Global Insight Perspective | |
Significance | Vietnam's voluntary health insurance scheme has been relaunched after having been suspended in late 2006 for those wanting to join the scheme, or for those whose membership had expired. |
Implications | The new scheme has significantly higher premiums than in the past, so that the Vietnam Social Insurance agency (VSI) can afford to attract new members. |
Outlook | Despite the hefty price increases, the future of the voluntary health insurance scheme is not secure, and the VSI has applied for additional funding and for stricter conditions on payouts. |
The suspension of the voluntary health insurance system by the Vietnam Social Insurance (VSI) agency had applied primarily to those wishing to join the scheme, as coverage for existing cardholders was maintained, reports the Thai News Service. That said, the policies of many existing cardholders expired on 31 March, and they were unable to renew them.
Under the basic pricing structure of the re-established system, urban residents will pay an annual premium of 280,000 dong (US$17.45), while rural residents will pay 200,000 dong. Students will be required to pay between 60,000-70,000 dong, regardless of their location. The new prices represent increases of 80,000 dong, 90,000 dong and 10,000 dong respectively over the previous system.
Pricing Details
A number of modifications to the basic pricing structure also apply, as follows:
- Cardholders have to pay a supplement of 20% of the total hospital fee, if their expenses for diagnosis and treatment exceed 100,000 dong.
- Cardholders need to have been members of the scheme for at least six months in order to qualify for high-tech medical services, and at least nine months to qualify for pre-natal care and delivery.
- For a family of three, the third member is entitled to a 10% reduction in insurance premiums. For a family of four, the two additional members get a 20% reduction. The discount rises to 30% discount if there are five or more family members.
- Households may choose to pay premiums every three, six or 12 months, while students have the option of paying once or twice for the duration of their course. Those who had been cardholders prior to the introduction of the new system will continue to be covered under the terms of the previous system, which had been determined in August 2005.
Outlook and Implications
The VSI had stopped issuing new cards because its funds had run out, after a dramatic increase in the number of cardholders had resulted in a large number of expensive claims (see Vietnam: 29 June 2006: Insurance Funds Lacking in Vietnam). In 2006, the number of people with medical insurance amounted to around 34 million, out of a population of 85 million. The total amount of money collected, including both voluntary and compulsory schemes, was 4,368 billion dong (US$272 million), of which 913 billion dong (US$56.9 million) came from voluntary schemes. A sum of 4,106 billion dong had been set aside to cover patient medical costs, but the VSI's costs for patient care amounted to 5,630 billion dong.
In order to ensure that the budgetary crisis does not repeat itself, the VSI has submitted a proposal to the Health and Finance ministries for an additional increase in premiums, while at the same time requesting the imposition of stricter conditions, particularly with regard to payments for chronic illnesses. In theory, premiums could also go down if the VSI has sufficient money in its coffers, although this scenario seems unlikely.
One way of keeping costs down would of course be the increased use of generic medicines. According to Ministry of Health (MoH) estimates, generics currently account for a 40% volume share of medicines used in hospitals. Only 25% of the generics used in hospitals are produced by local Vietnamese manufacturers, but expansion of the local generics market is hampered by quality control issues. The Vietnamese government is planning to introduce new quality control measures for generics, although there are fears that stricter controls would drive local companies out of business.