His Highness Sheikh Mohammed bin Zayed Al-Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, announced on Wednesday the waiver of the 20 per cent co-pay for all private medical treatment provided in Abu Dhabi to UAE Nationals under their Thiqa health insurance plan. This decision reverses the 20 per cent co-pay requirement that was initially imposed on 1 July 2016. Prior to the implementation of the 1 July co-pay requirement, Thiqa patients received full coverage for health services at both private and public hospitals in Abu Dhabi.

The imposition co-pay requirements for all health services to Thiqa patients provided at private facilities in Abu Dhabi was part of sweeping health insurance changes imposed on 1 July 2016. In addition to the co-pay, the per cent of costs covered for treatment received by Thiqa patients outside of the emirate was also reduced. Healthcare facilities that did not collect the co-payment risked termination of their contracts with Daman.

We understand that the intent of the co-pay and reduced cost coverage was to steer Thiqa patients to governmental hospitals and help limit unnecessary and excessive use of healthcare services and, consequently, decrease healthcare costs in the emirate. It quickly became apparent, however, that the co-pay was detrimentally affecting the neediest, such as those who can only receive long-term care through a private facility, where co-pays can be over AED 40,000 per month. Consequently, the first waiver was granted, effective 23rd January 2017, for Thiqa patients receiving private home health services and treatment at long-term care facilities. This waiver was, however, not retroactive.

Implementation of a further waiver, which was announced on 26 April 2017, provides full relief from the 1 July co-pay requirement across all private healthcare services provided to Thiqa members in Abu Dhabi. While the waiver has been granted to Thiqa card holders, the previous changes to coverage for individuals under Daman's Abu Dhabi Basic Plan insurance will remain.

This expanded waiver comes as a welcomed announcement in the industry as the decision further opens the doors to investors who, due to the co-pay, had seen investment in private healthcare offerings in Abu Dhabi to be a less attractive opportunity than previously. The attractiveness of such investments will increase UAE National and ex-pat patient choice and access to a greater range of healthcare providers and additional services that may not be available in public facilities.

We understand that the Health Authority - Abu Dhabi has welcomed the announcement and that the development of a medical city, as recently announced by His Highness, will further enable them to attract investment in healthcare and to ensure that the correct specialties are available to meet the current and future demand for healthcare services.

In addition to this welcomed announcement, we understand that changes to the existing restrictions on foreign ownership of property in Abu Dhabi are being considered and, if implemented, these changes should make investing in healthcare in Abu Dhabi a more attractive opportunity.

By creating more opportunities for the provision of innovative healthcare services, the government of Abu Dhabi is helping to ensure that the capacity is developed to meet the growing demand for healthcare services in Abu Dhabi.

Following this announcement, investors and operators in healthcare should re-examine their strategic plans and re-consider their opportunities in Abu Dhabi. Al Tamimi will continue to be a source of reference to the Health Authority - Abu Dhabi and the UAE healthcare industry.

Christina Sochacki
Senior Associate,
Corporate Commercial / Healthcare
<a href="mailto:c.sochacki@tamimi.com">c.sochacki@tamimi.com</a>