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Egyptian Government Considers Various Strategies in Health Insurance Overhaul, Faces Criticism from Advocacy Organisation
Summary
After news that public discussion of Egypt's health ministry draft bill to offer universal health cover is to be delayed by a year owing to funding shortfalls, the government is considering other strategies to improve healthcare access.
Article
IHS Global Insight Perspective | |
Significance | The Egyptian government is mulling various strategies to improve health cover in the country amid confirmation that the passage of the draft guaranteeing universal coverage has been delayed owing to funding shortages. The strategies include a new cigarette tax and increased regulations on the private healthcare sector. Meanwhile, a decree that sought to limit the number of diseases covered by the state-funded health insurance scheme has been revoked after a public backlash. |
Implications | The patient advocacy group that criticised the limiting of indications under the national insurance has cheered the withdrawal, while directing the government to hasten implementation of the health reform. Meanwhile, neither the cigarette tax nor new laws to improve private health cover are a surprise considering previously announced pipeline government initiatives to use tobacco tax and private health insurance to provide universal healthcare. |
Outlook | Irrespective of government decisions to improve health cover in the long run, the insufficiency of funds to implement any health insurance law means that health cover will become more expensive in the near term, and possibly lead to reduced healthcare access. |
Egypt Mulls Various Healthcare Cover Strategies
Over the last two months, the Egyptian government has been considering various strategies to boost health insurance coverage in the country. These are as follows:
- Hatem El-Gabaly, the Egyptian health minister, announced a decree that would limit state-funded healthcare for six illnesses, namely—oncology, cardiovascular, diabetes, high blood pressure, renal failure, and hepatitis C, reports Al-Ahram.
- The finance minister is also considering a new cigarette tax to improve health insurance services for 78 million of Egypt's low-income population, with over 20% of this number living on less than US$1.
- The government is also planning to increase regulations in the private sector to improve coverage. While details on these laws are not available, the first law is set to regulate the establishment of small microfinance that will be able to offer insurance, be backed by bigger insurance firms, and take risk on a smaller basis. The other law will increase the purview of the Egyptian Financial Supervisory Authority (EFSA), which will regulate both risk-taking health maintenance organisations and third-party administrators.
Under Fire from Patient Advocacy Organisation
El-Gabaly's decree has received criticism from advocacy group Egyptian Initiative for Personal Rights (EIPR), causing the ministry to withdraw it. According to the EIPR, restricting state coverage to merely six diseases may achieve universal coverage; however, this would be in "name only". They have also urged the health ministry to reveal and discuss the complete details of the draft healthcare bill. EIPR's press release on this can be found here.
Outlook and Implications
As indicated previously, the laws discussed above are an effort by the Egyptian government to expand health insurance cover and achieve universal health insurance, as has been promised since 2005. Currently only 50% are covered by some sort of health insurance. The above strategies are likely to have emerged as a result of the health ministry's decision to delay submitting the draft of the health insurance law to the parliament and for public consultation owing to budgetary shortfalls (see Egypt: 25 March 2010: Egyptian MoH to Delay Discussions on Controversial Healthcare Law). In March, the health ministry announced that it would need 17 billion Egyptian pounds (US$3 billion) to implement the first stage. In contrast, the country's healthcare spending stands at 10 billion pounds. This shortfall is already set to see premiums for those under state-funded care double in 2010.
Meanwhile, the cigarette tax does not bode well for tobacco firms. While the draft already calls for tax garnered from tobacco companies to be used to fund the expansion of health cover, any additional tax (either on the customer or the manufacturer) would further dent their bottomlines. However, the development is in line with policies unveiled in other Middle East and North African states, such as Saudi Arabia, where higher premiums for smokers thereby deter the habit.
Increasing the regulations for private firms also comes as no surprise, with the ruling National Democratic Party (NDP) reportedly also looking towards privatisation as part of its health insurance reform (see Egypt: 5 March 2009: Egypt's Ruling Party Looks to Privatisation to Offer Universal Health Insurance).
? ? ? ? ? ? E N D O F S E C T I O N ? ? ? ? ? ?
niversal health cover is to be delayed by a year owing to funding shortfalls, the government is considering other strategies to improve healthcare access.IHS Global Insight Perspective | |
Significance | The Egyptian government is mulling various strategies to improve health cover in the country amid confirmation that the passage of the draft guaranteeing universal coverage has been delayed owing to funding shortages. The strategies include a new cigarette tax and increased regulations on the private healthcare sector. Meanwhile, a decree that sought to limit the number of diseases covered by the state-funded health insurance scheme has been revoked after a public backlash. |
Implications | The patient advocacy group that criticised the limiting of indications under the national insurance has cheered the withdrawal, while directing the government to hasten implementation of the health reform. Meanwhile, neither the cigarette tax nor new laws to improve private health cover are a surprise considering previously announced pipeline government initiatives to use tobacco tax and private health insurance to provide universal healthcare. |
Outlook | Irrespective of government decisions to improve health cover in the long run, the insufficiency of funds to implement any health insurance law means that health cover will become more expensive in the near term, and possibly lead to reduced healthcare access. |
Egypt Mulls Various Healthcare Cover Strategies
Over the last two months, the Egyptian government has been considering various strategies to boost health insurance coverage in the country. These are as follows:
- Hatem El-Gabaly, the Egyptian health minister, announced a decree that would limit state-funded healthcare for six illnesses, namely—oncology, cardiovascular, diabetes, high blood pressure, renal failure, and hepatitis C, reports Al-Ahram.
- The finance minister is also considering a new cigarette tax to improve health insurance services for 78 million of Egypt's low-income population, with over 20% of this number living on less than US$1.
- The government is also planning to increase regulations in the private sector to improve coverage. While details on these laws are not available, the first law is set to regulate the establishment of small microfinance that will be able to offer insurance, be backed by bigger insurance firms, and take risk on a smaller basis. The other law will increase the purview of the Egyptian Financial Supervisory Authority (EFSA), which will regulate both risk-taking health maintenance organisations and third-party administrators.
Under Fire from Patient Advocacy Organisation
El-Gabaly's decree has received criticism from advocacy group Egyptian Initiative for Personal Rights (EIPR), causing the ministry to withdraw it. According to the EIPR, restricting state coverage to merely six diseases may achieve universal coverage; however, this would be in "name only". They have also urged the health ministry to reveal and discuss the complete details of the draft healthcare bill. EIPR's press release on this can be found here.
Outlook and Implications
As indicated previously, the laws discussed above are an effort by the Egyptian government to expand health insurance cover and achieve universal health insurance, as has been promised since 2005. Currently only 50% are covered by some sort of health insurance. The above strategies are likely to have emerged as a result of the health ministry's decision to delay submitting the draft of the health insurance law to the parliament and for public consultation owing to budgetary shortfalls (see Egypt: 25 March 2010: Egyptian MoH to Delay Discussions on Controversial Healthcare Law). In March, the health ministry announced that it would need 17 billion Egyptian pounds (US$3 billion) to implement the first stage. In contrast, the country's healthcare spending stands at 10 billion pounds. This shortfall is already set to see premiums for those under state-funded care double in 2010.
Meanwhile, the cigarette tax does not bode well for tobacco firms. While the draft already calls for tax garnered from tobacco companies to be used to fund the expansion of health cover, any additional tax (either on the customer or the manufacturer) would further dent their bottomlines. However, the development is in line with policies unveiled in other Middle East and North African states, such as Saudi Arabia, where higher premiums for smokers thereby deter the habit.
Increasing the regulations for private firms also comes as no surprise, with the ruling National Democratic Party (NDP) reportedly also looking towards privatisation as part of its health insurance reform (see Egypt: 5 March 2009: Egypt's Ruling Party Looks to Privatisation to Offer Universal Health Insurance).