PHILIPSBURG–The healthcare funds managed by Social and Health Insurance SZV are losing approximately Cg. 35 million every year, and urgent measures are needed to prevent healthcare and pension reserves from being depleted within the next few years, according to the Committee for Financial Supervision (CFT).
The CFT warned that the situation poses a serious threat to St. Maarten’s public finances and could place the affordability of healthcare and pensions under significant pressure if corrective action is not taken.
According to the board, the healthcare funds currently operate at annual deficits of approximately Cg. 35 million. These losses have so far been absorbed through reserves from other social funds, primarily the AOV pension fund. However, the accumulated deficits have now reached approximately Cg. 500 million.
The CFT cautioned that these reserves are expected to be depleted within a few years if the current trend continues. “Until now, these deficits – which now amount to approximately CG 500 million – have been absorbed by means of reserves of the other funds, mainly of the pension fund AOV,” the board stated.
The board said it has repeatedly highlighted the seriousness of the situation and stressed that there is no longer time for delays. “The measures that St Maarten has identified, must be implemented,” the CFT stated.
One of the key measures identified by the country is the introduction of a General Health Insurance (GHI) system. According to the CFT, St Maarten expects the implementation of GHI to reduce the annual deficits within the healthcare funds.
The board said it is essential that the legislation required for the introduction of GHI be implemented by the latest target date of January 1, 2027.
In addition to GHI, the CFT said further measures will be needed to either increase revenue or reduce costs. Among the initiatives being pursued are the planned introduction of a tourist tax on January 1, 2027, and reforms to the tax system and tax administration aimed at improving tax collection and compliance.
The board noted that these measures could help provide funding to address social security deficits while also supporting other priority government expenditures.
The CFT also expressed concern about the country’s current financial position, stating that liquidity remains limited and risks remain high, particularly given ongoing geopolitical uncertainties. “The affordability of healthcare and pensions is at stake,” the board warned, adding that immediate action is required to safeguard the long-term sustainability of the country’s social security system.
Beyond the concerns surrounding SZV, the CFT said it also observes substantial risks to St Maarten’s public finances at several government-owned companies.
The board said now is the time for St Maarten to move forward with the reforms and measures already identified to address the growing financial challenges.
Source: The Daily Herald https://www.thedailyherald.sx/islands/szv-losing-cg-35m-a-year-cft-wants-action-to-protect-healthcare-pensions
