Few pinpricks for UAE citizens on health-care costs

According to the FTA, cosmetic procedures and other elective treatments will be subject to VAT, except those prescribed by a medical professional for treating or preventing a medical condition. Some treatments need to be further clarified in terms of the effects VAT will have. For example, a breast-cancer patient who requests reconstruction will be subject to the 5 percent VAT because implants are considered non-essential and cosmetic.

Whilst some experts anticipate a slight inflation across sectors due to the VAT, in health care, the cost of medical visits and treatment alone is not expected to rise significantly. Rather, medical costs are climbing due to the over-prescription and overuse of medicines, patients who “window-shop” for specialists, and the high cost of research and technology. Additionally, with the introduction of the VAT, experts foresee that health insurance premiums will be impacted.

This is because some insurance premium cover wellness services, alternative medicines, and therapies, such as acupuncture, naturopathy, reflexology, Chinese medicine, etc, which are not considered essential to ensure one’s health, making them subject to VAT.

The following are a few tips to help individuals successfully navigate the early days of VAT:

* If you are planning to have a specific procedure done, ask your doctor and medical facility’s cashier whether the procedure falls entirely within a medical and clinical work frame, or whether a part of it will end up being subject to VAT. For example, this could be the case with a rhinoplasty procedure (a cosmetic procedure), with an end purpose to correct a sinus problem (such as a deviated nasal septum), as well as to change the nose aesthetically.

* Ask your insurance company if the cost of your premiums and/or benefits will change.

* Pay attention to your receipts. Expect to see new lines printed on them. These will show whether an item you bought from the pharmacy is subject to VAT or not. In the initial phases of rolling out VAT, anticipate that there may be some grey areas with regards to whether items such as wellness devices and wearables and supplements will be subject to VAT.

* While most of the regulations are set, except that the taxation system will evolve over time, as is natural to any new system.

For a medical provider, the implications are slightly different. While healthcare remains zero-rated for medical providers too, goods and services used to run daily operations such as cleaning services, utilities, etc. will be subject to VAT.

However, medical providers can claim the VAT back. This means that they need to account for VAT even if it will be claimed back. In order to achieve this, the majority of providers need to have IT systems to help accurate book-keeping, organize cash flows and execute and process VAT.

Furthermore, providers, who outsource to laboratories and pharmaceutical factories, will likely have to incur the 5 percent tax on other supplies and services. For those who are not already invested in infrastructure, significant costs like IT and the accounting system set up might have to be passed on to the consumers.

The conclusion — higher costs for health-care providers, potentially making it more difficult to attract new providers and probably eliminating some smaller clinics for whom the costs become disproportionate and lead a more mature market.

For large hospitals and medical providers who may have international headquarters and are subject to VAT in other markets, the UAE’s VAT only means consolidating the business cash influx and managing the contracts locally. For local SMEs in the health-care sector, they need to equip themselves with skilled staff that understands VAT, and the technology to support the tax system.

Although many people will be impacted by VAT, the 5 percent is not as significant as in other countries, such as the UK, where VAT ranges from 17.5-20 percent. In the long term, it will reinject investment back into UAE infrastructure and yield positive returns with accuracy and efficiency in documentation and increased regulation of payments.

It’s no mystery that health care turns into a larger challenge for most of us as we get older. More ailments are possible to broaden, because of this extra cash spent to go to health professionals and buy medicine. Even in case you continue to be healthy thru your later years, the fees for preventative care and preparing for capacity unexpected fitness situations are growing.

Health-related costs will probably be considered one of the largest components of your retirement budget. You need to be prepared to pay for comprehensive insurance coverage and potential out-of-pocket fees for care. Here are three strategies that will help you manage this vital price in retirement.

Understand how Medicare works

The right information for Americans age 65 and older is that you qualify for Medicare. That makes extended dependence on fitness care services greater low cost. At age 65, the general public automatically qualifies for Medicare Part A without charge, which in general presents insurance for sanatorium stays and skilled nursing care. Medicare Part B needs to be bought (about $109 in line with the month in 2017 for most retirees). Part B covers the expenses of visiting a physician, however with some deductibles. Many humans buy extra insurance to use for out-of-pocket prices, together with a Part D prescription drug plan or a Medicare Supplement coverage.

With Medicare, timing is crucial. Signing up while you first qualify for coverage will preserve prices at the lowest degree. If you keep insurance thru your company after turning sixty-five, you could postpone Medicare enrollment without risking past due penalties.

If you retire prior to age 65, you’ll want to buy insurance on the open market to cowl health-associated expenses until you become eligible for Medicare. Individual insurance has a tendency to get more high priced as you grow older, so paintings the price into your retirement price range. Some employers offer retiree medical insurance as an advantage. Check together with your human assets department to peer if this feature is available to you.

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