A significant increase in health insurance premiums that would have ramped up costs by $45 a month per resident is to be headed off in the coming fiscal year.

David Burt told the House of Assembly that the Government was “holding the line on health insurance costs”, courtesy of a sustained trimming of the country’s deficit.

However, he told legislators that the island could not achieve a “meaningful” cutback in its punishing cost of living without putting in place “significant” tax reforms.

The Premier added: “Any politician who says otherwise is not being truthful.”

Deterring higher government health premiums will be achieved, thanks to extra borrowing in 2020 at the height of the Covid-19 pandemic.

The fund, placed in its own account, was based on the assumption there would be $408 million in deficits racked up before the balancing of the country’s Budget.

However, the Premier said deficits had added up to $322 million, leaving $89 million to spare in the excess borrowing account.

The surplus will allow a $30 million transfer to the Mutual Reinsurance Fund, through legislation to go before MPs, that would get used to maintain the three-year freeze on government health insurance.

That move would avert a rise in the government health insurance rate that would otherwise hit each resident to the tune of $540 a year, owing to increased health claims attributed to the ageing of the population.

Mr Burt’s Budget Statement allocated $200.4 million to the Ministry of Health for 2024-25, or an increase of $1.2 million.

It includes $112.5 million in Bermuda Hospitals Board patient subsidies for the youth, indigent and the aged, while a grant to the Mid-Atlantic Wellness Institute will go towards mental health services.

The ministry’s survey of the community’s health is expected to result in the core benefits package for universal healthcare to be drawn up for its launch in July 2025.

Mr Burt added that ministry capital funding would get $8.9 million extra, which would include completing renovations for the Mangrove Bay Clinic — a health facility serving the West End.

He touched on the coming need for “construction of new healthcare facilities for our seniors” but warned that the island’s infrastructure needs were “great”.

Mr Burt also sounded a positive note on the island’s underfunded pensions.

He said the Cabinet had approved revisions to the Public Service Superannuation Fund, backed by unions, that would keep the PSSF “sustainable into the future”.

He said the Contributory Pension Fund, commonly known as social insurance, would get a lifeline from “some variation of an increase in retirement age and increases in contributions”.

Mr Burt also said the Government had heeded advice to top up pension funds from the coming corporate income tax.

The advent of the global minimum tax is forecast to bring gains to the Government beginning in the 2025-26 fiscal year, which Mr Burt said would address the “urgent needs” presented by the high cost of living.

He told the House: “The increase in the cost of living is, at its core, a product of our small size, our need to import nearly all of our goods, and the fallout from wars, supply-chain disruptions and rising interest rates overseas.”

Mr Burt said a possible $187.5 million of corporate income tax revenue in 2025-26 would help cut costs, including seeding a new health insurance fund with an injection of capital as universal healthcare launches.

The Premier told MPs it could be applied to bringing down import costs on fuel as well as on “hundreds” of essential items.

Mr Burt said the CIT would yield “at least $375 million in additional revenue” for 2026-27 towards healthcare and investment in capital upgrades.

He added: “Our goal is to deliver relief to those struggling to keep up, and we will deliver on that commitment.”

The Ministry of Youth, Social Development and Seniors has been budgeted $85.3 million, up by $1.45 million.

Seniors stand to benefit from the continuation of the Dementia Care Services Pilot Programme, along with “increased grants to residential homes and third-sector organisations serving seniors and disabled populations”.