The announcement this week of a new law requiring all employers in the emirate to purchase health insurance for their expatriate staff, will be the catalyst for more private investment in the emirate’s healthcare sector, in the same way a similar law in Abu Dhabi did in 2005, the head of the UAE’s largest health insurer said.
The new law, approved by Dubai's ruler on Tuesday, will be rolled out within three years and will make employers responsible for providing at least an "essential benefits package" for every worker.
It will come into effect in several phases by 2016, the Dubai Health Authority said in a statement on Wednesday. The government will remain responsible for the coverage of local citizens, who are estimated to make up less than a fifth of the population.
“The introduction of the law is excellent news for Dubai. As a key stakeholder in the implementation of the Abu Dhabi law, we have first-hand experience of the numerous benefits such a ruling has on both residents and visitors,” said Michael Bitzer, CEO of Daman, the UAE’s largest health insurer with over 2.4 million subscribers.
“From an economic perspective, the law will catalyse private investment to the healthcare sector which in turn provides a greater option of health facilities and new specialised treatment centres – examples of which are evident in Abu Dhabi since the introduction of the law here in 2005,” he added.
According to official estimates, only 40-50 percent of Dubai's residents are covered by government and private health insurance schemes today.
Although it is unclear how much the required insurance policy will cost, Dubai-based Arqaam Capitalestimates patient claims in Dubai will more than triple by 2016 to AED4.8bn ($1.3 billion) from AED1.3bn a year today.
"We see a medium-term positive for NMC Health, Al Noor Hospitals, and to a lesser degree insurance underwriters in Dubai," Arqaam Capital said.
It said, however, that it was not changing its ratings for the companies' shares, which are "buy" for NMC Health and "hold" for Al Noor Hospitals.
When Dubai's neighbour Abu Dhabi introduced mandatory health insurance patient claims quadrupling as a result, Reuters said.
Arqaam Capital said the move could also spur growth in hospital bed capacity. The UAE has 1.9 beds per 1,000 residents while the global average is 3.0 beds and that for developed countries is 5.5 beds, it said.For all the latest health tips & news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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