Senate Bill No. 8-48 was originally introduced in March and after consulting with the members of Ad Hoc Committee on Health Care and the technical assistance group funded by the Asia Bank, the Senate Committee on Health and Education reviewed the bill and recommended several changes into the measure.
The measure recommended that the Social Security Administration 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 measure, 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.
“This initial appropriation will serve as a small investment in what will become a financially self-sustaining health insurance system. This would be in contrast to Palau’s current healthcare system, which requires regular appropriations from the government,” the committee report said.
The measure stated that this will “ address maintaining low administrative costs by using existing infrastructure, providing equitable access to off-island care by pooling the risk of these high costs, providing a sustainable source of financing for health care to supplement government funding, and promoting reduced costs by providing incentives to the population to improve their health status.”
