PHILIPSBURG – Medical expenditures in St. Maarten went through the roof between 2014 and 2017 and increased by 48.2 percent from 82.3 to 122 million guilders. In 2017 alone SZV collected 74 million in premiums for the ZV/OV (health care and accident insurances) while it paid out 108 million in benefits.
These numbers appear from a recent presentation by Minister Emil Lee (Public Health, Social Development and Labor) to parliament. The General Health Insurance plan is designed to bring these costs down.
Currently the ZV/OV fund has a projected negative reserve of 148.7 million guilders by the end of 2018. The FZOG-fund which covers medical expenses for retired civil servants has a shortage of 19.3 million.
Medical expenditures explode but SZV remains financially healthy
Nevertheless, with a 6.39 assets-to-liabilities ratio and a solvency ratio of 9.37 SZV is able to meet its long term liabilities without any problems, the minister said.
SZV’s premium income in 2016 was 208.3 million guilders but in 2017, due to the impact of Hurricane Irma, it dropped 1.2 percent to 205.9 million. The monthly premium income collapsed in September 2017 – the month of the hurricane – to around one million guilders. In 2018, premium income recovered, but in the first seven months it still remained around 20 percent below the 2017 income-level.
The FZOG and the ZV/OV funds are the only two with negative reserves. The other funds will have projected healthy reserves totaling 642.8 million guilders by the end of 2018, divided as follows: AOV (General Old Age Insurance) 403.6 million; AWW (General Widow(er)s and Orphans Insurance) 128.3 million; Cessantia: 14.2 million; AVBZ (General Insurance for Exceptional Medical Expenditures) 96.7 million.
By the end of 2017 the combined AOV/AWW fund had a surplus of 508.1 million guilders, the AVBZ-fund 90.2 million and the Cessantia fund 13.7 million. Since 2015 SZV has not paid out a single Cessantia-claim.
The shortages in the FZOG and ZV/OV funds are cross-financed with the surpluses from the other funds. The results of these two funds are structurally negative. Bringing the FZOG-fund up to par requires a premium-increase according to the minister’s presentation.
The government’s internal auditor SOAB (the government accountant bureau) found that the number of former employees under the ZV-fund seems to be very high. The SZV’s lack of access to tax and census data hampers checks on eligibility. The SOAB furthermore noted in its report that medical referrals are not properly regulated in the health insurance law.
Retired civil servants who benefit from the FZOG-regulation get 100 percent of their expenditures reimbursed. According to the SOAB this ought to be 90 percent for medical costs and 75 percent for lodging expenditures.
The government’s debt to SZV stands at 82.41 million guilders. This is the result of “challenges in government revenue” in the years 2016 and 2017, Minister Emil Lee’s presentation reports. The government is now “actively working” with SZV on a solution for these newly accumulated debts.
