Bermuda residents will see health insurance premiums rise by nearly $40 a month starting April 1. The increase is intended to cover retroactive payments owed to hospital staff following recent salary negotiations, MPs heard yesterday.
Health Minister Kim Wilson said the government-set standard premium rate (SPR) will increase to $439.55 per month. She explained that the rise is necessary to fund $38 million in back-pay for hospital staff resulting from agreements with the Bermuda Public Services Union.
“The SPR was last raised on November 1, 2021, when it was set at $400.31 per month,” Ms. Wilson told the House of Assembly. “Since then, medical costs worldwide have continued to rise. Bermuda faces the same pressures, affecting hospital operations, clinical care, medical equipment, and pharmaceuticals.”
The salary negotiations covered the period from April 2022 to October 2025. They included an 18.23 per cent salary increase and a cost-of-living adjustment. The $38 million owed to staff will be paid in two equal instalments, the first of which was paid on January 30. The second instalment is due by April 30, 2026.
Ms. Wilson said $19 million has already been allocated, while the remaining amount will be funded partly by government reprioritisation and partly by increasing the SPR. “An independent actuarial review determined that an increase of $39.24 per member per month is required to maintain the financial stability of Bermuda’s health system,” she said.
The minister emphasized the importance of the mutual reinsurance fund, which supports high-cost hospital services and shares risk across the population. “If the fund is not stable, the entire healthcare system cannot remain stable,” she said.
A statement from the Ministry of Health noted that the SPR increase represents an average annual rise of about 2.1 per cent since November 2021. Half of the $38 million in back-pay is being covered by the consolidated fund. Without this government contribution, the SPR increase would have been double the announced amount.
Ms. Wilson said the increase will not affect those on the Government’s FutureCare plan, many of whom are seniors. “This adjustment is necessary to support the sustainability of hospital services and ensure Bermuda’s healthcare system continues to function effectively,” she said.
Shadow Health Minister Craig Cannonier asked whether SPR increases would become a regular practice. Ms. Wilson responded that annual adjustments based on service usage are being considered, though healthcare inflation in Bermuda typically runs around 10 per cent per year.
Residents were initially warned of a premium rise last December, but the exact figure was not announced at that time. The minister clarified that the $39.24 monthly increase reflects only the government’s funding needs and that private insurers may adjust premiums separately.
“The government has worked to keep this increase reasonable while ensuring healthcare workers are supported and essential services remain available to all Bermudians,” Ms. Wilson concluded.
