Carty’s 2022 warnings on SZV’s fragile finances echo in Cft’s latest concerns

GREAT BAY--The recent statement from the Committee for Financial Supervision (Cft) confirming that St. Maarten’s healthcare system is on an unsustainable course echoes concerns raised nearly two years ago by Social and Healthcare Insurance Executive Organization (SZV) Director Glen Carty. With Carty’s term ending next month, his analysis in 2022 now appears prescient, having outlined in detail the same structural weaknesses that the Cft is warning about today.

At a 2022 forum organized by BDO, Carty presented a financial picture that showed healthcare funds generating approximately 112 million guilders annually while expenditures stood at 147 million. This left a recurring annual deficit of roughly 35 million guilders, a gap that has since only grown wider. He emphasized that these figures did not even account for other liabilities such as pensions or wage losses, underscoring how deep the financial imbalance ran.

Carty also highlighted systemic challenges that had gone unaddressed for years. Compliance among local businesses was alarmingly low, with many failing to contribute or register properly. The demographic profile of insured persons had shifted significantly as well. In 2014, the average age of SZV patients was 38; by 2022, it had risen to 45. An aging population meant higher per-capita healthcare costs, particularly for those over 60, whose annual care expenses were more than three times higher than those under 60. By his estimation, SZV’s deficits at the time were already approaching 400 million guilders, and without major reform, the institution would be unable to pay its bills within six years.

He pointed out that unlike Curaçao, where the government is legally required to supplement healthcare deficits, Sint Maarten had provided no such support. Even during the COVID-19 crisis, SZV received no direct financial relief from either government or external partners. Carty warned that without a clear long-term vision, compounded by frequent political turnover, there was little chance of implementing the reforms needed to stabilize the system.

The Cft’s latest report reinforces many of these same issues. It notes that between 2010 and 2023, cumulative losses in the healthcare funds totaled around 500 million guilders. Annual shortfalls of 30 to 35 million continue to this day, temporarily offset only by surpluses in the old-age pension fund. However, those reserves are being depleted rapidly, with projections from the International Monetary Fund indicating they could run out by 2029.

The Cft attributes the crisis primarily to a structural imbalance between income and expenditure. Healthcare costs consistently exceed contributions, and with the population aging, demand for services continues to rise. The supervisory body has repeatedly urged Sint Maarten to finalize and implement a general health insurance system to widen the revenue base and improve cost controls. That legislation has now been in development for more than a decade without being enacted.

In addition, the Cft stressed that reforms already identified must be urgently implemented. These include measures such as expanding the use of generic medicines, strengthening family medicine clinics to reduce costly referrals abroad, and introducing mechanisms such as co-payments to share costs more equitably. It also criticized persistent delays in the national budget process, noting that the 2025 budget was approved more than six months late, undermining fiscal governance at a time when decisive planning is essential.

Both Carty’s 2022 warnings and the Cft’s 2025 conclusions re-enforces the reality that St. Maarten’s healthcare system is in crisis and requires immediate, coordinated reform. Without structural changes that address compliance, expenditure, and sustainable financing, the very foundation of the country’s social security and healthcare services risks collapse within the next decade or, as many predict, within the next five years.

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