2 February 2009

Ethiopia: Gov't to Make Universal Insurance Compulsory

Health officials at the Federal Government are authoring a new bill that will make the provision of health insurance to anyone formally employed mandatory in Ethiopia, sources disclosed.

Although there are schemes in the healthcare sector ranging from full payment to exemption and waiver, the new bill will be the first compelling employers from both the public and private sectors to contribute to the health insurance cost of their employees. Employees who are included in a payroll system are required to pay half of the amount.

There are a little over one million people in Ethiopia believed to be formally employed by federal and regional agencies, public sector, as well as private companies and non-governmental organizations.

A bill was submitted to the Council of Ministers in mid-January 2009, before it was sent back to the Ministry of Health (MoH) for amendments suggested by members of the Council, sources disclosed.

The planning and preparation team from the Ministry of Health, led by Nejmudin Kedir (MD), also head of Planning and Programming Department, began work on the revision of the bill on Saturday, January 31, 2009, at a meeting held in Weliso, in West Shewa Zone of the Oromia Regional State.

Although the Council has instructed officials at the Ministry not to take more than a month on the amendments, officials at the Ministry hope that they will submit the final version of the bill in two weeks time.

"One of the points that the Council recommended we do is arrange a platform for the private employers to discuss on the draft," Kebede Worku (MD), the state minister for Health, told Fortune.

A series of public hearings at Parliament and discussion with stakeholders will be conducted before the bill is legislated by Parliament, according to sources in the Ministry.

"I believe this is beneficiary both for the individuals for whom the scheme is designed for, and for the insurance industry, as it is a long term opportunity," Mesay Girma, board chairman of the Ethiopian Insurance Corporation (EIC), and general director of the Ethiopian Quality and Standard Agency, told Fortune.

The ratio of payment to cover the insurance cost has not yet been decided, according to the State Minister.

"However, this system will help ensure a fair arrangement whereby all formally employed taxpayers would be covered by health insurance," State Minister Kebede said.

An expert in the insurance industry sees the coming of this bill as a mutually beneficial scheme for both individual policyholders and the industry.

United States, the wealthiest industrialized nation, does not have a universal healthcare system, although the government directly covers 27.8pc of healthcare programs through Medicare and Medicaid.

Ethiopia's total expenditure for health claimed 5.5pc of the GDP in 2005; the public sector had spent 2.6 billion Br (constituting 61pc of the total national expenditure on health), and the private sector 1.7 billion Br, according to data with the World Health Organizations (WHO).

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