Health Insurance Policy in Vietnam

THE CHANGE OF HEALTH INSURANCE POLICIES IN VIETNAM

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1. Five stages of Healt insurance development in Vietnam

The first stage is from 8/1992 to 8/1998. At the early first stage, the health insurance was targeted at employees who work for stated-owned enterprises and pensioners. Then they continued expanded health insurance for employees working for enterprises which have more than 10 workers.

The second stage is from 8/1998 to 5/2005. Obligated health insurance was required for all employees no matter working for non-stated or having less than 10 workers enterprises. Besides that, the government offered free health insurance for meritorious people and people who receive the monthly social welfare allowance. For example: People who joined in the revolution before 1945, heroic Vietnamese mothers, heroes of People’s Armed Forces, Hero of Labor in the period of resistance; relatives of people with meritorious services to the revolution include biological fathers, natural mothers, spouses, children (natural children, adopted children), people who have merits to raise martyrs and Elderly people in poor households have no children or relatives who take care…These people got free health insurance from the government. At the second stage, the co-payment rate was introduced, 5% co-payment rate for free health insurance and 20% for others.

The third stages was from 5/2005 to 7/2009. Decree 63/2005/ND-CP on 16/5/2005 gave rise to expansions in eligibility for both the compulsory and voluntary schemes and revision of the benefit package and co-payment mechanism. Poor people were transitioned from the “Health care fund for poor people” to the compulsory scheme, with their premiums fully funded by the government. Besides that, to minimise the risk of adverse selection, at least 10% of students/people in a school/commune were required to participate in the voluntary scheme.

The fourth stage was from 7/2009 to 6/2014. The first Health Insurance Law (No. 25/2008/QH12, approved by the National Assembly), was released on 14th November 2008 and became effective on 1st July 2009. This Law marked the start of the fourth stage of social health insurance development. The Health Insurance Law comprehensively changed social health insurance policy by expanding coverage to 25 insurance categories with poor people and children under 6 included within the compulsory scheme, with premiums fully subsidised by the government.

The fifth stage began from 7/2014 when the Health Insurance Law was amended through Law No.46/2014/QH13 to reclassify the eligibility categories, eliminate the voluntary scheme, and schedule premium increases. The household category required all household members not eligible for any other social health insurance scheme to enrol together and pay the combined premium. The objective of the household scheme is to maximise coverage and prevent adverse selection. However, even though health insurance had been regulated to be compulsory. The underlying problem is that enrolment still relies on a voluntary mechanism. The goverment has not had any measures to enforce or identify people who have not enrolled or droped out.

The Health Insurance policies have changed in premium over time. At the first stage, the premium of compulsory insurance is 3% of payroll tax in which 2% was paid by employers and 1% was paid by employees. The premium for pensioners was deducted 10% from pensions. From second stage, the premium for pensioner’s insurance was 3% of pension. From 2010, the premium for mandatory group increased by 1.5% ( from 3% to 4.5% of pay rolls). The premiums of free insurance and voluntary one were calculated from base salary. Due to the change of the base salary, the premiums have increased by the time. However, the government had policies to subsidize for protected groups such as poor, near-poor, students/pupils or farmers….(See in table 2). For example, at the fourth stage, the near-poors were subsidized by 50%, while the pupils and students were subsidized 30% of the price. However, from 2014 the near- poors only need to pay 30% premium and the farmers were deducted 70% price of insurance. These policies had a target to encourage vulnerable people in society to join in health insurance.

2. The change in Health Insurance scheme after Revised Health Insurance Law in 2014

From 7/2014, there is no voluntary health insurance. The insured people can be classified into five groups depending on the sources of contributions.( See in table 3) In which, the second group will get free health insurance from the government. The fourth group does not really pay for premium because their insurance is paid by the social insurance fund. One point to note, retirees mentioned in the fourth group do not include all people at retirement age but only people who are eligible to receive pension. ( Usually, they paid social insurance in 20 years).

According to the Revised Health Insurance Law, from 2014, the co-payment rate for inpatient treatment without the referral was reduced by 10% in provincial and central hospitals ( 40% and 60% respectively, compared with 50% and 70% before). At the district hospital, the co-payment rate was reduced from 30% to 0%. And from 2021, inpatient services will be covered fully by Health insurance at district and provincial hospitals. The purpose of these policies is to encourage people to use health services at district and provincial levels and to reduce overcrowding in central hospitals. (see inTable 4)

By contrast, the outpatient services were not covered by Health insurance in every level of health facilities from 2014. Health insurance schemes decreased and eliminated the co-payment rate for socially protected groups. For example, before 2014, children under 6 years old, meritorious people, people working in military forces… had to pay 5% of examination and treatment costs. But since 2014, their co-payment rate is 0%. Also, an annual copayment ceiling was introduced for any cardholder with continuous enrolment for at least five years in fifth stage. As a result, people who continuously enroll in health insurance for more than 5 years will have a copayment rate of zero. The co-payment rate also was reduced from 20% to 5% for the poor, near-poor, people who lived in mountainous areas, relatives of meritorious people. (see in Table 5). This is a good policy for social welfare because it supports more vulnerable people in society.

3. On going challenges to the Universal health insurance coverage in Vietnam.

In the end of 1992, the government introduced a National health insurance scheme. In the following years, the government continued to expand insurance coverage, established a Health care fund for the poor, and subsidized some social beneficiaries to increase the percentage of people participating in insurance schemes. Thanks to these efforts, until December 31, 2020, the number of people participating in health insurance was 87.96 million, reaching a coverage rate of 90.85% of the population. In which, the state budget pays and supports over 51 million people, accounting for 58% .( Report of Vietnam's Ministry of Health 2020,p2). The number of people who are eligible to get free health insurance has increased by the time. Although it is considered a good social welfare policy, it potentially creates an inevitable burden for the government budget, especially in the context that Vietnam is among the most rapidly aging countries in the world.

The Vietnamese public health insurance scheme based on individual insurance rather than family one. It means that each member in a family may join in different types of health insurance with different premiums, subsidies and copayments. Even though health insurance had been regulated to be compulsory, identification of those who are not currently enrolled is problematic.

Most of uninsured people are informal sector and the identity of people who are not enrolled is unknown. Further, the lack of an electronic database of enrolees limits the ability to pursue those who dropout of enrolment.

To encourage continuous enrolment and minimise adverse selection, benefits to expensive services are restricted to those who have a minimum of 6-month enrolment, as introduced for the voluntary scheme in second stage. However, the effectiveness of this measure has not been assessed. Besides, the utilization of health insurance needs to be better designed in the following time. For example, according to study of (Kono, Ha, Nguyen, 2019), the insurance utilization rate is significantly and substantially lower at the central hospital. There are several potential explainations for this fact. The first reason is that patients who have to go to central hospital usually have severe diseases. So they need use expensive examination and treatments which are not coved in health insurance payment. The co-payment rate in central hospital is high (70%) may be the second reason. Even they use health insurance card, the reimbursement is not much to help them decrease the cost. Finally, they worries about the discriminated treatment for insurees.

Given the fact that, insured people are encouraged to use health care services at district and provincial hospitals, the central hospital is still the most crowded and insurees decided not to use their owned health insurance card in this health facilities.

According to the view of the World Health Organization (WHO), the coverage of the health insurance system must be fully accessible on all three aspects of universal health care, including: Population coverage, (the proportion of the population participating in health insurance); Coverage of the health insurance benefits package, (the coverage of medical services is guaranteed); and Cost Coverage to reduce patient out-of-pocket. Apparently, National Health Insurance in Vietnam almost achieved the population coverage. Other two aspects need to be investigated carefully.