The Koror State is seeking a temporary restraining order and an injunctive relief to the scheme that will require deductions from state employees of at five percent to be paid in the health care plan.
Named defendants in the suit are members of the committee, Vice President Kerai Mariur, Stevenson Kuartei, Gregorio Ngirmang, Leilani Reklai and Mason Whipps.
The suit said that by Oct 1., KSG’s 266 employees already holds a commercial health insurance coverage and so are private companies such as Palau Pacific Resort, Palau Royal Resort, Palasia Hotel, Morita Corporation, Western Caroline Trading Corporation, Palau Community College, Palau Shipping Company, Palau Public Utilities Corporation, Palau National Communications Corporation, Palau Social Security Administration and Palau Community Action Agency.
The lawsuit stated that there are at least 1,000 people who are covered by private insurance company.
The government according to the plaintiff relied on “faulty assumptions” that no one in the country has obtained a commercially available health care coverage.
The lawsuit stated that the government is committing an impairment of contract by failure to explore other reasonable policy alternatives.
It also argued that implementation of the healthcare plan is a violation of the substantive due process because the mandatory deduction may not be returned to the plaintiffs.
The law, according to the lawsuit is also a violation of equal protection of the law because the statute excludes any care related to hemodialysis.
Under the new law all employees and employers in the country are required to participate in the new plan.
Earlier the private sector employers requested the government to delay the implementation.
As of press time a TRO has not been issued.
Those employees already covered by commercial health insurance requested exemption from the HCF and to delay its implementation to allow them for proper consultation on the regulations, benefit schedule and negotiation with insurance companies to cover the shortfall from the national health plan to the employer’s respective health care plan.
The new law will be handled by Social Security Administration which will manage the funds collected for the system and creates a Healthcare Committee, comprised of government officials.
The measure is comprised of two components, the Medical Savings Fund, made up of individual Medical Savings Accounts. The measure recommended that all employed persons in Palau, as well their employers and the self-employed, will pay into the Medical Savings Fund.
The fund will be comprised of individual Medical Savings Accounts, which may be used to cover most medical services, including regular check-ups and outpatient services. The health insurance benefit will complement these accounts, covering higher-cost medical procedures, including those that require inpatient care at Belau National Hospital or medical referrals.
The proposed payment into the fund are the following; for employees: a minimum of 2.5% of their insured earnings; for employers: a minimum of 2.5% their employee’s earnings; and for the self-employed, will pay both the employee’s and the employer’s share, for a total of minimum contribution of 5% of insured earnings.
Aside from the contributions, various loans and grants may be paid into the fund. These funds may come from foreign governments, from appropriations from the National Government, or from grants from non-government organizations such as the ADB.
According to the measure once funds become available, a person may use them for any healthcare services not explicitly excluded by law or regulation, for health insurance subscription costs, for premiums for private health insurance benefits.
Under the plan, a person becomes eligible for coverage by the health insurance benefit after two full quarters of paying into the health care system. The health insurance benefit will generally cover inpatient care at the Belau National Hospital and off-island care that is approved by the Medical Referral Committee. The coverage will be subject to a co-payment, which will be the responsibility of the covered patient. The amount of the copayment will be 20% of the cost of the medical service, but will be capped based on a sliding scale, to be determined by income.
For general medical services that cap will be from $200 to $400, and for inpatient care or medical referrals, it will be anywhere from $1,000 to $4,000.
The program will have an initial start up cost of $50,000 to provide the necessary equipment to efficiently administer the health insurance program.
