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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| Colombia: General System of Social Security in Health |
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Two different funding streams for insurance currently exist within the Colombian health system. The Contributive Regime (CR) relies on wage contributions for its sustainability. The Subsidized Regime (SR), however, relies on three distinct funding mechanisms. Read full sectionTwo different funding streams for insurance currently exist within the Colombian health system. The Contributive Regime (CR) relies on wage contributions for its sustainability. The Subsidized Regime (SR), however, relies on three distinct funding mechanisms. Under the CR, employees and the self-employed (informal workers above a set income threshold) pay 12.5% of their salaries to EPSs, which are then responsible for transferring the funds to FOSYGA. In turn, FOSYGA remits a UPC back to the EPS to cover the premium of the insured. The UPC initially adjusted risk based on three variables: age, gender, and geographic location. The premium and risk adjusters are modified yearly by the National Board of Health Social Security (CNSSS). By 2006 the board had introduced risk adjusters for End-Stage Renal Disease and other adjusters have been introduced since. When patients receive services, the EPS handles all payment transactions with the exception of copayments. From 2007 to 2008, CR revenues increased by 12.75%, which indicates an expansion of the CR and a move toward greater coverage. There are three primary funding mechanisms for the SR: 1) national transfers from general taxation providing for 48% of SR resources, 2) solidarity contributions from the CR that are transferred by FOSYGA providing for 40%, and 3) district and municipal efforts providing for 11% of SR funds. National transfers are pooled under the Subsidized Regime’s System of General Participation (SGP) which is responsible for allocating resources to the different districts and municipalities across the country. The solidarity contribution from the CR is transferred by FOSYGA directly to the municipalities. The municipality then transfers the UPC to an EPSS of the patient’s choosing. In 1997 there were over 200 EPSS, but by 2005 there were only 43 EPSS, of which 28% were private for profit, 16% were private not-for-profit, 14% were public, 36% were community based, and 6% were for indigenous populations. The subsidized regime UPC is approximately 60% of the contributing regime UPC, which is in line with the reduced number of services offered within the SR. As with EPSs, the EPSS is responsible for payment transactions with service providers for their members. Finally, supply-side subsidies to public hospitals/providers and public health programs are paid for by national transfers from general taxes. These funds flow into the SGP, which is then responsible for their disbursement. General System of Social Security in HealthFunding Primary Source of Funding: Payroll Tax
Secondary Source of Funding: General government revenues, Employer contributions
Contributing Populations: Formal Sector, Government Employees, Informal Sector
Types of Contributions: Premiums, Co-payments Two different funding streams for insurance currently exist within the Colombian health system. The Contributive Regime (CR) relies on wage contributions for its sustainability. The Subsidized Regime (SR), however, relies on three distinct funding mechanisms. Under the CR, employees and the self-employed (informal workers above a set income threshold) pay 12.5% of their salaries to EPSs, which are then responsible for transferring the funds to FOSYGA. In turn, FOSYGA remits a UPC back to the EPS to cover the premium of the insured. The UPC initially adjusted risk based on three variables: age, gender, and geographic location. The premium and risk adjusters are modified yearly by the National Board of Health Social Security (CNSSS). By 2006 the board had introduced risk adjusters for End-Stage Renal Disease and other adjusters have been introduced since. When patients receive services, the EPS handles all payment transactions with the exception of copayments. From 2007 to 2008, CR revenues increased by 12.75%, which indicates an expansion of the CR and a move toward greater coverage. There are three primary funding mechanisms for the SR: 1) national transfers from general taxation providing for 48% of SR resources, 2) solidarity contributions from the CR that are transferred by FOSYGA providing for 40%, and 3) district and municipal efforts providing for 11% of SR funds. National transfers are pooled under the Subsidized Regime’s System of General Participation (SGP) which is responsible for allocating resources to the different districts and municipalities across the country. The solidarity contribution from the CR is transferred by FOSYGA directly to the municipalities. The municipality then transfers the UPC to an EPSS of the patient’s choosing. In 1997 there were over 200 EPSS, but by 2005 there were only 43 EPSS, of which 28% were private for profit, 16% were private not-for-profit, 14% were public, 36% were community based, and 6% were for indigenous populations. The subsidized regime UPC is approximately 60% of the contributing regime UPC, which is in line with the reduced number of services offered within the SR. As with EPSs, the EPSS is responsible for payment transactions with service providers for their members. Finally, supply-side subsidies to public hospitals/providers and public health programs are paid for by national transfers from general taxes. These funds flow into the SGP, which is then responsible for their disbursement. |
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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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| 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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| Mexico: Seguro Popular |
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The SP is financed by the federal government, the state government, and enrollees. The federal and state governments fund a social solidarity contribution while enrolled families contribute a premium that is tied to income. Families in the two lowest income deciles and those in the third lowest decile with a child under five years of age are not required to contribute, conditional on their participation in health promotion activities. Annual family contributions range from $60 USD for families in the third lowest decile to $950 USD for families in the highest decile. Family premiums are collected at the state level, where they remain to be used to fund the essential benefits package. Read full sectionThe SP is financed by the federal government, the state government, and enrollees. The federal and state governments fund a social solidarity contribution while enrolled families contribute a premium that is tied to income. Families in the two lowest income deciles and those in the third lowest decile with a child under five years of age are not required to contribute, conditional on their participation in health promotion activities. Annual family contributions range from $60 USD for families in the third lowest decile to $950 USD for families in the highest decile. Family premiums are collected at the state level, where they remain to be used to fund the essential benefits package. Federal funding for the SP takes the form of two distinct contributions to the states—the social contribution and the solidarity contribution. The social contribution by the federal government is a fixed allocation per enrolled family and is periodically adjusted for inflation. The SP federal contribution comes from general taxes. The federal solidarity contribution is meant to redress the large differences in development between the states. It is 1.5 times the social contribution and is generally larger for poorer states. The solidarity contribution is based on a formula that considers a per family fixed component, a health-needs adjusted component, a component aimed at promoting additional state contributions, and a component based on health system performance. The goal of this resource transfer mechanism is to make up for historical imbalances and inequities, to respond to the needs of different population groups, and to provide incentives for performance and affiliation. The formula weights and the indicators used in the formula are updated annually. The state contribution is similar in all the states, equaling approximately half of the federal social contribution. The family contribution is determined on a sliding-scale, with the goal that no family should contribute more than a fair share based on its ability to pay. Ability to pay has been defined as disposable income, which is total household spending minus spending on food. The family contribution equals a fixed proportion of disposable income, with a maximum of 5%. Income deciles three through nine have a nominal contribution, while the tenth decile has two levels of contribution due to the variable nature of the income distribution. As of 2008, 97% of families made no premium contributions. Likewise, states have also failed to pay their full share of the premium.
The framework of the reform creates certain paradoxes in its implementation. The percentage of families that are eligible to enroll in SP varies by state. The population of the northern industrialized states tends to have high levels of social security membership, whereas the population of poor southern states tends to have low levels of social security membership. This means that poor states with weak tax-based incomes must enroll a much higher percentage of their population out of state coffers compared to rich states with stronger tax bases. This appears to perpetuate inequality in health care delivery on a geographical basis. Because poorer states have the largest proportion of both the poor and the uninsured, and because the state contributions to the SP are established on a per-enrolled family basis, poorer states have to make a higher contribution than wealthier states, leading to increased geographical inequity. Therefore, federal resources are based on both a per-enrolled family fee plus a solidarity supplement for poorer states to help mitigate some of the adverse budgetary effects that stem from a large population of poor households. The National Commission for Social Protection in Health (CNPSS) has established that states must target a maximum of 30% of their resources to purchase medications, 40% to contract personnel, and 20% for activities of health promotion, early detection, and prevention. Once the requirements for the transfer of resources have been met, funds are sent to the State Finances Secretariat. Before 2007, funds were transferred directly to the State Health Secretariats. The change was established due to the reporting requirements of the State Finance Secretariats, leading to increased transparency, as well as improving the registration and use of resources at the state level. Resources are transferred to the states every three months. Since 2004, resources transferred to the Social Health Protection System have increased by an average of 11.5% annually in real terms, thereby reducing the gap between IMSS health expenditures and the expenditures of the Ministry of Health.
From 2001 to 2003, the growth rate in per capita expenditures on public health for the uninsured population averaged 5.2%. Conversely, during the first few years of the reform from 2004 to 2006, this growth rate nearly doubled to 12.3% per year. From 2001 to 2006, public expenditure for the uninsured increased by 61% overall. Since the implementation of SP, public health expenditure increased from 43.8% of total health expenditure in 2002 to 46.4% in 2006. This trend of growing public health expenditures is expected to continue. Seguro PopularFunding Primary Source of Funding: General government revenues
Secondary Source of Funding: Member contributions
Contributing Populations: Informal Sector
Types of Contributions: Premiums The SP is financed by the federal government, the state government, and enrollees. The federal and state governments fund a social solidarity contribution while enrolled families contribute a premium that is tied to income. Families in the two lowest income deciles and those in the third lowest decile with a child under five years of age are not required to contribute, conditional on their participation in health promotion activities. Annual family contributions range from $60 USD for families in the third lowest decile to $950 USD for families in the highest decile. Family premiums are collected at the state level, where they remain to be used to fund the essential benefits package. Federal funding for the SP takes the form of two distinct contributions to the states—the social contribution and the solidarity contribution. The social contribution by the federal government is a fixed allocation per enrolled family and is periodically adjusted for inflation. The SP federal contribution comes from general taxes. The federal solidarity contribution is meant to redress the large differences in development between the states. It is 1.5 times the social contribution and is generally larger for poorer states. The solidarity contribution is based on a formula that considers a per family fixed component, a health-needs adjusted component, a component aimed at promoting additional state contributions, and a component based on health system performance. The goal of this resource transfer mechanism is to make up for historical imbalances and inequities, to respond to the needs of different population groups, and to provide incentives for performance and affiliation. The formula weights and the indicators used in the formula are updated annually. The state contribution is similar in all the states, equaling approximately half of the federal social contribution. The family contribution is determined on a sliding-scale, with the goal that no family should contribute more than a fair share based on its ability to pay. Ability to pay has been defined as disposable income, which is total household spending minus spending on food. The family contribution equals a fixed proportion of disposable income, with a maximum of 5%. Income deciles three through nine have a nominal contribution, while the tenth decile has two levels of contribution due to the variable nature of the income distribution. As of 2008, 97% of families made no premium contributions. Likewise, states have also failed to pay their full share of the premium.
The framework of the reform creates certain paradoxes in its implementation. The percentage of families that are eligible to enroll in SP varies by state. The population of the northern industrialized states tends to have high levels of social security membership, whereas the population of poor southern states tends to have low levels of social security membership. This means that poor states with weak tax-based incomes must enroll a much higher percentage of their population out of state coffers compared to rich states with stronger tax bases. This appears to perpetuate inequality in health care delivery on a geographical basis. Because poorer states have the largest proportion of both the poor and the uninsured, and because the state contributions to the SP are established on a per-enrolled family basis, poorer states have to make a higher contribution than wealthier states, leading to increased geographical inequity. Therefore, federal resources are based on both a per-enrolled family fee plus a solidarity supplement for poorer states to help mitigate some of the adverse budgetary effects that stem from a large population of poor households. The National Commission for Social Protection in Health (CNPSS) has established that states must target a maximum of 30% of their resources to purchase medications, 40% to contract personnel, and 20% for activities of health promotion, early detection, and prevention. Once the requirements for the transfer of resources have been met, funds are sent to the State Finances Secretariat. Before 2007, funds were transferred directly to the State Health Secretariats. The change was established due to the reporting requirements of the State Finance Secretariats, leading to increased transparency, as well as improving the registration and use of resources at the state level. Resources are transferred to the states every three months. Since 2004, resources transferred to the Social Health Protection System have increased by an average of 11.5% annually in real terms, thereby reducing the gap between IMSS health expenditures and the expenditures of the Ministry of Health.
From 2001 to 2003, the growth rate in per capita expenditures on public health for the uninsured population averaged 5.2%. Conversely, during the first few years of the reform from 2004 to 2006, this growth rate nearly doubled to 12.3% per year. From 2001 to 2006, public expenditure for the uninsured increased by 61% overall. Since the implementation of SP, public health expenditure increased from 43.8% of total health expenditure in 2002 to 46.4% in 2006. This trend of growing public health expenditures is expected to continue. |
