, if the cost ends up being 60,000 x NAf. 4,400 instead of 50,000 x NAf. 3,600, you have a deficit in year one of 84 million guilders.

“Currently government does not make a structural contribution as an employer. ZV/OV funds from the private sector are about 12.5 per cent of the payroll (employer/employee part). But, in the end the employer pays all of it, the rest is bookkeeping. Civil servants fall under the OZR which is a completely different structure. Government pays the cost of the care as opposed to paying into a structural fund, herein lies part of the problem with the current deficits.

“Also, government has a history of non-payment of its legislated financial contributions to the funds. This year Government adopted legislation that allowed it to retroactively pay into the AVBZ fund. This type of payment behaviour does not create the level of trust necessary for SHTA to agree with implementation of NHI. SHTA needs a guarantee that government will pay the NHI premiums for its employees, as well as the annual additional contribution for those persons who cannot afford to pay premiums,” the Association said.

Below Standard

According to the Association, the NHI legislation has been prepared under great pressure and stress. The Councils of State have been asked for their comments, but have been given only very short periods of time to do so. As a result, the quality of the legislation is below standard and this will cause a lot of litigation in the future, SHTA contends. It said also that many key ingredients of the legislation are yet to be decided. “These issues will be arranged in Federal Decrees, many of which will not be reviewed by the SER and which will not be subject to prior approval of Parliament. This is, in SHTA’s view, a serious deflection from the democratic principles that St. Maarten’s society and Government is based on.”

Also, SHTA does not agree with the interpretation that the Committee for Financial Supervision CFT is “forcing” the implementation of NHI. “This has been discussed with government as well as the CFT. On the one hand government says that CFT is pushing the timeline for implementation, while the CFT indicates that it has always been told that government would resolve the healthcare deficit issue by implementing NHI. Either way, SHTA is very concerned that rushing this through will do more damage than it’s worth.”

The Association said while these are some of its major concerns there are many more. SHTA’s concerns are based on the impact to the private sector employers in particular and the economy in general. “We do not attempt to say what is right for the care providers because we don’t have their expertise. The unions also have a big role to play when it comes to their membership who could be termed the consumers. Of course we have our opinions, but unless specifically asked by different groups of stakeholders we will not stray onto their territory.

“We do this out of respect and not because we do not care. SHTA’s vision is to promote and contribute to improving quality of life for everybody on St. Maarten. We want to see our employees thriving and we want to see specialists and care institution thrive as well, but it has to be sustainable.”

Asked whether its concerns have been conveyed to authorities, SHTA said they have been raised many times. “We feel that some concessions have been made verbally and there has been a shift on some important points. However, we do not see our position adequately reflected in the draft law proposal and that is worrisome.”

Asked how it believes that its concerns can be addressed, the Association said: “By being very clear in the actual law proposal, sharing information (and – Ed.) by putting a proper working group together that will really look at attempting to solve some of these issues.”

As for the repercussions, if its concerns are not addressed in the final draft of the NHI, the Association said: “Our main concern is that there will be a shock to the economy that cannot be mitigated. The business community of St. Maarten faces several issues. There is an attempt to make labour laws more rigid. There is an attempt to increase certain taxes and there is an attempt to implement NHI. All these three issues will increase the cost of doing business and erode our competitive position.

“If NHI runs a deficit that means that taxes will go up even more the year after. Once NHI is implemented and private insurers taken out of the market, there is no going back. The increase in the cost of doing business will negatively affect other aspects of the economy like employment, prices and tax revenues. SHTA is afraid this will get us into a downward spiral that will be difficult to reverse (but easier to prevent). Two important conditions, as stated by experts hired by the Ministry [of Health, Labour and Social Affairs] VSA – a strong economy and an acceptable level of trust in government – are not there.”

Postpone implementation

SHTA believes that government should postpone the implementation of NHI, and it should develop proper data and work on its relationship with the social partners before implementing the legislation. “And when actually moving ahead with NHI, be very, very careful,” SHTA said.

The NHI law proposal is a framework law. It would delegate legislative authority to the Council of Ministers to “fill in the details,” such as who pays what, who gets what etc. There are 34 instances of these decisions within the framework law. Government will not need to have parliamentary approval in order to implement their decisions. This makes it technically possible to exclude certain groups from having to pay or to set different rates for different groups.

It will theoretically be possible to create a new second tier, progressive premium bracket type of income tax without the involvement of Parliament, whereby higher earners are charged progressively more (a higher percentage). It will be possible to establish a co-pay system whereby the higher income earners (who pay the highest premiums) get the least coverage.

Lee told reporters on Wednesday, that the draft will be sent to Parliament before the end of this year. It is expected to become applicable in two years so authorities will have two years (until 1/1/20) to fill in the (34) details. However, the intention is to raise the SZV wage limit by 1/1/18 to NAf. 100,000 significantly increasing the number of ZV/OV insured. Raising the SZV wage limit will affect only the private sector as its limited to ZV/OV, SHTA says.

The healthcare scheme for the civil servants will not be affected. “The private insurers will suffer and the entire burden will fall squarely on the private sector in the first two years. Private insurers will probably stop offering medical coverage. The cost of doing business will go up. Prices will rise. The system lacks all the proper feedback mechanism for identifying problem areas and mitigating negative effects,” SHTA noted.

Government, the Association adds, has issues when it comes to proper tax collection. “We have a fiscal system that is destructive to local business. Compliance is low and all the efforts made still have to bear fruit. We have a large informal economy. Without a significant investment and effort in enforcement, without significant changes to our fiscal system, the informal economy will grow and more legitimate businesses will fold. The planned phased implementation of NHI will burden mainly those currently paying taxes. It remains to be seen whether the efforts to increase compliance bear fruit, and whether the implementation of NHI actually broadens the base for the fund. There is a real risk of making a bad situation much worse while at the same time causing progressively increasing deficits for government.”

The Association said it is cognizant of the fact that something needs to be done to guarantee the sustainability of St. Maarten’s healthcare services. “We also fully support the solidarity principle. We have at all times provided time and expertise to this process. We have engaged with the stakeholders and provided alternatives.”

Source: The Daily Herald


  1. Actually it is about 40.000 not 50.000. Average premium per insured is about 300,- per month split between employer and employee. Some will pay way more. Some pay less. Some won’t pay at all. Healthcare comes at a price and it is expensive. Start to accept that and adjust your spending.

  2. SVB Curacao reported in their 2016 financials that the average cost per insured was 3.295 in 2016. Not 4.400 as the SHTA assumed.
    So their projected 84 million deficit is quite inaccurate.

    The NHI has a projected cost of 3.600 per insured. It is a realistic projection compared to the numbers of Curacao.