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Tuesday, 14 March 2017

Spotlight on the Universal Healthcare Act

Key features of the Universal Healthcare Act were announced over the weekend at a workshop attended by Deputy Finance Minister Mohamed Maait, Health Minister Ahmed Rady and representatives of the World Bank and the French Development Agency. The ministries are finalizing the latest draft and are also working on the executive regulations. It is unclear when the draft will be ready, but Rady had suggested earlier this month that it will not be ready for the House of Representatives before June. While it appears that more needs to be done to iron out the bill, the broad strokes have been sketched:

The Universal Healthcare Act will see three authorities set up to manage the new state healthcare plan, said Maait. The Social Health Insurance Authority will be charged with funding the new healthcare system, while the Healthcare Authority will be in charge of managing healthcare services provided by the system. A third authority will be formed to ensure quality control at hospitals providing services under the act.

Who will benefit? Maait said that all Egyptians citizens will eligible for coverage and emphasized that the poor will be exempted from paying premiums. An earlier draft released last year suggested that individuals earning under EGP 250 per month and families with incomes of under EGP 300 per month would be exempt from paying into the state health insurance fund. The Medical Syndicate argued at the time that those earning below the minimum wage of EGP 1,200 per month must be exempt.

How will the state fund the new system? Employers and workers are expected to pay into the healthcare system, though there has been no update as of yet on the rates which have been set up for that. It had been previously reported that premiums for employers are expected to be the equivalent of 3% of each employee’s salary, while employees would be responsible for a 1% tithe. The three authorities will apparently be allowed to invest some of their funds and use the proceeds to fund the system. A portion of the sin tax on cigarettes will also be used to fund the program, Al Mal quotes Maait as saying.

Rolling out the act: The new system will be rolled out in phases nationwide by 2030, Rady told the House Health Committee. The readiness and quality of state hospitals will be the criteria in determining which governorates adopt the system and when, he added. The system will be introduced first to Port Said, as state hospitals are nearly six months away from meeting the quality criteria mandated by the act. Cairo will be the last governorate to follow suit, he said.

What we haven’t yet heard: The government hasn’t spoken for some time now on the private sector’s role in the new healthcare system. Previous reports had suggested that the private sector would be welcome to provide services and that the sector would remain open to FDI. It is unclear as of yet whether private sector hospitals and insurers would be part of the system or run parallel to it. We haven’t heard any update on whether a uniform pricing mechanism for state and private hospitals is still on the table or whether that has been scrapped. Finally, we don’t know what the proposed system will cost: Prime Minister Sherif Ismail had said early in 2016 that government will spend EGP 90-100 bn on the new universal healthcare system. This will undoubtedly rise significantly following the float, and is one of the reasons why expenditures on the FY2017-18 budget have surpassed EGP 1.1 tn. The Finance Ministry plans to complete its actuarial study on the act this month.

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