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.
| Program | Primary source of funding | Secondary source of funding | Contributing Populations | Types of Contributions | Funding |
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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. |
| 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. |
| 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. |
| 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. |
