As Oman becomes the latest Middle Eastern country to announce plans to require foreigners and expatriates to have health insurance, executives whose companies typically supply such insurance say details are still being worked out – as has been the case, they note, in other Gulf countries that have moved to a compulsory insurance model over the last few years.
Located on the southeast corner of the Arabian Peninsula, where it shares land borders with the United Arab Emirates, Saudi Arabia and Yemen, Oman has a resident population of around 4.2 million, of whom more than 40% are said to be expatriates, according to UN data.
As reported here last week, the announcement that Oman plans to require nationals and foreigners working in the private sector to have health insurance was made by the country’s minister of health, Dr Ahmed bin Mohammed bin Obaid Al Sa’eedi, and carried on the website of the Times of Oman and other regional publications’ websites. The new regulation is scheduled to come into force in January.
Currently only 9% of Omanis and 10% of expats in the private sector are said to be insured, suggesting a potentially large market for private health insurance providers.
For these insurance companies, such compulsory health insurance rules represent a significant potential business opportunity, but, say those who have had some experience in such situations, it’s not simply a question of setting up a stall and signing up thousands of eager, currently un-insured clients.
Details ‘still being worked out’
For one thing, Marco Bannerman, Aetna International’s Dubai-based executive director of distribution for the MEA region, explains, the details covering the Oman scheme “are still being worked out”.
“What we do know is that Article 33 of Omani Labour Law states that all companies are required to provide medical insurance for their employees starting from January 2018,” he says.
“It states an employer may satisfy this legal obligation in relation to the payment of medical treatment for expatriate employees by providing medical insurance for its employees with a third party insurer, which insurer would pay the government or private hospital directly when the employee receives medical treatment at these health institutions.
“Although the law says an employer is not obligated to provide medical insurance to an Omani employee, as they are entitled to free medical treatment at all government hospitals, the new health insurance scheme will cover the nationals as well.”
Bannerman and other industry experts say that the other Gulf countries will gradually follow suit, like Kuwait, Bahrain and Qatar, by 2020 if not sooner.
As reported here last year, the number of countries that are moving in the direction of requiring those arriving at their borders to prove they’ve got a health insurance policy, whether purchased by the individual or paid for by their employer, has been growing, particularly in the Gulf, where several years of low oil prices have left government coffers depleted.
The first Middle Eastern jurisdiction to move in this direction was Abu Dhabi, but it was quickly joined by Dubai and then other countries in the region.
A number of other non-Middle Eastern countries also require health insurance for those coming from abroad, including Switzerland, Germany, the Netherlands, Czech Republic and Australia. (See chart, below, from International Investment’s 2016 report.)
‘Oman isn’t Dubai’
If the news that Oman is moving towards requiring nationals and expatriates working in the private sector to have health insurance hasn’t caused a stampede of insurance industry executives into Muscat – the capital city of Oman – one reason could be that it is some way off of being the United Arab Emirates, for now at least, in terms of numbers.
With a resident population of around 6.1 million people, the UAE’s population is half again as large as Oman’s, and almost 90% of its residents are expatriates, so the size of its potential expat health insurance market might be roughly estimated at around 5.3 million, compared with just 1.37 million in Oman.
Nevertheless, says Zahir Sharif, managing director of Asia, the Middle East and Africa (AMEA) for Hong Kong-based Now Health, the company expects to find interest there in its plans. Currently the Gulf and wider Africa region accounts for approximately 40% of Now Health International’s membership, many of whom are signed up by locally-based insurance brokers.
“While the expat population in Oman may not be as well established as in other parts of the region, as businesses face increased competition to attract global talent, companies operating out of Oman will need to find ways to further differentiate themselves,” Sharif explains.
“And one way to do this is by offering top quality international health insurance for their employees.
“Increasingly we’re also seeing the expat workforce demanding more than just health insurance, which is why we’ve recently enhanced our WorldCare plans globally to offer new added-value services, including second medical opinion, global concierge and travel safety alerts.”
Implementation could come quickly – or not…
Paul Winstanley, head of business development at Generali Global Health, points out that those who think Oman will take its time in bringing its compulsory health insurance scheme to full implementation may well be right – but then again, they might be in for a surprise, as Gulf countries have been known to move quickly in implementing regulations once a decision has been taken to do so.
For now, Generali is “monitoring what is happening in Oman and, as yet, there are no concrete plans in place, as the detail has not been released,” he said.
“That said, as things in this region can move very quickly, I would expect that [Oman’s] plans will progress, but I am not sure it will be that early in 2018.
“We have a team on the ground in the region, and a great network of hospitals in place, so we are ready to proceed if and when the green light is given.”
Winstanley noted that medical inflation is currently running at around 5% annually in Oman, which isn’t as high as it is in some other parts of the Gulf, so “enforcing mandated insurance – particularly for expats – will not necessarily reduce this”.
“In fact, it may have the opposite effect, as hospitals and doctors may become more ‘commercial’ in their approach – over-treatment in this region can be an issue.
“The key driver may be more the controlling of the state purse.
“My expectation would be that Oman will follow the Abu Dhabi/Dubai model of mandating certain benefits, and enforcing the insurance requirement through the visa awarding process. This model is ‘tried and tested’, easily copied and well understood by all of the IPMI players in the market, so should not be that disruptive.
“It may be interesting to see if the government seeks to limit which insurers expats can buy from.”
David Hilton, senior international account manager for Jelf, the UK-based insurance and employee benefits consultancy and broker, said that it isn’t too soon for employers of expats currently living in Oman, and their HR teams, to begin to “engage in conversation with their existing insurers, brokers and consultants to ensure they are prepared for the changes” coming to Oman, with respect to its health insurance regulations.
“Those with no current medical insurances in place for their employees in Oman should seek guidance from a suitable global benefit professional.”
Below, a chart from International Investment’s 2016 report on the growing number of jurisdictions that are requiring foreigners working and living in their borders to have health insurance.