The Joint Learning Network for Universal Health Coverage systematically documents the reforms of its member countries and other countries that have expanded health coverage through demand-side financing. The case studies contained in these pages are brief, comparative and modular in nature, describing the key highlights and technical features of each program.
Compare various dimensions of country reform efforts using our interactive tool.
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| Vietnam: Compulsory and Voluntary Health Insurance Schemes |
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The central Vietnamese government is responsible for financing the bulk of the cost. Provincial governments, however, also contribute a smaller percentage of funds to the program. Poor beneficiaries do not pay premiums and are exempt from copayments. The entire cost of the scheme, 4.5% of minimum wage, is covered by revenues from the state budget. Read full sectionThe central Vietnamese government is responsible for financing the bulk of the cost. Provincial governments, however, also contribute a smaller percentage of funds to the program. Poor beneficiaries do not pay premiums and are exempt from copayments. The entire cost of the scheme, 4.5% of minimum wage, is covered by revenues from the state budget. Funding for Vietnam’s various universal coverage schemes varies greatly by population segment. The following presents an overview of each program’s financing: Compulsory program (CHI)
Note that when the insurance program was initially introduced, there was no cost sharing. In 1998, cost sharing was introduced, with a 20 percent coinsurance rate but no deductible. In 2005, the 20 percent coinsurance rate was eliminated, only to be reintroduced again since January 1, 2010. Copayment is exempted for some groups, such as people of merit. Compulsory and Voluntary Health Insurance SchemesFunding Primary Source of Funding: General government revenues
Secondary Source of Funding: None
Contributing Populations: Formal Sector
Types of Contributions: Premiums The central Vietnamese government is responsible for financing the bulk of the cost. Provincial governments, however, also contribute a smaller percentage of funds to the program. Poor beneficiaries do not pay premiums and are exempt from copayments. The entire cost of the scheme, 4.5% of minimum wage, is covered by revenues from the state budget. Funding for Vietnam’s various universal coverage schemes varies greatly by population segment. The following presents an overview of each program’s financing: Compulsory program (CHI)
Note that when the insurance program was initially introduced, there was no cost sharing. In 1998, cost sharing was introduced, with a 20 percent coinsurance rate but no deductible. In 2005, the 20 percent coinsurance rate was eliminated, only to be reintroduced again since January 1, 2010. Copayment is exempted for some groups, such as people of merit. |
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| Estonia: Estonian Health Insurance Fund |
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Estonian health care is funded through a Social Health Insurance regime where contributions are paid by salaried and self-employed workers, who contribute 13% of their wages to the system. The earmarked payroll tax is collected by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the EHIF. This system has a strong element of solidarity, as 46% of enrollees are non-contributing members and are subsidized by those who contribute. All enrollees are entitled to the same benefits package. Read full sectionEstonian health care is funded through a Social Health Insurance regime where contributions are paid by salaried and self-employed workers, who contribute 13% of their wages to the system. The earmarked payroll tax is collected by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the EHIF. This system has a strong element of solidarity, as 46% of enrollees are non-contributing members and are subsidized by those who contribute. All enrollees are entitled to the same benefits package. The Estonian Health Insurance Fund is the primary financing entity. It is responsible for pooling funds, contracting with service providers, reimbursing health services and pharmaceuticals, and reimbursing sick leave and maternity benefits. In 2006, approximately 20% of EHIF expenditures went toward cash benefits such as health related work incapacity compensation, as well as dental care and prescription reimbursements. In the same year, approximately 70% of expenditures went toward payment of services such as preventative and curative health and pharmaceuticals and medical devices. EHIF also funds disease prevention and health promotion programs. Funds are disbursed to the four regional EHIF offices on a per capita basis based on the number of insured in the region. The per capita payments for primary care are adjusted based on the age structure of the region, but payments for all other health services are not adjusted. Once the regional EHIF offices receive their funds, they have some flexibility in their allocation. This is especially useful, as the planning of health service provider contracts is conducted by the regional offices. The EHIF is liable for all of its obligations, so it cannot declare bankruptcy. However, if social health insurance revenues are lower than budgeted, the state becomes responsible for the shortfall. Also, if the government establishes prices such that the EHIF cannot meet its contractual obligations, then the state becomes responsible. In order to ensure solvency, the EHIF has a cash reserve to manage daily cash flows, a legal reserve to decrease the risk of macroeconomic changes, equivalent to 6% of the budget, and a risk reserve to ensure that health insurance obligations are met, equivalent to 2% of the budget. EHIF revenues have exceeded expenditures every year since the reforms except 1999, when an economic crisis significantly reduced revenues.
Out-of-Pocket payments have been the most rapidly increasing sources of financing, increasing from 7.5% of total health financing in 1995 to 24% in 2006. OOP payments flow mainly toward cost sharing for EHIF benefits, payments for services outside of the EHIF benefits package, payments to non-EHIF providers, and to informal payments. However, the primary reason for the increase in OOP has been the dual increase in pharmaceutical use and dental care expenditures that are not a part of the benefits package. Table 1: Share of Primary Sources of Health Care Financing (1995-2006)
Source: Ministry of Social Affairs, 1999-2006 There are no copayments for family doctor visits, but other services have small copayments. Prescription drugs normally have a deductible as well as a coinsurance of percentage. Flat small copayments are charged on family doctor home visits, outpatient care visits, and hospital bed days. There has been a gradual move toward an elimination of patient cost sharing for primary care. Outpatient specialist care has a maximum consultation fee, but providers can choose to charge any amount up to the maximum. Inpatient care providers can charge a per diem rate (maximum is set by EHIF) for up to ten days. However, inpatient child care, pregnancies, and emergency care are exempt from this per diem rate. Estonian Health Insurance FundFunding Primary Source of Funding: Payroll Tax
Secondary Source of Funding:
Contributing Populations: Formal Sector, Government Employees
Types of Contributions: Premiums, Co-payments Estonian health care is funded through a Social Health Insurance regime where contributions are paid by salaried and self-employed workers, who contribute 13% of their wages to the system. The earmarked payroll tax is collected by the Estonian Tax and Customs Board. The tax board then transfers the health contribution to the EHIF. This system has a strong element of solidarity, as 46% of enrollees are non-contributing members and are subsidized by those who contribute. All enrollees are entitled to the same benefits package. The Estonian Health Insurance Fund is the primary financing entity. It is responsible for pooling funds, contracting with service providers, reimbursing health services and pharmaceuticals, and reimbursing sick leave and maternity benefits. In 2006, approximately 20% of EHIF expenditures went toward cash benefits such as health related work incapacity compensation, as well as dental care and prescription reimbursements. In the same year, approximately 70% of expenditures went toward payment of services such as preventative and curative health and pharmaceuticals and medical devices. EHIF also funds disease prevention and health promotion programs. Funds are disbursed to the four regional EHIF offices on a per capita basis based on the number of insured in the region. The per capita payments for primary care are adjusted based on the age structure of the region, but payments for all other health services are not adjusted. Once the regional EHIF offices receive their funds, they have some flexibility in their allocation. This is especially useful, as the planning of health service provider contracts is conducted by the regional offices. The EHIF is liable for all of its obligations, so it cannot declare bankruptcy. However, if social health insurance revenues are lower than budgeted, the state becomes responsible for the shortfall. Also, if the government establishes prices such that the EHIF cannot meet its contractual obligations, then the state becomes responsible. In order to ensure solvency, the EHIF has a cash reserve to manage daily cash flows, a legal reserve to decrease the risk of macroeconomic changes, equivalent to 6% of the budget, and a risk reserve to ensure that health insurance obligations are met, equivalent to 2% of the budget. EHIF revenues have exceeded expenditures every year since the reforms except 1999, when an economic crisis significantly reduced revenues.
Out-of-Pocket payments have been the most rapidly increasing sources of financing, increasing from 7.5% of total health financing in 1995 to 24% in 2006. OOP payments flow mainly toward cost sharing for EHIF benefits, payments for services outside of the EHIF benefits package, payments to non-EHIF providers, and to informal payments. However, the primary reason for the increase in OOP has been the dual increase in pharmaceutical use and dental care expenditures that are not a part of the benefits package. Table 1: Share of Primary Sources of Health Care Financing (1995-2006)
Source: Ministry of Social Affairs, 1999-2006 There are no copayments for family doctor visits, but other services have small copayments. Prescription drugs normally have a deductible as well as a coinsurance of percentage. Flat small copayments are charged on family doctor home visits, outpatient care visits, and hospital bed days. There has been a gradual move toward an elimination of patient cost sharing for primary care. Outpatient specialist care has a maximum consultation fee, but providers can choose to charge any amount up to the maximum. Inpatient care providers can charge a per diem rate (maximum is set by EHIF) for up to ten days. However, inpatient child care, pregnancies, and emergency care are exempt from this per diem rate. |
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| Mali: Mutuelles |
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The intent of the social protection policy in Mali is to ensure fairness among the three systems in terms of the care that is covered, the government’s financial contribution, and the population, except of course for the indigent and retirees. The priority source for Mutuelle system resources will be membership dues. However, to boost the development of Mutuelles and to make coverage of the health risk universal for the majority of Malians in the interest of fairness, the government will make a financial contribution that aims to remedy the fact that the Mutuelle members have only a modest ability to contribute. This government contribution will be through a Mutuelle Support Fund. Read full sectionThe intent of the social protection policy in Mali is to ensure fairness among the three systems in terms of the care that is covered, the government’s financial contribution, and the population, except of course for the indigent and retirees. The priority source for Mutuelle system resources will be membership dues. However, to boost the development of Mutuelles and to make coverage of the health risk universal for the majority of Malians in the interest of fairness, the government will make a financial contribution that aims to remedy the fact that the Mutuelle members have only a modest ability to contribute. This government contribution will be through a Mutuelle Support Fund. Thus, the pilot phase will be funded from two sources: membership dues and the Mutuelle Support Fund financed by the government, the technical and financial partners, and the local and territorial governments. Membership dues will be used to pay expenses incurred at the community health center level. By contrast, the Support Fund will be used to pay for expenses in the referral facilities, which are the referring health centers and the hospitals, in order to fund investments made for implementing the strategy. Table 2: Financing planned under the social protection system in Mali, 2010
Source: Ministry of Social Protection The different members of the AMO thus pay the same membership dues (except for retirees), and the members and their beneficiaries are eligible for the same baskets of care. A trial period of six consecutive months after the right to benefits begins is mandatory, which is not the case for RAMED. RAMED provides the right to direct and full payment of the costs of care. The government’s contribution to funding RAMED is written into the finance law.Theoretically, the contribution from the territorial governments should also be included in their annual budgets. MutuellesFunding Primary Source of Funding: General government revenues
Secondary Source of Funding: Member contributions
Contributing Populations: Informal Sector
Types of Contributions: Premiums, Co-payments The intent of the social protection policy in Mali is to ensure fairness among the three systems in terms of the care that is covered, the government’s financial contribution, and the population, except of course for the indigent and retirees. The priority source for Mutuelle system resources will be membership dues. However, to boost the development of Mutuelles and to make coverage of the health risk universal for the majority of Malians in the interest of fairness, the government will make a financial contribution that aims to remedy the fact that the Mutuelle members have only a modest ability to contribute. This government contribution will be through a Mutuelle Support Fund. Thus, the pilot phase will be funded from two sources: membership dues and the Mutuelle Support Fund financed by the government, the technical and financial partners, and the local and territorial governments. Membership dues will be used to pay expenses incurred at the community health center level. By contrast, the Support Fund will be used to pay for expenses in the referral facilities, which are the referring health centers and the hospitals, in order to fund investments made for implementing the strategy. Table 2: Financing planned under the social protection system in Mali, 2010
Source: Ministry of Social Protection The different members of the AMO thus pay the same membership dues (except for retirees), and the members and their beneficiaries are eligible for the same baskets of care. A trial period of six consecutive months after the right to benefits begins is mandatory, which is not the case for RAMED. RAMED provides the right to direct and full payment of the costs of care. The government’s contribution to funding RAMED is written into the finance law.Theoretically, the contribution from the territorial governments should also be included in their annual budgets. |
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| Chile: National Health Fund (FONASA) |
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Monthly beneficiary contributions make up one third of FONASA funding, while half of FONASAs resources come from national coffers. The remainder is made up of operating income and copayments. FONASA is progressive in its funding mechanisms. Government subsidies are well targeted, with 90% directed to the indigent and 7.5% directed to low-income individuals. Furthermore, between 32% and 40% of high-income earner contributions cross-subsidize care for poorer beneficiaries. Read full sectionMonthly beneficiary contributions make up one third of FONASA funding, while half of FONASAs resources come from national coffers. The remainder is made up of operating income and copayments. FONASA is progressive in its funding mechanisms. Government subsidies are well targeted, with 90% directed to the indigent and 7.5% directed to low-income individuals. Furthermore, between 32% and 40% of high-income earner contributions cross-subsidize care for poorer beneficiaries. Primary health is free for all who enroll with FONASA. Hospital and ambulatory care under the Institutional Modality, however, require copayments that are determined by the income group in which the patient is classified. Group A (the indigent) and B (low income) receive free care, while group C pays 10% of the cost of the service and group D pays 20%. When enrollees undergo three family health events that require medical attention, those in groups D or C are transferred to groups C and B respectively. Catastrophic Insurance under FONASA is fully covered for patients who elect the Institutional Modality in accredited public hospitals. Furthermore, under the Free Election Modality, FONASA beneficiaries in groups B, C, and D can obtain a partial voucher from FONASA by making an out-of-packet payment for private health care from accredited providers. Resources for FONASA to cover the cost of the AUGE plan come from a temporary increase in the consumer tax from 18% to 19%, a tobacco tax, customs revenues, and the sale of the state’s minority shares in public health enterprises. The AUGE Plan only takes up 23% of the general budget set aside for service provision. AUGE services are free for those in categories A and B. Enrollees in categories C and D must in principle pay a copayment equal to 20% of the cost of the service. After a yearly copayment limit based on income is reached, 100% of services are covered for those in categories C and D. To date, however, copayments have seldom been collected. ISAPRE funding stems from the 7% monthly enrollee income contribution. Beneficiaries are also free to make additional contributions in order to purchase additional coverage. ISAPREs spend ten times more on per capita administration than FONASA, and despite the better health of its enrollees, they spend two times more on health care services per member. The average copayment under the ISAPREs was 35% in 2004. Although ISAPREs enrolled 22% of the population in 2004 they accounted for 43% of all health expenditures. Part of the reason for the higher expenditures is that ISAPREs rely almost exclusively on private providers that have higher cost and prices compared to public providers. These prices can be maintained because ISAPRE beneficiaries perceive the quality of private providers to be superior to the quality of public providers that are financed by FONASA. Figure 1 highlights the primary financial flows within the Chilean health system. The top half of the figure includes the resource flows for FONASA and the bottom half demonstrates resource flows for ISAPREs.
National Health Fund (FONASA)Funding Primary Source of Funding: General government revenues
Secondary Source of Funding: Payroll Tax, Member contributions
Contributing Populations: Formal Sector, Government Employees, Informal Sector
Types of Contributions: Premiums, Co-payments Monthly beneficiary contributions make up one third of FONASA funding, while half of FONASAs resources come from national coffers. The remainder is made up of operating income and copayments. FONASA is progressive in its funding mechanisms. Government subsidies are well targeted, with 90% directed to the indigent and 7.5% directed to low-income individuals. Furthermore, between 32% and 40% of high-income earner contributions cross-subsidize care for poorer beneficiaries. Primary health is free for all who enroll with FONASA. Hospital and ambulatory care under the Institutional Modality, however, require copayments that are determined by the income group in which the patient is classified. Group A (the indigent) and B (low income) receive free care, while group C pays 10% of the cost of the service and group D pays 20%. When enrollees undergo three family health events that require medical attention, those in groups D or C are transferred to groups C and B respectively. Catastrophic Insurance under FONASA is fully covered for patients who elect the Institutional Modality in accredited public hospitals. Furthermore, under the Free Election Modality, FONASA beneficiaries in groups B, C, and D can obtain a partial voucher from FONASA by making an out-of-packet payment for private health care from accredited providers. Resources for FONASA to cover the cost of the AUGE plan come from a temporary increase in the consumer tax from 18% to 19%, a tobacco tax, customs revenues, and the sale of the state’s minority shares in public health enterprises. The AUGE Plan only takes up 23% of the general budget set aside for service provision. AUGE services are free for those in categories A and B. Enrollees in categories C and D must in principle pay a copayment equal to 20% of the cost of the service. After a yearly copayment limit based on income is reached, 100% of services are covered for those in categories C and D. To date, however, copayments have seldom been collected. ISAPRE funding stems from the 7% monthly enrollee income contribution. Beneficiaries are also free to make additional contributions in order to purchase additional coverage. ISAPREs spend ten times more on per capita administration than FONASA, and despite the better health of its enrollees, they spend two times more on health care services per member. The average copayment under the ISAPREs was 35% in 2004. Although ISAPREs enrolled 22% of the population in 2004 they accounted for 43% of all health expenditures. Part of the reason for the higher expenditures is that ISAPREs rely almost exclusively on private providers that have higher cost and prices compared to public providers. These prices can be maintained because ISAPRE beneficiaries perceive the quality of private providers to be superior to the quality of public providers that are financed by FONASA. Figure 1 highlights the primary financial flows within the Chilean health system. The top half of the figure includes the resource flows for FONASA and the bottom half demonstrates resource flows for ISAPREs.
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| Korea, Rep.: National Health Insurance Program |
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The National Health Insurance Program (NHIP) has 3 sources of funding: monthly premium contributions from the insured and employers; government subsidies; and tobacco surcharges.The National Health Insurance Program (NHIP) has 3 sources of funding: monthly premium contributions from the insured and employers; government subsidies; and tobacco surcharges. Premium contributions are proportional to income and are shared equally between the insured individual and the employer. For the self-employed, premiums are calculated based on their income level in conjunction with the person’s property, motor vehicles, age and gender. There is a reduced contribution requirement for those who live on islands and remote areas and those serving in the military are exempt from paying premiums. Read full sectionThe National Health Insurance Program (NHIP) has 3 sources of funding: monthly premium contributions from the insured and employers; government subsidies; and tobacco surcharges.The National Health Insurance Program (NHIP) has 3 sources of funding: monthly premium contributions from the insured and employers; government subsidies; and tobacco surcharges. Premium contributions are proportional to income and are shared equally between the insured individual and the employer. For the self-employed, premiums are calculated based on their income level in conjunction with the person’s property, motor vehicles, age and gender. There is a reduced contribution requirement for those who live on islands and remote areas and those serving in the military are exempt from paying premiums. The National Government provides 14% of the total annual projected revenue of the NHIP. In addition, the government has a tobacco surcharge that contributes about 6% of the total annual projected revenue to the health insurance program. National Health Insurance ProgramFunding Primary Source of Funding: Payroll Tax
Secondary Source of Funding: General government revenues
Contributing Populations: Formal Sector, Informal Sector
Types of Contributions: Premiums, Co-payments The National Health Insurance Program (NHIP) has 3 sources of funding: monthly premium contributions from the insured and employers; government subsidies; and tobacco surcharges.The National Health Insurance Program (NHIP) has 3 sources of funding: monthly premium contributions from the insured and employers; government subsidies; and tobacco surcharges. Premium contributions are proportional to income and are shared equally between the insured individual and the employer. For the self-employed, premiums are calculated based on their income level in conjunction with the person’s property, motor vehicles, age and gender. There is a reduced contribution requirement for those who live on islands and remote areas and those serving in the military are exempt from paying premiums. The National Government provides 14% of the total annual projected revenue of the NHIP. In addition, the government has a tobacco surcharge that contributes about 6% of the total annual projected revenue to the health insurance program. |
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| Nigeria: National Health Insurance System |
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The National Health Insurance Scheme (NHIS) is funded primarily by contributions from members based on income. For the Formal Sector Social Health Insurance Program contributions are premiums that make up 15% of an individual’s basic salary, with the employer contributing 10% while the employee pays 5% for coverage of themselves, their spouse, and up to 4 children. An employer may negotiate with an HMO for coverage of additional supplementary benefits and pay the extra contributions required. Participants in the Informal Sector Program are expected to make a monthly contribution based on the benefits package of their choice as well as other factors. The poor, elderly, veterans, and disabled are exempted from paying membership premiums. Read full sectionThe National Health Insurance Scheme (NHIS) is funded primarily by contributions from members based on income. For the Formal Sector Social Health Insurance Program contributions are premiums that make up 15% of an individual’s basic salary, with the employer contributing 10% while the employee pays 5% for coverage of themselves, their spouse, and up to 4 children. An employer may negotiate with an HMO for coverage of additional supplementary benefits and pay the extra contributions required. Participants in the Informal Sector Program are expected to make a monthly contribution based on the benefits package of their choice as well as other factors. The poor, elderly, veterans, and disabled are exempted from paying membership premiums. The funding structure of the Nigerian health system draws on colonial origins, when services were financed primarily by the central government. Currently, allocations from general government revenue comprise about 26.1% of overall funding, 6.1% comes from private organizations and 1.8% from development partners. Household out of pocket expenditures remain the largest source of financing, providing about 55.9% of total revenue. National Health Insurance SystemFunding Primary Source of Funding: Employer contributions
Secondary Source of Funding: General government revenues, Member contributions
Contributing Populations: Formal Sector, Informal Sector
Types of Contributions: Premiums The National Health Insurance Scheme (NHIS) is funded primarily by contributions from members based on income. For the Formal Sector Social Health Insurance Program contributions are premiums that make up 15% of an individual’s basic salary, with the employer contributing 10% while the employee pays 5% for coverage of themselves, their spouse, and up to 4 children. An employer may negotiate with an HMO for coverage of additional supplementary benefits and pay the extra contributions required. Participants in the Informal Sector Program are expected to make a monthly contribution based on the benefits package of their choice as well as other factors. The poor, elderly, veterans, and disabled are exempted from paying membership premiums. The funding structure of the Nigerian health system draws on colonial origins, when services were financed primarily by the central government. Currently, allocations from general government revenue comprise about 26.1% of overall funding, 6.1% comes from private organizations and 1.8% from development partners. Household out of pocket expenditures remain the largest source of financing, providing about 55.9% of total revenue. |
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| Philippines: PhilHealth |
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Funding for the scheme varies based on the population covered, although the majority of funds flow from general taxation. Premiums for the formal sector are set by law to be up to 3% of monthly income. Premiums for both the poor and the informal sector are 1,200 pesos annually (about 25 USD). Read full sectionFunding for the scheme varies based on the population covered, although the majority of funds flow from general taxation. Premiums for the formal sector are set by law to be up to 3% of monthly income. Premiums for both the poor and the informal sector are 1,200 pesos annually (about 25 USD). However, the cost of insurance for the poor is fully subsidized by the central and local governments. Funding by population is as follows:
Both national and local governments are responsible for the full subsidy for indigents. A recent policy proposal is for the national government to fully pay the subsidy in order to accelerate the efforts towards universal coverage by enrolling the poorest. However, this proposal has not been approved and the current cost-sharing scheme remains. Currently, the local government identifies and determines who is poor, then enrolls them in the national health insurance program. Once enrolled, the national government is expected to pay its counterpart. The central government cost-sharing percentage depends on the income level of the local government, but on average local governments contribute 25% and the national government contributes 75%. All premiums are pooled nationally and in effect, there is cross-subsidization across districts. The frequency of premium contributions varies by each population category. For example, formal sector payroll collections naturally occur monthly, while for the non-poor, premium contributions occur based on when individuals seek to enroll. For OFWs, the premium is collected upon departure from the country and then on an annual basis. For the poor subsidized by the government, enrollment occurs annually and the local government pays quarterly while the national government is billed as soon as enough local governments have enrolled their poor. National government payment is dependent on the availability of funds. Premiums for formal sector are set by law to be up to 3% of the monthly income. However, the current level is 2.5%, applied up to the first 30,000 pesos of income (i.e., all people earning up to or more than 30,000 pesos pay the same premium, while people with salaries under 30,000 pesos pay less). The premium of 1,200 pesos annually for the poor and informal sector has been the same for more than 9 years. The rate for the OFWs was 900 pesos annually until two years ago when it was increased to 1,200 pesos. PhilHealthFunding Primary Source of Funding: General government revenues
Secondary Source of Funding: Member contributions
Contributing Populations: Formal Sector
Types of Contributions: Premiums Funding for the scheme varies based on the population covered, although the majority of funds flow from general taxation. Premiums for the formal sector are set by law to be up to 3% of monthly income. Premiums for both the poor and the informal sector are 1,200 pesos annually (about 25 USD). However, the cost of insurance for the poor is fully subsidized by the central and local governments. Funding by population is as follows:
Both national and local governments are responsible for the full subsidy for indigents. A recent policy proposal is for the national government to fully pay the subsidy in order to accelerate the efforts towards universal coverage by enrolling the poorest. However, this proposal has not been approved and the current cost-sharing scheme remains. Currently, the local government identifies and determines who is poor, then enrolls them in the national health insurance program. Once enrolled, the national government is expected to pay its counterpart. The central government cost-sharing percentage depends on the income level of the local government, but on average local governments contribute 25% and the national government contributes 75%. All premiums are pooled nationally and in effect, there is cross-subsidization across districts. The frequency of premium contributions varies by each population category. For example, formal sector payroll collections naturally occur monthly, while for the non-poor, premium contributions occur based on when individuals seek to enroll. For OFWs, the premium is collected upon departure from the country and then on an annual basis. For the poor subsidized by the government, enrollment occurs annually and the local government pays quarterly while the national government is billed as soon as enough local governments have enrolled their poor. National government payment is dependent on the availability of funds. Premiums for formal sector are set by law to be up to 3% of the monthly income. However, the current level is 2.5%, applied up to the first 30,000 pesos of income (i.e., all people earning up to or more than 30,000 pesos pay the same premium, while people with salaries under 30,000 pesos pay less). The premium of 1,200 pesos annually for the poor and informal sector has been the same for more than 9 years. The rate for the OFWs was 900 pesos annually until two years ago when it was increased to 1,200 pesos. |
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| India: Rajiv Aarogyasri |
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Aarogyasri is funded through general tax revenues generated by the state of Andhra Pradesh and the cost of premiums is fully subsidized for each beneficiary. Read full sectionAarogyasri is funded through general tax revenues generated by the state of Andhra Pradesh and the cost of premiums is fully subsidized for each beneficiary. The state chose to fully cover the cost of insurance premiums as the administrative costs of collecting the premium would outweigh the total cost of the premium itself. In addition, the state wanted to ensure that the benefits of the scheme reached the poorest, who might otherwise be deterred from enrolling even if the premium to be paid out-of-pocket was nominal. Rajiv AarogyasriFunding Primary Source of Funding: General government revenues
Secondary Source of Funding: None
Contributing Populations: None
Types of Contributions: None Aarogyasri is funded through general tax revenues generated by the state of Andhra Pradesh and the cost of premiums is fully subsidized for each beneficiary. The state chose to fully cover the cost of insurance premiums as the administrative costs of collecting the premium would outweigh the total cost of the premium itself. In addition, the state wanted to ensure that the benefits of the scheme reached the poorest, who might otherwise be deterred from enrolling even if the premium to be paid out-of-pocket was nominal. |
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| Brazil: Unified Health System (SUS) |
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Federal resources originating in a pool of value-added, general income, financial operations and insurance, export, and import taxes flow into the National Health Fund (NHF), which then funnels resources in five separate directions. First, the NHF transfers resources to both the State Health Funds (SHF) and the Municipal Health Funds (MHF), which are responsible for consolidating resources from the different sources. Second, the NHF transfers resources to public and private hospitals, public and private health care providers, and to special health programs such as the PSF. The same type of resource re-allocation occurs at both the state and municipal levels, with the following exceptions. (1) The State Health Fund only transfers resources to the Municipal Health Fund, and (2) the Municipal Health Fund does not transfer resources to any other administrative bodies. The Health Secretariats at both the State and Municipal levels oversee the administration of funds provided by the different sources. Read full sectionFederal resources originating in a pool of value-added, general income, financial operations and insurance, export, and import taxes flow into the National Health Fund (NHF), which then funnels resources in five separate directions. First, the NHF transfers resources to both the State Health Funds (SHF) and the Municipal Health Funds (MHF), which are responsible for consolidating resources from the different sources. Second, the NHF transfers resources to public and private hospitals, public and private health care providers, and to special health programs such as the PSF. The same type of resource re-allocation occurs at both the state and municipal levels, with the following exceptions. (1) The State Health Fund only transfers resources to the Municipal Health Fund, and (2) the Municipal Health Fund does not transfer resources to any other administrative bodies. The Health Secretariats at both the State and Municipal levels oversee the administration of funds provided by the different sources.
Funding of the SUS takes place through a variety of resource streams. In 2001, federal funds were transferred to municipalities through 78 different mechanisms and programs, which were linked to particular administrative requirements, as well as planning and control instruments. Some of these mechanisms pay for production, while others pay for coverage on a per capita basis. Individuals have argued that such a system could lead to high transaction costs. Indeed, a recent study found that in 2007, private insurance and commercial plans allocated 81% of their revenue for the payment of medical services, whereas the Ministry of Health allocated only 66% of its resources to such an end. There are five primary funding mechanisms through which the National Health Fund channels resources for services rendered under the SUS.
Between 1985 and 1996, federal financing for public health fell from 73% to 54% of public resources for health. Meanwhile, municipalities augmented their total share of national health costs from 9% to 28%, while states remained at 18%. During this same time period, looking at the responsibility for spending those resources, the federal share fell from 67% to 46%, while that of the municipalities increased from 10% to 35%. In other words, there has been a clear progression towards municipal responsibility for both the mobilization and utilization of resources. In 2001, a constitutional amendment declared that federal funds must be allocated in an amount equal to the prior year’s budget, adjusted for GNP, starting with the 1999 budget as a reference. Furthermore, the amendment stipulated that states and municipalities must increase their health spending until it reaches 12% of the state budget and 15% of the municipal budget. However, the amendment did not define what could and could not be considered an expense. Therefore, state and local governments began including expenses such as food stamps and care for prisoners that had previously been accounted for elsewhere. Thus it is difficult to ascertain which municipalities and states actually increased public health activities and attempted to improve the delivery of care. Funding for the Family Health Program (PSF) by the national government consisted of a flat, one-time transfer for establishing a new PSF team. Thereafter, variable transfers are meant to incentivize continuous expansion of coverage. Table II highlights the incentives in place for the expansion of the PSF in 2002. Table 1: Financial Incentives for the Family Health Program
Source: La Forgia, G. (This incentive model was in place during the first 10 years of the Family Health Program. It is no longer in use.) The Brazilian health system also has a sizable private health sector known as the Supplementary Health System (SHS). Since 1988, consumption of private health insurance has grown substantially— particularly among the middle class—with private spending rising faster than public spending. Income tax breaks that compensate for private expenses on health care account for some of this growth. Unified Health System (SUS)Funding Primary Source of Funding: General government revenues
Secondary Source of Funding:
Contributing Populations:
Types of Contributions: Federal resources originating in a pool of value-added, general income, financial operations and insurance, export, and import taxes flow into the National Health Fund (NHF), which then funnels resources in five separate directions. First, the NHF transfers resources to both the State Health Funds (SHF) and the Municipal Health Funds (MHF), which are responsible for consolidating resources from the different sources. Second, the NHF transfers resources to public and private hospitals, public and private health care providers, and to special health programs such as the PSF. The same type of resource re-allocation occurs at both the state and municipal levels, with the following exceptions. (1) The State Health Fund only transfers resources to the Municipal Health Fund, and (2) the Municipal Health Fund does not transfer resources to any other administrative bodies. The Health Secretariats at both the State and Municipal levels oversee the administration of funds provided by the different sources.
Funding of the SUS takes place through a variety of resource streams. In 2001, federal funds were transferred to municipalities through 78 different mechanisms and programs, which were linked to particular administrative requirements, as well as planning and control instruments. Some of these mechanisms pay for production, while others pay for coverage on a per capita basis. Individuals have argued that such a system could lead to high transaction costs. Indeed, a recent study found that in 2007, private insurance and commercial plans allocated 81% of their revenue for the payment of medical services, whereas the Ministry of Health allocated only 66% of its resources to such an end. There are five primary funding mechanisms through which the National Health Fund channels resources for services rendered under the SUS.
Between 1985 and 1996, federal financing for public health fell from 73% to 54% of public resources for health. Meanwhile, municipalities augmented their total share of national health costs from 9% to 28%, while states remained at 18%. During this same time period, looking at the responsibility for spending those resources, the federal share fell from 67% to 46%, while that of the municipalities increased from 10% to 35%. In other words, there has been a clear progression towards municipal responsibility for both the mobilization and utilization of resources. In 2001, a constitutional amendment declared that federal funds must be allocated in an amount equal to the prior year’s budget, adjusted for GNP, starting with the 1999 budget as a reference. Furthermore, the amendment stipulated that states and municipalities must increase their health spending until it reaches 12% of the state budget and 15% of the municipal budget. However, the amendment did not define what could and could not be considered an expense. Therefore, state and local governments began including expenses such as food stamps and care for prisoners that had previously been accounted for elsewhere. Thus it is difficult to ascertain which municipalities and states actually increased public health activities and attempted to improve the delivery of care. Funding for the Family Health Program (PSF) by the national government consisted of a flat, one-time transfer for establishing a new PSF team. Thereafter, variable transfers are meant to incentivize continuous expansion of coverage. Table II highlights the incentives in place for the expansion of the PSF in 2002. Table 1: Financial Incentives for the Family Health Program
Source: La Forgia, G. (This incentive model was in place during the first 10 years of the Family Health Program. It is no longer in use.) The Brazilian health system also has a sizable private health sector known as the Supplementary Health System (SHS). Since 1988, consumption of private health insurance has grown substantially— particularly among the middle class—with private spending rising faster than public spending. Income tax breaks that compensate for private expenses on health care account for some of this growth. |
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| Thailand: Universal Coverage Scheme |
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The Universal Coverage Scheme (UCS) is financed through general tax revenues paid to local contracting units on the basis of population size. The UCS reform raised public health spending from about 66.25 billion Baht in 2000-01 to 72.78 billion Baht in 2001-02. In recent years, the government has responded to criticisms claiming that UCS is underfinanced by raising the budget for the scheme. Read full sectionThe Universal Coverage Scheme (UCS) is financed through general tax revenues paid to local contracting units on the basis of population size. The UCS reform raised public health spending from about 66.25 billion Baht in 2000-01 to 72.78 billion Baht in 2001-02. In recent years, the government has responded to criticisms claiming that UCS is underfinanced by raising the budget for the scheme. General tax revenue was decided as the source of funding for the UCS because of the political urgency and focus on nationwide scale-up. The target population for the scheme is largely in the informal, agricultural sector and does do not have access to consistent cash income for any kind of regular premium payment, therefore making premium collection difficult. A copayment of Baht 30 was also implemented. This copayment was exempted for low income people, children below 12 years old and the elderly (i.e., those above 60 years old). While this copayment did not reflect the marginal cost of interventions, it did prevent overuse. The 30 Baht copayment was abolished in November 2006 for political reasons. However, abolition of the 30 Baht copayment had no effect on overall utilization of out-patient services. This is likely because the majority of beneficiaries have been already exempted from the copayment. The UCS reform raised public health spending from about 66.25 billion Baht in 2000-01 to 72.78 billion Baht in 2001-02. Thus, the reform cost US $175 million. The overall budget for UCS has increased to 82.02 billion (18%) and 91.36 billion (10%) in the years 2006 and 2007 respectively. Co-financing arrangements for the scheme are currently being considered—for example, one proposal suggests partial or non-subsidization of medical care costs for beneficiaries who decide to stay in a private room. Universal Coverage SchemeFunding Primary Source of Funding: General government revenues
Secondary Source of Funding: None
Contributing Populations:
Types of Contributions: None The Universal Coverage Scheme (UCS) is financed through general tax revenues paid to local contracting units on the basis of population size. The UCS reform raised public health spending from about 66.25 billion Baht in 2000-01 to 72.78 billion Baht in 2001-02. In recent years, the government has responded to criticisms claiming that UCS is underfinanced by raising the budget for the scheme. General tax revenue was decided as the source of funding for the UCS because of the political urgency and focus on nationwide scale-up. The target population for the scheme is largely in the informal, agricultural sector and does do not have access to consistent cash income for any kind of regular premium payment, therefore making premium collection difficult. A copayment of Baht 30 was also implemented. This copayment was exempted for low income people, children below 12 years old and the elderly (i.e., those above 60 years old). While this copayment did not reflect the marginal cost of interventions, it did prevent overuse. The 30 Baht copayment was abolished in November 2006 for political reasons. However, abolition of the 30 Baht copayment had no effect on overall utilization of out-patient services. This is likely because the majority of beneficiaries have been already exempted from the copayment. The UCS reform raised public health spending from about 66.25 billion Baht in 2000-01 to 72.78 billion Baht in 2001-02. Thus, the reform cost US $175 million. The overall budget for UCS has increased to 82.02 billion (18%) and 91.36 billion (10%) in the years 2006 and 2007 respectively. Co-financing arrangements for the scheme are currently being considered—for example, one proposal suggests partial or non-subsidization of medical care costs for beneficiaries who decide to stay in a private room. |
