Insurance Online

All workers in Uganda will have to pay at least four percent of their salaries towards a mandatory Social Health Insurance starting next financial year, according to a scheme recently approved by Cabinet.
If endorsed by Parliament, the SHI scheme will compel employers to match each employee’s deduction with an equal percentage.
The ministry of Health says about $30 million will be collected from employees and employers every year, a move which outgoing Health Minister Jim Muhwezi says will help improve service delivery.
“Once the scheme starts, we shall save money, which we will use to put more drugs in hospitals, train and recruit more health workers and equip medical centers,” Muhwezi said.
Mr. Augustine Masiko, a consultant who has been putting together the plan for the scheme says the SHI will roll out to the entire population over the next five years, starting with civil servants and workers in the formal sector.
“Unlike other schemes offered by insurance companies, the proposed Social Health Insurance Scheme will be mandatory and purely medical. Its premium will be lower,” Masiko said in an interview.
Low performance
Like many developing countries, Uganda’s health spending has always been below the required minimum stated by the World Health Organization.
Government spending on drugs per person this financial year for instance stood at $1.2 far below the WHO minimum of $3.8.
The move to introduce a mandatory health insurance scheme could be a delayed innovation, but experts say it would resolve the paradox of funds shortage, while reducing donor dependence.
The ministry of Finance has often restricted increased spending on health using donor grants - amidst cries for more equipment, drugs and higher wages - saying that this would cause local price increases and hurt macro-economic stability.
Mobilization of local resources for health spending is increasingly becoming a popular alternative in developing countries since it balances macro-economic stability interests with the need for increased per capita spending on health.
The effectiveness of the new scheme will, however, depend on how innovative its architects and implementers will be in mobilizing contributions from the informal sector workers who constitute the majority of those without access to health care services.
“We will enroll informal sector workers through groups like UTODA (for tax drivers) and market vendors associations,” Masiko said, adding that they would borrow a leaf from Senegal, where women were for instance enrolled through their micro credit groups.
It is almost certain that the scheme will mobilize contributions from the formal sector with ease since the deductions would be made from the source.
The mandatory National Social Security Fund for example has about 250,000 members from whom it collects about billion ($5m) per month.
To my mind this is a really good idea for Uganda. It is known how bad the situation with health care in Africa is. Hopefully the WHO and other organizations will help Africans realize this idea. Not only in Uganda but the whole continent.

This entry was posted on Thursday, May 18th, 2006 at 4:51 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.