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Wednesday, 6 December 2017

House Health Committee signs off on Universal Healthcare Act, system expected to run a EGP 10 bn annual deficit

LEGISLATION WATCH- House Health Committee approves Universal Healthcare Act: The House of Representatives’ Health Committee signed off on the Universal Healthcare Act yesterday and referred it to the general assembly to pencil it in for a vote, Al Shorouk reports. The decision came after a hearing on the bill’s budget and financing, where Vice Minister of Finance Mohamed Maait explained that the EGP 588 bn per year healthcare system under the Universal Healthcare will run a deficit of around EGP 10 bn, as the math currently suggests the system will pull in about EGP 577 bn annually from a variety of sources.

Where does the deficit come from? The system will cost c. EGP 588 bn a year to run, of which EGP 292 bn will come from citizen-paid premiums, Mait said, according to AMAY. Those premiums become our responsibility: The government has previously said businesses will have to remit a sum equivalent to 3% of each employee’s salary, while employees would be responsible for a 1% tithe.

Where’s the rest of the funding coming from? The state will extend EGP 125 bn from its general budget to cover those unable to pay premiums, while EGP 51 bn will come from sin taxes on tobacco, licensing fees from the healthcare sector, and a tax on the sale of construction materials such as cement and steel (which were chosen for their excessive pollution). EGP 109 bn will come from “additional revenues,” the official said. He added that the deficit will be covered by “emergency funding provided to the healthcare system from the state budget. We had previously heard though that regulatory bodies managing the system will be allowed to invest funds from premiums and fees and use the returns to fund the system.”

Despite the EGP 10 bn deficit, the House Health Committee had been pushing the Finance Ministry to lower premiums, Al Borsa reports. The government reportedly agreed at the hearing to lower the premium required to cover a third child in any one family from 1.5% of the breadwinner’s salary to 1%, committee member Heitham Al Hariri said. The law had stipulated that families will pay premiums of 1% on the first and second child, but would pay 1.5% on all subsequent children (presumably to encourage birth control). The government had also agreed to lower additional fees the law imposes on hospital stays. To compensate for the reduction in premiums, the committee voted in favor of using proceeds from a hike in the fees for issuing and renewing drivers licenses, as well as proceeds from a 0.5% tax imposed on construction materials for healthcare.

The committee agreed to amendments that would lower registration fees for pharmacies and private clinics to a range of EGP 1,000-10,000, from EGP 3,000-15,000 previously, under the new act. This came after the Pharmacists Syndicate said it rejected the proposed bill, joining the Medical Syndicate in its opposition, Al Mal reports. Their primary point of contention it seems were the licensing fees the bill imposes on establishing new pharmacies. They also objected to not being consulted on drafting the act in a memo they sent to Ittihadiya.

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