Comprehensive Health Insurance Scheme
Law No 2/2018 promulgating the Law on the Comprehensive Health Insurance Scheme
Parliament has recently approved a new law covering health insurance (Law No 2/2018). The law is an update from more populist system which had been in place since the 1960s. It is important not only for its benefactors, but for business owners; the law imposes new obligations on them when it comes to financial contributions.
The law aims to protect the rights of less fortunate members of society – and a close study of its provisions shows whether or not it actually fulfills this aim.
The application of the law, or the building of different hospitals and clinics, will take place over six phases, starting in 2018 and ending in 2032. It will start with five governorates, including Suez and Port Said, and will end with Cairo and Giza. However, the funding provisions will be applicable from 2018 onward.
The legislation can be divided into three main sections:
- Proposed plans: the law proposes the creation of three different bodies which will uphold the system
- Funding of these plans: how these bodies will be funded
- Sanctions: the fines that would be imposed should individuals or businesses fail to abide with the new law
Three new bodies
The new health insurance law will be imposed through the creation of three bodies aimed to fund, build, and supervise the scheme.
The first of these bodies is the General Authority for Comprehensive Health Insurance. This authority is to have its own legal personality, acting under the supervision of the Prime Minister. Its headquarters will be in Cairo, with different offices around Egypt. The main aim of this body is the collection of the premiums from citizens, and to invest this money safely, using returns to finance the two other bodies.
The second body is the General Authority for Health Care. This authority is predicted to bring a tangible change to health care in Egypt, by providing three levels of health care through health units, hospitals, and hospitals specialized in heart diseases and tumors. The health units will provide eight services: family health, dentistry, pharmacy, pediatrics, obstetrics, gynecology, emergency, laboratory, and radiology. It will be responsible for building new hospitals, establishing bodies to manage existing health care providers, and providing the medicines and medical tools necessary. In fact, an electronic file for every family, with a sub-file for each member, will be created and kept with the doctor and health unit assigned to them. The file will include their medical history, their doctors’ visits, and any medication they are using.
Finally, the third body, The General Authority for Accreditation and Supervision, will be responsible for setting the standards for the quality of health units and hospitals, as well as accrediting the establishments that abide to these standards. This will include carrying out routine inspections of the establishments. The body will also be responsible for cooperating and coordinating with similar bodies abroad.
Funding
As mentioned above, the new system will be financed in a number of ways.
Employees will pay a percentage of their income towards their insurance and that of their spouse and children. This is explained in the annex to the law, and will depend on the number of children the working father has.
Business owners will now have to add an additional 4 percent to their social insurance subscription.
Again, the General Authority for Comprehensive Health Insurance will invest money in order to use the returns for the benefit of the system.
Other contributions will come from higher taxes on cigarettes, extra charges on birth, death, marriage, and divorce certificates, higher car licensing fees, and higher tolls when passing through different governorates
Moreover, all companies and establishments are to contribute 0.25 percent of their gross yearly revenue, non-deductible from their taxes.
Article 44 explains that this part of the plan will be reviewed every four years by experts in the field.
Article 52 ensures that this will allocate each body an independent budget in order to be able to fulfill their obligations.
Sanctions
Article 43 stipulates that an additional annual amount will be imposed on individuals who are late in making their payments.
Article 62 imposes a penalty of no less than six months jail time and/or a fine between 2,000 EGP and 100,000 EGP for anyone who gives incorrect statements regarding duties to be paid under this law.
Article 65 adds that a penalty of no less than six months jail time and a fine between 100,000 EGP and 200,000 EGP will be imposed on any employee of any of the authorities who shall assist participants in not paying their shares.
New Obligations on Employers
While the new law can be praised for proposing a true, positive change to Egypt’s current health care system, its means of funding can be of concern.
When it comes to individuals, citizens previously had to contribute only 1 percent of their monthly income, which has now risen incrementally depending on their marital status. Notably, this can be justified by arguing that a better system will undoubtedly require higher funding.
However, the rate imposed on businesses can be criticized as well. While 0.25 percent may seem unsubstantial, it is questionable why this percentage is to come out of the gross revenue of companies and not their net revenue. This risks impairing businesses from growing, especially small businesses, which may make more losses than gains in the first few months of their operation. If the law is aimed at protecting less fortunate individuals, it should also account for less fortunate businesses and allow them to grow. Moreover, the 0.25 percentage is not deductible from taxes, whereas any contributions to charity usually are. This may even discourage small businesses from duly registering their employees, which is harmful to both the employees and the system as a whole.
All in all, the law truly is one to praise and encourage; Egypt will have a more comprehensive, accessible, and modern healthcare system by the year 2032. For that reason, while we are enthusiastic about the new law and the changes it will bring to healthcare in Egypt, but it could be made fairer after a few technical amendments concerning the funding of the system.
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