Dubai’s Mandatory Insurance Scheme

Posted on May 28, 2014 by Ailee Slater (G+)  | Tags: Dubai mandatory insurance, Dubai happiness insurance, UAE health insurance, Abu Dhabi mandatory insurance, Middle East health insurance, Dubai health care

In 2005 Abu Dhabi implemented a law that all employers must offer health insurance coverage to their workers. Across the gulf states of the Middle East, many similar policies have been enacted: Saudi Arabia offers universal health care and extended insurance to foreign workers and dependents in 2008; employees of large firms in Oman receive employer-sponsored medical coverage; and Qatar has announced that all nationals and expatriates will be insured this year thanks to a mandatory health coverage law. 

The gulf states are proving to be world leaders in universal insurance legislation, and the most recent emirate to take up this health care agenda is Dubai. 

At the end of November 2013, the Ruler of Dubai Sheikh Mohammed bin Rashid signed off on a mandatory insurance policy that will require all employers to provide health coverage for their employees – both national, and expatriate. The plan will be rolled out over three years, with a series of deadlines that business owners will be expected to meet. By October 2014, companies with 1,000 or more employees must offer insurance to all staff. The second deadline is July 2015, when businesses with less than 999 and more than 100 workers will have to give employer-sponsored coverage, and by June 2016, the mandate will extend to workplaces with less than 100 employees. The spouses and dependents of employees must also be covered by workplace insurance starting June 2016. 

President of the Dubai Health Authority Essa Al Maidoor has said that this mandatory insurance policy will support the medical needs of the 2 million Dubai residents who are currently uninsured. Since fully implementing its coverage law four years ago, Abu Dhabi has achieved a populace wherein 98 percent of people hold health insurance. 

Like Abu Dhabi, Dubai is home to a large number of foreign workers, most of whom are not entitled to health benefits. These workers are also on a low pay scale (Dubai saw strikes last year from blue collar employees protesting their average salaries of US$160 to $190 per month), meaning that little money is saved to pay for future health care expenses. Across the UAE around 90 percent of laborers are migrant workers, according to the Emirates Centre for Human Rights, and this huge number of foreign labor highlights the need for a health care policy that takes this population into account. The Emirates Centre for Human Rights has previously called on host countries to provide basic health services to migrant workers, and to ensure that the living conditions of these laborers are hygienic and not over-crowded, in order to prevent disease. 

Dubai’s new health insurance legislation will no doubt please the Emirates Centre for Human Rights and other groups advocating for the needs of migrant workers in the UAE. Not only with the health insurance mandate give free health coverage to foreign employees (and eventually their dependents), but the health mandate will also protect workers by prohibiting employers from deducting the cost of insurance from salaries. Foreign workers, like all Dubai employees, will be guaranteed a benefits package that meets the government’s minimum standards benefits package – services such as MRI scans will not be covered, but with even the lowest cost insurance plan, employees will be able to receive basic medicine and visit the hospital in an emergency. 

In terms of cost, the government of Dubai is confident that a greater percentage of insured residents will lead to profits for hospitals and give the insurance industry a boost. Speaking with Gulf News, the managing director of insurance and financial services provider Continental Group, Ashok Sardana, said that mandatory health coverage could prove beneficial to personal finances as well, because families will no longer be at risk of losing their savings in the case of a sudden injury or illness. As for employers themselves, the Dubai Health Authority is hoping that the low cost of a minimum benefits package (1.5 percent of workers’ salary) will keep costs down and not encourage companies to fire workers or only hire those without dependents. Health Authority Essa Al Maidoor has also mentioned that with better health amongst their workforce, employers can expect higher levels of productivity. 

However, not everyone is convinced that the new mandatory coverage law will be effective, or affordable. Dr. Lalit Uchil of one private clinic in Dubai has expressed concerns that if 2 million more people are given health insurance, government hospitals may be unable to meet their demand for services. There are just three government hospitals in Dubai, which may require more beds, medications and staff in order to attend to so many new patients. 

In his interview with Gulf News, Dr. Uchil also brought up the problem of cost of medication: because prescription drugs in Dubai tend to be more expensive in Dubai than in other countries, expatriates will often bring in their own medications when coming to the UAE. To encourage local prescription filling, Dr. Uchil has said that the government must create more drug subsidies to lower prices and keep money flowing into the Dubai pharmaceutical industry. 

The name of Dubai’s mandatory insurance scheme was announced in early 2014: the Insurance System for Advancing Healthcare in Dubai, or ISHAD, an acronym that means ‘happiness’ in Arabic. Health Authority President Al Maidoor has said that the health scheme was named thus as a response to Sheikh Mohammed bin Rashid’s recent statement that governments within the UAE have a responsibility to bring happiness to the people they rule. If Dubai’s health plan can be implemented as planned, and another 2 million people within the emirate have access to suitable and affordable health care, a happiness may indeed result.