Proposing three options to increase health insurance premiums

The Ministry of Health has proposed a roadmap to increase health insurance (HI) contributions by increasing the contribution rate from 2025 to reach a maximum of 6% of basic salary or monthly salary by 2035.

The current health insurance contribution rate is determined by the percentage of monthly salary used to calculate social insurance contributions, pensions, unemployment benefits or basic salary depending on the participating group, currently 4.5% and maximum 6%.

The Ministry of Health is seeking comments on the draft revised Law on Health Insurance. In the Law Policy Impact Assessment Report, the Ministry said that the above contribution level is not commensurate with the level of benefits. Meanwhile, the total expenditure of the Health Insurance Fund is always higher year after year and the need to expand the scope of payment is increasing. In the coming years, the Fund will increase expenditure due to the implementation of calculating the full price of medical services, while the law does not have a mechanism and roadmap to gradually increase the contribution level.

Working hours of medical staff at Children's Hospital 2 (HCMC), July 2023. Photo: Nhu Quynh — Working hours of medical staff at Children's Hospital 2 (HCMC), July 2023. Photo: *Nhu Quynh*

Based on the above reality, the Ministry of Health proposes three options to gradually increase the contribution level to suit the scope of health insurance benefits and the medical examination and treatment needs of participants.

Option one : Keep the current maximum contribution rate of 6% but include a roadmap for increasing the contribution rate in the revised law. Specifically, from January 1, 2025, the contribution rate will increase to 5.1% of the employee's monthly salary for social insurance contributions, unemployment benefits or basic salary, depending on the participating group. From January 1, 2035, the contribution rate will increase to 6% of the employee's monthly salary.

According to the Ministry of Health, this plan helps increase the Health Insurance Fund, medical facilities have more funding, increase people's rights to medical examination and treatment, access to services as well as treatment effectiveness.

However, this roadmap also increases spending on the state budget, businesses, households and workers. According to statistics from the Vietnam Social Security in 2021, with the current contribution rate equal to 4.5% of the base salary, the budget is spending nearly 42,300 billion VND. Increasing the contribution rate to 5.1%, the state budget spends an additional 5,700 billion VND per year and nearly 14,100 billion VND if the health insurance contribution rate increases to 6%.

For businesses, health insurance contributions in 2021 will reach VND29,200 billion. If the contribution rate increases to 5.1% of the employee's monthly salary, businesses will pay an additional nearly VND3,900 billion and increase by more than VND9,730 billion if the contribution rate is 6%.

Option two , the maximum contribution rate is kept at 6% as in the current law but the roadmap increases at a higher rate. Specifically, from January 1, 2025, the contribution rate increases to 5.4% of the employee's monthly salary, unemployment benefits or basic salary, depending on the participating group. From January 1, 2035, the contribution rate increases to 6%.

Similar to the first option, this roadmap also increases the costs of the state budget, businesses, workers and households. Specifically, if the contribution rate increases to 5.4% in 2025, the state budget will spend an additional nearly 8,500 billion VND; businesses will spend more than 5,840 billion VND; workers will spend 2,920 billion VND more and households will spend nearly 4,870 billion VND more.

Option three maintains the current regulation of the maximum contribution rate of 6%, without taking into account the roadmap for increase, but assigns the Government to regulate when necessary. This option does not increase social costs, but it is difficult for the Government to decide when to increase because the law does not stipulate. Medical facilities face a cost burden in the context of increasing number of people using health insurance, the Health Insurance Fund may lose its revenue and expenditure balance.

People receive medical examination and treatment at the Ho Chi Minh City Orthopedic Hospital at the end of 2022. Photo: Nhu Quynh — People receive medical examination and treatment at the Ho Chi Minh City Orthopedic Hospital at the end of 2022. Photo: *Nhu Quynh*

After assessing the pros and cons, the Ministry of Health chose option three because it would not increase expenditure from the state budget, enterprises, or support for workers' relatives. The increase roadmap like the first two options will be considered in the next general revision of the Law on Health Insurance when socio-economic conditions and research time are sufficient.

The revised Law on Health Insurance is expected to be submitted to the National Assembly at the May 2024 session and take effect from January 1, 2025. By the end of 2023, the country will have nearly 93.7 million people participating in health insurance, covering over 93% of the population. Vietnam aims to cover over 95% of the population with health insurance by 2025.

Phuong Ha

Source link