Spiralling healthcare costs will drive up inflation, with commercial businesses forced to pass on the cost of rising overheads to the consumer and charities facing fundraising pressures, it has been warned.

Danielle Riviere, the chief executive of the Bermuda Chamber of Commerce, said that members were reporting insurance hikes of more than 30 per cent.

The BCC raised concerns after a charity revealed last month that its insurance bill was set to increase by 23 per cent.

Fiona Rodriguez-Roberts, of the Kaleidoscope Arts Foundation, said that staff would have a cut in their take-home pay because of an increase in health insurance deductions.

Ms Riviere agreed that increases were well above the rate of inflation — but that other factors such as an ageing population were driving up costs.

She said: “The majority of businesses will be impacted by the health insurance increases. Our members have indicated that this increase is significant for most, affecting their financial stability.

“Although we haven't received specific details on how businesses will manage the added expense, with the already high cost of doing business, it's likely that some will raise their prices, while others may even have to contemplate closing.”

The Ministry of Heath has said that the government-controlled portion of the insurance premium, the Standard Premium Rate, had remained unchanged for the past three years, and that its goal of implementing universal health coverage would help to drive down health costs.

Ms Riviere added that companies could only absorb cost increases to a certain degree before inevitably passing them on to the consumer.

She said: “The increase went into affect on July 1 but insurance companies have been engaging with their clients for several months.

“Members have advised me of ranges from 15 to 32 per cent increases. Very few if any businesses will not get an increase. I assume that it is with all insurers.

“That is a widespread but that’s because there are so many variables. It can depend on the age of the workforce in any company, so if you have older staff then insurance is going to be more expensive.

“Every household has seen their costs rise in the past few years and it’s the same for businesses. We know that the bubble will burst and those costs are going to have to be passed on to the customer.

“Unfortunately we’re in the perfect position for this to happen because of two factors — a significantly ageing population and inflation.

“We could predict the ageing population, but who could have predicted inflation? Who could have predicted Covid?”

Charities are facing the same problem according to one source, with above-inflation rises in health insurance eating into charity revenues.

Nicola Paugh, the executive director of the Non-profit Alliance of Bermuda — an umbrella organisation that supports scores of island charities — said members’ revenues were being squeezed by general cost-of-living pressures, including higher-than-inflation insurance premiums.

Dr Paugh said that the group health insurance scheme co-ordinated for the third sector had been hit with a 15 per cent increase in health insurance premiums — well above the 10 per cent Consumer Price Index increase of the past three years.

But Dr Paugh added: “I believe this is a fair increase that is reflective of the economic conditions of the day.

“It is not surprising that health insurance costs are rising, because all costs are rising, and Bermuda — following global trends — is facing added pressures on the healthcare system.”

Dr Paugh said that the 10 per cent CPI increase in the past three years was “a clear indicator of what we all know and are experiencing — that the cost of living in Bermuda has been increasing”.

She said: “These costs impact individuals, households and businesses, including health insurers as well as the charitable sector. This adds pressure to an already expensive healthcare system.”

Dr Paugh said that the island suffered from higher-than-average rates of cancer, diabetes, kidney disease and obesity compared with other jurisdictions — and that preventive care was not always accessed by some groups in the community.

She added: “On top of this, we have an ageing population, which will cause healthcare costs to rise further.

“Businesses, including those functioning as non-profits and registered charities, should probably be planning for more expensive health insurance costs, until we understand the impacts of universal healthcare.

“It is also important that adequate notice of premium increases is provided to help organisations prepare for adjustments, especially non-profits.”