Should insurers bear treatment costs of Covid-19 patients?

Health insurance providers in the Sultanate are bracing for government guidelines potentially obliging them to pick up the tab for the treatment of their policyholders hospitalised for Covid-19.

From the outset of the pandemic in Oman in March, the cost of testing and treating Covid-19 patients has been shouldered almost exclusively by the Ministry of Health. But on Thursday, health authorities, for the first time, put private companies on the hook that they have a legally mandated responsibility to shoulder any costs incurred by the government in the treatment of their expatriate employees afflicted with the novel coronavirus.

The issue surfaced during the seventh televised press conference on Thursday during which Health Minister Dr. Ahmed al Saeedi clarified that COVID-19 treatment, while essentially free for expatriate patients, should ultimately be borne by their sponsors.  A role for insurance companies was mentioned as well.

Further clarity came in an official post on Friday asserting the following: “The resident (expatriate) who has a sponsor, the sponsor will bear the costs of treatment; The resident who has health insurance, the insurance will bear the costs of treatment, and this issue is now being discussed with the insurance companies; If a resident cannot pay for treatment for any reason, the Sultanate’s government will ensure he gets treatment.”

Insurance providers contacted by the Observer confirmed that they are already in discussion with the regulator (Capital Market Authority – CMA), among other authorities, about the scope of any COVID-19 related cost burden on them.

“Discussions have been ongoing between us and the regulator, but we have not yet received any directives with regard to this issue.  We anticipate some announcement to this effect early next week,” an executive representing a leading insurer said.

The deliberations, the executive noted, cover issues to do with, among other areas, patient cost-sharing, prior authorisation waivers, co-pay, exclusions, and so on.

According to experts, pandemics are typically excluded from health insurance coverage as a norm, although exception can be made by insurers against the payment of an additional premium.  However, when a natural disaster amounts to a national calamity, it is common for authorities to reach out to insurers to help ease the burden on the state.

In the Sultanate, there are precedents to illustrate a possible role for insurance firms in alleviating the pandemic treatment cost burden on the government.  For example, when Tropical Cyclone Gonu, among other equally disastrous extreme events, struck parts of Oman over the past decade, local insurers were urged to settle flood claims although such natural disasters are typically excluded from coverage. The same principle also holds good in the case of COVID-19 coverage, it is pointed out.