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Rising costs for specialist medical care strain the state budget

Just six months into the budget cycle, the government has run out of funding for tertiary care for indigents, seafarers and veterans which cannot be provided by the Health Services Authority.

The $20.9 million originally budgeted for the year has already been exhausted to pay third-party medical providers, both locally and overseas.

Parliament’s finance committee last week approved an additional $8 million, but that is unlikely to be enough to cover the current monthly running costs of $3.3 million.

Health Minister Sabrina Turner told the committee that internationally, health care costs have risen and her department estimates annual funding should be between $38 million and $41 million in 2022. .

“We have seen an increase in this figure simply due to the increase in the number of indigents since the lockdown, seafarers and veterans, and their dependents. But overall, the cost of tertiary health care has gone up,” Turner said.

Members of the committee agreed that the notorious “NGS 55” production position was “chronically under-budgeted”.

The current budget has allocated $20.9 million in 2022 and $21.6 million in 2023, although last year’s estimates already projected $35 million for the annual cost of tertiary health care for the indigent. , sailors and veterans.

Indigent Health Benefits and Seamen and Veterans Overseas Benefits are administered by CINICO as an administrative service only. CINICO pays claims and then immediately bills the Department of Health and Welfare.

While health risks are entirely borne by the ministry, the public insurer still faces a liquidity risk, if the government does not pay on time.

Finance Minister Chris Saunders said the $8 million should see the government through the summer to the next session of parliament, most likely in September. Funding needs could then be reassessed.

Red Bay MP Alden McLaughlin said, despite being fully aware of the issues affecting this appropriation, “I think it’s time we got more realistic about budgeting for this”.

“Overall, we need to find a way to make managing these kinds of issues more affordable. I really hope that in the effort to essentially expand and redefine the role of CINICO, we can find something that helps here.

Saunders said the government agreed with the opposition on the issue. He noted that the vast majority of costs related to emergencies. Having people insured meant the government could use reinsurance to limit some of the financial impact.

In addition, the Department of Health was working to encourage people to get checked regularly so that certain problems could be detected before they became emergencies, Saunders added.

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