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Tuesday, 19 December 2017

Universal Healthcare Act passes the House

LEGISLATION WATCH- The House of Representatives passed yesterday the Universal Healthcare Act, the government’s EGP 600 bn health coverage plan and a key piece of social policy for the Ismail cabinet. A plenary session of the House on Monday completed voting on the bill, which largely remained intact. Debate had centered on Article 40, which outlines how the state health insurance scheme would be financed, Al Borsa reports.

MPs also shortened the timeline for rolling out the system nationwide to 11-13 years from 15 year, starting with the Canal cities and Sinai, said Finance Minister Amr El Garhy, who attended the debates in the House along with Vice Minister of Finance Mohamed Maait. The bill is expected to be signed into law and published on the Official Gazette early in 2018, El Garhy added. The minister hinted the implementation phase would begin in July, at the start of the 2018-19 fiscal year.

In addition to setting up three regulators to manage and monitor the new system, key highlights of the bill include:

  • Cost to business, part I: The bill will set premiums for employers of 4% of each employee’s monthly salary. Employees will pay premiums of only 1% of their salary into the system. An employee will have to pay a premium of 3% of his or her salary to cover an unemployed spouse and 1% for each child.
  • Cost to business, part II: All companies, whether private or public and regardless of size, will have to pay a 0.25% tax on their sales revenues to help fund the system. This had been lowered from 0.5% and from what hearing from the press, it would appear that this tax would replace reported tithes on construction materials.
  • Healthcare industry tax: Hospitals and clinics will pay a tax of EGP 1,000 for every bed they have. Healthcare sector operators will also have to pay between EGP 1,000 and EGP 15,000 in fees to become part of the health system, Al Mal reports.
  • Exemptions: The state will pay EGP 200 bn to cover those exempt for paying premiums based on their income levels. The state will pay the equivalent of 5% of the standard minimum wage to cover healthcare for each person who cannot afford to pay a premium into the system. The government will decide criteria for exemption, Al Mal reports.
  • Additional fees and taxes: The law imposes fees on issuing and renewing drivers licenses ranging from EGP 20 to EGP 300. The law also sets a toll fee on highways. An EGP 0.75% sin tax all cigarette packs sold and a 10% tax on all other tobacco products has been mandated. A 5% fee on hospital stay will also be imposed.

What to watch for:

  • A constitutional challenge to the law’s governorate-by-governorate rollout, which was openly questioned during debate earlier this year on the bill.
  • We’re also not sure how the debate on what seems to be an EGP 10 bn annual deficit in the proposed system was resolved.

 

Corrected on 11 July 2019- The tithe paid by businesses towards the new system was corrected to 0.25% of revenues from 0.0025%. 

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