National health insurance scheme

Contribution

Similar to other Insurance schemes, it involves saving and depositing money with an insurance company such that when one is sick, they can receive health services without picking money from their pockets. It will be implemented in an integrated approach through social and private community based health insurance schemes.

According to the Bill, civil servants and formally employed Ugandans will be required to annually contribute 4% of their annual salary. Employers will top up with 1% to make 5%. The contribution will be split into monthly contributions towards the scheme. According to the plan, each individual above the age of 18 years shall be required to remit a certain amount of money to the National Health insurance scheme and acquire an insurance card. People in informal employed aka farmers, business people, and peasants will be required to contribute.

No specific amount has been set says Sarah Byakika, the Commissioner Planning, Financing and Policy at the Health Ministry .

“It shall depend on one’s earnings,” she says. But the common figure being talked about is Shs100,000 annually and Byakika’s uncertainty shows that details of the proposal are still being formed. It is also obvious that people in formal employment offer the easiest catchment cohort.

The government also hopes that through this scheme, it will be able to mobilise funds to subsidise the cost of provision of healthcare services to promote social protection. The plan is to start with small insurance packages covering malaria and hypertension among others, according to Byakika.

“The scheme is very important because a healthy life is not always guaranteed and people need to be prepared for when they fall sick such that they don’t hustle to find money for health care,” she says.

The cost of the proposed insurance is far less than what individuals on private health insurance schemes currently pay. According to information in the health insurance sector, every individual remits averagely Shs600,000 annually.

However, most people see the government scheme as quite expensive – because they are low income earners.

Byakika explains that vulnerable people and indigents shall be exempted from the insurance contribution but still benefit. Among the vulnerable people are poor orphans, people with disability, street children, and individuals above 18 years of age but still studying and the unemployed among others.

Beneficiaries

Byakika says for every contributor, a spouse and children below 18 years will access the defined benefit packages irrespective of the amount of contribution. A wife and husband working in the formal sector will have to contribute to the scheme individually.

She adds that vulnerable people and indigents will benefit on the contributors they are staying with.

However, she says individuals without the national insurance card will not access health services since they are going to phase out free medication in all their hospitals once the Bill becomes law.

In other words, Byakika says, individuals currently subscribing to private insurance companies will have to drop that scheme and enroll on the government scheme.

“Once the law has been enacted, all Ugandans will be required to contribute to the government scheme since private insurers failed to take off. They are only covering individuals in the formal sector,” she says.

Ibrahim Kaddunabbi Lubega, the Chief Executive Officer (CEO) Insurance Regulatory Authority, does not like that. He says people already on a private insurance should not be compelled to join the national insurance scheme.

“The idea is good only that it lacks professional advice. This scheme should not be taken as a tax, an additional obligation that someone is incurring for the services that he is not even going to consume,” he says.

Most people are not excited about the insurance scheme because they do not expect services in government hospitals to improve. This is partly because, for the scheme to succeed, the government needs to pump more money into the sector to improve infrastructure, human and financial resources. Otherwise the country will remain with one district hospital serving 500,000 and one regional referral hospital serving two million people. The health facilities will have few on no medical personnel and hospital drug stores will remain empty. Most people will continue going to private facilities.

The government has been doing its best. In FY 2012/13 the health sector received Shs852 billion and Shs940 billion in 2013/14). That was about 7.2% of the national budget of Shs13.1 trillion. In 2014/2015, the health budget was 9% of the total national budget and in 2015/2016 it was 8.2%. All the allocations have been far less than the agreed 15% of the national budget pledged by the government as a State Party to the Abuja Declaration. In total, according to statistics from Ministry of Health, the government only contributes 15 % of the cost of health services in the country. Up to 42% is covered by donors. Individuals meanwhile cover 41% of expenditure on health services. This leaves only 2% of medical expenditure covered by health insurance.

Despite these grim statistics, any national health insurance scheme will lead to a surge in hospital visits by patients.

That is why critics of the proposed government scheme say, by going after people in formal employment, it is going after the wrong target. This crowd already either has private insurance or it can pay out of pocket for services. The government scheme should, therefore, target the poorest people and the most vulnerable.

It should also be piloted and rolled out gradually as has happened in Tanzania, Ghana, Rwanda, Nigeria, and Senegal. Nigeria started an insurance program in 2005 and now covers about 3 million people, Tanzania 5% and Rwanda, where the social scheme is co-managed by facilities–community partnerships with promotion from local governments, covers more than 70% of its population. Uganda could learn from them.

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