NHIP double coverage, financing dilemma
The head of Jamaica’s largest insurance conglomerate and dominant provider of healthcare coverage wants clarity on how the plan for universal health insurance will affect persons already covered.
That number spans about 500,000 people in a population of more than 2.7 million. The insured includes family members of working Jamaicans who are insured through their employers, whether the government or private sector companies, as well as disease-specific coverage under the National Health Fund, NHF.
Sagicor Group Jamaica controls 67 per cent of the life and health insurance market, according to President & CEO Christopher Zacca, who himself initially led the task force that was convened to design a National Health Insurance Plan for Jamaicans.
His request for clarity on how the universal plan will evolve adds to rising concern among sector interests in the tobacco and other industries that are to face new taxes to fund NHIP.
How NHIP will affect the private insurance market’s group health and other business is still a question to be fully determined, but the Green Paper contemplates their inclusion in the programme through contracted services.
Minister of Health Dr Christopher Tufton, while cautioning that the tax measures are at this stage still just proposals to be signed-off on by Cabinet, said the different concerns would be addressed during consultations that are to be led by economist Dr Wesley Hughes. Those discussions will also seek to answer the question about outsourcing, the health minister told the Financial Gleaner.
The committee that developed the NHIP programme outline, which formed the basis of a green paper tabled in Parliament, was led by economist Dr Damien King, and now Hughes will anchor the next leg of marshalling public comment, Tufton said.
Hughes, who is a former head of the Planning Institute of Jamaica and was most recently the CEO of the oil-financed PetroCaribe Development Fund, said Wednesday that he is yet to be formally appointed to the role and was due to meet shortly with Tufton in that regard, when asked about his terms of reference.
The Green Paper tabled by Tufton proposes a compulsory health insurance plan that would offer equal benefits for contributors to NHIP scheme regardless of income. The consultations that will ensue will be used to refine the document into a White Paper around which legislation will be drafted.
Public health spending is currently estimated at 3.47 per cent of GDP, but the government wants to increase that to 6 per cent.
The Proposed non-contributory funding sources for NHIP are:
Auto registry solidarity health levy $9.47 billion
Remittances solidarity levy $5.50 billion
Obesity Levy (sugar tax) $5.04 billion
Excise tax $4.63 billion
Medical marijuana levy $3.75 billion
Tourist health levy $3.63 billion
NHT beneficiaries $1.53 billion
Gaming and lotteries levy $1.24 billion
Mobile phone data levy $0.94 billion
Motor vehicle insurance levy $0.84 billion
Foreign workers permit increase $0.63 billion
Initial registration fee $0.41 billion
The required funding for NHIP is estimated at $30 billion to $33 billion annually, at 85 per cent enrolment or 2.3 million Jamaicans, which leaves a shortfall of $18.5 billion. The shortfall is broken down as $16.2 billion to supplement annual health care costs, and $2.3 billion is to flow to a reserve fund, annually.
Payment for the programme
The proposed sources of funding are employee contributions or premiums and industry taxes.
The health ministry is hoping to get public buy-in for a tax on sugar, which has been identified as a key contributor to the prevalence of non-communicable diseases. The Green Paper also floats the idea of a vehicle levy, citing the high public cost borne by the State for treating victims of vehicular accidents; an excise tax focusing on cancer caused by tobacco and alcohol; a gaming and lottery levy supporting programmes for mental illness and substance abuse; a tax on remittances; and a sales tax on legal medical marijuana.
Cigarette distributor Carreras, which is already heavily taxed, said it was still reviewing the Green Paper and would not comment immediately on its implications.
However, from estimates presented in the NHIP paper, the bulk of the funding is proposed to flow from a new motor vehicle levy, a sugar tax, individual contributions and taxes already being directed into the National Health Fund which is around $5.5 billion.
In terms of individual contributions, one scenario proposed the rate of $992 monthly payable by 192,300 informal sector workers, raising $2.3 billion; plus collections at the same rate from 212,600 formal sector workers, raising around $4.3 billion. To this would be added $792 monthly for additional dependants, ranging up to $1,983 monthly for three or more dependants.
Tufton told the Financial Gleaner that rates to be charged and estimates of revenue to be raised were still being reviewed by Cabinet and were not final.
“We are not yet at point of considering funding,” the Minister said. “Dr Wesley Hughes will lead the national discussion and out of that will come the final approach.”
Those consultations are expected to extend to the end of the fiscal year in March 2020, he said.
Sagicor head Zacca, speaking as a panellist at a Caribbean Policy Research Institute forum on NHIP, said there was need for clarity on whether the universal scheme would layer additional costs unto persons who are already insured.
“ … We must also consider – Who will pay? How much will they pay? For how long? Will persons covered with private insurers and paying out of pocket be expected to contribute to the NHIP? How will we strike that balance so that the core set of taxpayers do not pay double to a health plan?,” Zacca asked.
As for the broad programme, he said health insurance coverage for all Jamaicans was a step in the right direction, while commending the progress made on NHIP to date.
“Now it is just a matter of accelerating and ensuring the system is effective and efficient,” he said.
Last year, Sagicor Life disbursed some $536 million to public hospitals in health claims. Critical challenges to be addressed, Zacca said, include long wait times, dysfunctional equipment, no equipment and inadequate staffing.