Fully-fledged Maltese health insurance company enters the market

by David Kelleher

The advent of private clinics and hospitals over the past few years has encouraged people and companies alike to take out health insurance policies.

The increase in medical fees and the backlog at the local hospitals has contributed no end to an increase in the number of insurance agencies offering health plans and an increase in clients seeking health cover.

While many local insurers represented foreign companies offering health plans, there was never a fully-fledged Maltese insurer offering its own specific product.

Some months back, international trends and an increase in takeovers forced many to rethink their position. Laferla Insurance was faced with a similar dilemma. One takeover after another saw the company examining its position with the result that Laferla opted for a new concept of health insurance in Malta - setting up its own health plan scheme.

"Health companies in Malta were all foreign. In the beginning we represented PPP, however numerous takeovers and merger created a very difficult situation. We could have gone to another foreign company but decided to set up our own - Laferla Health Plans," Pio Dalli, manager (medical department), told The Malta Business Weekly.

The new health plans are underwritten by Middle Sea Insurance plc. There are four different health plans, three of which have two separate options. These are: Medical Treatment Cover, Malta Private Hospital Cover, Malta-UK Cover, and International Medical Cover.

"The decision to have our own company came about because we felt that we had enough experience to do it ourselves. We have been in the health insurance sector for 13 years and it was an easy transition for us," Mr Dalli said.

He added that the plans catered for everyone - those who could afford to pay a minimum and those who could pay a lot more. Mr Dalli emphasises that giving the client a good service and what he or she deserves, were the hallmarks of the company.

"We ensure that our clients are given a good service and they receive what is due to them. Unfortunately, there are those who always try to get more out of their health plan by presenting fraudulent claims," Mr Dalli said.

Most of the fraudulent claims are made by individuals who try to get more than they should. This is done by changing the details on the fiscal receipt or by saying they required further medical help when this was not the case.

Mr Dalli said that in some cases, though they are not frequent, individuals receive help from medical professionals who over-state the actual amount the treatment or service really costs.

"Although these cases are rare, they do exist. However, in 95 per cent of cases, fraudulent claims are made by individuals alone," Mr Dalli said.

Despite occasional hiccups, he added, they had an excellent relationship with the private hospitals and clinics. "This relationship is extremely important because clinics and hospitals are the third party between the insurer and the client," he said.

The number of claims made in the health sector is phenomenal and are on the increase in Malta.

"If one had to make a very conservative estimate, around 400 medical claims are made daily. While most are genuine, you find many cases where clients try to make that extra Lm2 by arranging the receipt or changing Lm10 in Lm15.

"What is worrying is that medical professionals may increase the fees because they know the patient is insured," Mr Dalli said.

This can have a negative effect on the client. Unlike other professions where fees are regulated, medical charges are not.

"Medical fees should be regulated accordingly. At the end of the day, the client is going to suffer - as claims increase, so do premia as well," he said, adding, "People don't report these cases because they are afraid that it will backfire on them. I don't think this is the case. We are talking about medical professionals who are responsible... very responsible."

With regards to the Medical Council and its set-up, Mr Dalli said he felt there had to be some changes in its composition.

"I have absolutely no doubts about the integrity of those on the council, on the contrary. However, the council is composed of medical professionals who, in turn, know each other and those working in the sector.

"When they are hearing a case, they are facing someone they know. There should be medical experts on the council as well as retired professionals, a representative of the public - who can see the case from a different perspective - and someone who is experienced in making a judgment," Mr Dalli said.

Asked how Laferla's decision to set up its own health plans affected its existing client base, Mr Dalli said they had received enormous support from their clients who remained with them.

"Over the years we established an excellent relationship with our clients. Many returned to us after the change even though that meant starting afresh. I think that the reasons why they came back was the level of service offered - efficiency, payment within seven days, and that the client received what was due to him," Mr Dalli said.