Bahrain could become the latest Gulf state to enact a compulsory medical insurance law. Mairi Mallon explains the potential timescale for proposals, which are expected to spur a further bonanza for Gulf insurers.

Bahrain’s decision to introduce a form of compulsory health insurance for residents will have a huge impact on insurers and reinsurance in the region.

With a population of around 1.2 million people, and with only a small percentage currently with private medical insurance policies, the scope for developing products for this market is enormous.

“The potential for a compulsory scheme is therefore huge for the insurance industry, even in a country as small as Bahrain,” said Yassir Al Baharna, chief executive of Arig.

Bahrain, in line with many other Gulf Cooperation Council states, has been reviewing the way it provides healthcare to its residents, both expatriates and Bahraini nationals. One option considered is some form of privatisation and compulsory health insurance to cover rising costs.

Any reforms will most likely not be introduced until 2010, due to the complexity of the introduction of the scheme and is expected to be introduced in stages. Expatriate workers are seen as the most likely group to start the scheme, with further waves of residents to follow.

Bahrain’s Administration Adviser at the Ministry of Health, Dr Amal Aqla, said the scheme for foreigners to pay health insurance is expected to be implemented “soon”, but that it was yet to be decided whether employers would also be obliged to pay the health insurance premiums for family members of their employees.

Insurers, reinsurers, hospitals, clinics, brokers, third party administrators and government bodies all took part in the workshops and discussions.

“What became clear from the 2 days was that there was no party that was yet ready for compulsory insurance applicable to all expats or nationals,” said Al Baharna. “Provider infrastructure, government planning, how it should be administered and priced were all key areas which still require much development. 2009 is unlikely to be the year when Bahrain adopts compulsory medical insurance for all.”

He added: “However, the intention remains that the health service in Bahrain will be reviewed and that insurance will play a large role in that.”

Al Baharna said that Arig remained optimistic that the concerns identified and highlighted in the BIA workshop will result in a strong and effective solution for Bahrain and all parties will subscribe to it and support when implemented.

“But what we see here and in other countries that have already adopted some form of privatization is that to rush in before all necessary infrastructure is ready will result in additional problems than solutions, which may result in a lack of confidence in our insurance industry,” he added.

The proposed first wave of the scheme excludes expatriates married to Bahrainis, children of Bahraini mothers married to foreigners and domestic workers, especially if the family has only one domestic help.

"At the moment, the ministry through its hospitals and health centres are offering medical services to foreigners for much less than the actual cost," said Dr Amal.

The new insurance premiums for expats should cover the cost of medical check up, laboratory tests and surgery (except cosmetic) as well as medicine and dental treatment fees.

As part of the bill which is set to be passed in 2009, a general authority for health insurance would be established under the ministry to set the criteria to select public or private hospitals suitable to be included in the authority's preferable medical centres.

The authority will also evaluate cases that should be treated for free in public hospitals, especially in emergency or rare cases that are not included in the insurance.

The authority's inspectors would check on insurance companies to make sure that they follow the rules and orders as well as provide good services to employers and expatriate workers.