Health insurance premiums continue to rise well above the rate of inflation, according to the latest figures.

The Consumer Price Index for April shows that, while prices across all sectors rose by just 1.9 percent since April 2013, the cost of health insurance “surged” by a massive 8.2 percent.

The vast majority of insurance policies are renewed each April, and The Royal Gazette understands that insurance firms were looking to increase contracts by around ten percent this year. Last year some companies were asked to up their payments by as much as 20 percent.

According to a statement provided by Government’s Department of Statistics, the Health and Personal Care sector “remained the largest contributor to the 12-month rate of price increase”.

“The annual increase in April 2014 measured 6.6 percent year over year, led by increased costs for health insurance premiums,” the statement said.

“The Health and personal Care sector had the largest impact on the CPI increase in April. The average cost of health insurance premiums surged 8.2 percent, leading to a 5.3 percent increase in the Health and Personal Care sector.”

The index also shows that, since 2006 the average price of goods and services has risen by 23.8 percent but health costs — including insurance — have shot up by almost 75 percent.

Bermuda Hospitals Board maintains that it has always strived to keep healthcare bills down, with the cost of medical procedures rising just one percent in the past year.

A BHB spokesman pointed out that, while the cost of a single procedure may remain fairly constant, increased usage could lead to an increase in insurance claims.

Nevertheless, Island insurance companies have reported strong profits recently. BF&M Ltd recorded a net income of $25.2 million for 2013 and noted that life and health policy benefits — cash paid out by the firm to cover claims — decreased by 21.7 percent to $83.8 million.

BF&M president and CEO John Wight last night defended the increases, saying that rates were adjusted in the first quarter of each financial year following BHB increases “in addition to new services offered, and changes in the frequency and severity of services provided locally and overseas”.

Mr Wight suggested that health services were not always delivered in the most cost-efficient way, while Government subsidies or certain treatments had been cut back, forcing premiums to rise.

And he also pointed out that hundreds of healthy, younger guest workers had let the Island in recent years whose contributions had helped offset the higher healthcare costs of Bermuda’s ageing population.

“While most of the trending for healthcare has been upwards, there are many employer groups in Bermuda who do receive minimal, no increase, or even a drop in rates annually if claims in a particular year or years are lower than the insurance company priced them to be,” Mr Wight said.

“Many employer groups are taking wellness programmes very seriously as premiums are generally lower for groups that are healthy and whose claims experience is good.

“The picture is not as doom and gloom as it might appear though. Local health insurers are working collaboratively together and with important stakeholders such as the Ministry of Health and the Environment, The Bermuda Health Council, and the Bermuda Hospitals Board, to make progress on what are very complicated issues with no easy answers.

“There are goals that we believe the Island can work towards.

“The broader conversation needs to be around how to reduce the cost of delivering care while improving the health outcomes of our community.

“Additionally, defining at the outset our goals for Bermuda’s healthcare sector and the measurable metrics indicating failure or success is critical.

“Bermuda is not unique to the rising cost of healthcare. Virtually every country in the world, albeit to differing levels, is grappling with the issue of medical costs being a major driver in the cost of living. In addition to the cost of healthcare, the larger question is one of value for money. What is the proper balance between accessibility and affordability?”