10th of February, 2019
The Universal Health Insurance Law 2/2018
Keywords: Infrastructure & Power, Employment
Following years of drafting, discussion and planning, the Egyptian Parliament approved a new universal health coverage law which was officially promulgated by the President on 11 January 2018. The Universal Health Insurance Law (2/2018) is considered an unprecedented attempt to regulate Egypt’s healthcare sector, extending comprehensive healthcare coverage to each sector of society.
Prior to this law, healthcare was addressed on a case-by-case basis. So for instance, law 99/1992 addressed the healthcare of students and law 23/2012 addressed the healthcare of women who are the main income earners or main providers of the family.
I. The timeline of application of the law
In implementing the new law, Egypt’s 27 governorates will be divided into six geographic areas and the law will then be applied gradually over the next 15 years. The first phase will implement the law in Port Said, Suez, Ismailia, North Sinai, South Sinai, and Alexandria, followed by the remaining governorates over the five following phases. Greater Cairo will be in the last geographic area to have the law implemented. During the transition period, existing laws and regulations in the healthcare insurance sector will remain in force.
One notable effect of the new law and its application is that some of the special taxes that will supplement its funding will start to be collected by the Ministry of Finance this fiscal year (2018-2019). These taxes will be applied according to the geographic timeline of implementation, so the cities listed above will be the first to pay them.
II. The beneficiaries of the Universal Health Insurance Law
Subscribing to the new health insurance system will be mandatory for all Egyptians residing within the Arab Republic of Egypt and optional for Egyptians working or staying with their families aboard. Fees are being set according to income, and additional sources of funding to include taxes on the tobacco industry and other supplementary areas. The government has committed to provide the policy free of charge to approximately 25% of the population who cannot afford it. The current policy, which will be replaced by the Universal Health Insurance Law, covers only approximately 58% of the population, of whom only an estimated 6% actually use the services.
III. The different financing obligations under the Universal Health Insurance Law
While employees currently generally pay a health insurance contribution rate of 1% of their insured income, contribution rates under the new law will depend on personal circumstances:
- Those already insured under Law 79/1975 will pay a base health insurance contribution of 1% of their salary;
- Individuals who are business owners insured under Law No. 108/1976, members of liberal professions such as lawyers and doctors, and Egyptians working abroad will pay the greater of 5% of their insured salary, the income stated in their tax return, or the maximum of the social insurance salary;
- Casual laborers insured under Law No. 112/1980 will pay 5% of their insured salary up to a maximum of 7% for each household, with the Treasury paying any difference;
- All of the above will pay an additional 3% of their income if they have a spouse who either is not working or does not have a stable income, as well as a further 1% of their income for each of their children and dependents;
- Widowers and those entitled to retirement pensions will pay a contribution of 2% of their monthly pension; and
- The Public Treasury will contribute 5% of the minimum monthly wage on behalf of each individual who is unemployed or otherwise unable to pay.
The monthly employer contribution is 4% of the insured salary under the current social insurance scheme (law no. 79/1975) for each employee, provided that such a contribution is no less than EGP 50. Under the new law, the contributions outlined above will be paid by the employer on a monthly basis, in addition to the current social insurance contributions. However, the new contributions will only come into effect from the date of application of the new law in the relevant governorate.
It is anticipated that individuals will pay between an estimated 1300 EGP and 4000 EGP a year, excluding those under the minimum wage. Estimates of the total cost of implementing the new law vary, but media reports indicate that it may cost up to 600 billion EGP by the year 2032.
The law and its Executive Regulations detail that supplementary payments will complement those outlined above. The most substantial of those payments is a 0.0025 tax on revenues that will have to be paid by all companies, irrespective of their size, location or status (the tax will apply to public and private companies, and those operating within Egypt’s free zones). The tax will be payable along with each company’s corporate tax return and the timing of its application will depend on geographical location (and the implementation of the new law). It will not be deductible from any company’s corporate income tax. The said tax will be collected from all companies starting from the fiscal year 2018-2019.
These additional or supplementary taxes will also be payable under the following circumstances:
- when applying for or renewing car and driving licenses (prices may range from 20 EGP to 300 EGP);
- as a toll fee on certain highways;
- by tobacco manufacturers (a 10% tax on all tobacco products except cigarettes) and a 0.75 EGP tax on all cigarette packs sold;
- by doctors and pharmacists when applying for a license to open a clinic or a hospital (as a fee of between 1000 EGP and 15,000 EGP). Hospitals will also pay a tax of 1000 EGP for every bed they have.
These additional payments will be collected by the relevant competent authorities, including the Tax Authority, the Ministry of Health and the Ministry of Interior Affairs, who will pay the proceeds to the General Authority for Universal Health Insurance.
IV. The services covered by the new system
The service’s scheme comprises three levels:
Level 1: This level is the first line of defense against diseases. It includes preventive measure and referrals, strengthening collective public health and fighting the spread of disease. Level 1 services are provided through the following essential healthcare units: family practitioners, general practitioners, diagnostic services and dentists.
Level 2: This level includes the phases of diagnosis and treatment. Level 2 services are provided through hospitals, diagnostic services and rehabilitation services, whether they are governmental or accredited non-governmental.
Level 3: This level includes the rehabilitation phase for special cases. Level 3 services are provided through specialized centers and hospitals, whether they are governmental or accredited non-governmental.
Patients can only benefit from Levels 2 and 3 after being referred from Level 1 except in the case of emergencies. The system’s services include: primary healthcare services (treatment by general practitioners, laboratory tests and rehabilitation services), treatment and stays in hospitals; other services (services for workers, pensioners and students) and drug services.
V. The Regulatory Authorities
- General Authority for Universal Health Insurance:
The General Authority for Universal Health Insurance will replace the current General Authority for Health Insurance in all its rights and obligations. It is a new public organization, of an economic nature, established so as to be responsible for managing and financing the system under the supervision of the Prime Minister.
A permanent committee responsible for pricing the medical services will be established and will include independent experts and specialists. This authority will establish outlets to serve insured people, within a geographical distribution that allows it to conduct quality healthcare and service. It will finance the services by contracting healthcare providers, therapeutic systems covered under the General Authority for Healthcare and any other entity affiliated with the General Authority for Universal Health Insurance.
The General Authority for Universal Health Insurance will determine which level of service each patient should receive, and the patient will have the advantage of selecting from various service providers. In case the treatment prescribed is unavailable in Egypt, the patient will be able to receive it abroad.
The General Authority for Universal Health Insurance will be financed by the contributions outlined above.
- General Authority for Healthcare:
This new public service organization will operate under the supervision of the Minister of Health and will serve as the state’s main tool in regulating the health services provided. It will also provide health and therapeutic services – at all three levels, within or outside hospitals – to all insured people through its outlets and through the Ministry of Health’s sub-entities.
- General Authority for Health Accreditation and Supervision :
This new public service organization will operate under the supervision of the President and will focus on the quality of health services and on ensuring public trust in the health services provided, at both the national and international levels. As such, it will take all necessary measures to achieve its objectives, and, in particular, the following:
- Set quality standards for health services and apply them to medical care facilities, and accomplish the accreditation and registration of medical facilities and medical professionals, ensuring compliance with quality standards and overseeing suspension of such accreditation in case of non-compliance; and
- Provide a means of ensuring the efficiency of the system and the transparency of its activities.
The authority may charge for accreditation and registration certificates and for the services provided, in accordance with the law.
A central committee for disputes settlement will be established within the General Authority for Health Accreditation and Supervision to settle any relevant dispute within three months.
VI. Anticipated impact of the Universal Health Insurance Law
The intended impact of this Universal Health Insurance Law is of course significant. Initial developments predicted by its designers and advocates include the elimination of patient waiting lists for surgeries and critical medical interventions within six months (following implementation), securing required stock of infant formula and vaccines, and finishing the comprehensive survey and treatment of Hepatitis C for Egyptian citizens.
Researchers and activists have praised the law as being an important step in the right direction, towards offering universal healthcare within Egypt. Many have also expressed concern, however, over its sustainability, particularly with the long, and somewhat complicated, period of implementation.
VII. Next steps to keep an eye on
- The gradual geographical application of the law is expected to cause a number of complexities and questions that will need to be addressed by the Ministry of Health;
- The pricing of medical services by the committee to be established with the General Authority for Universal Health Insurance;
- The quality standards to be set by General Authority for Health Accreditation and the supervision of medical care facilities to be included under the new system; and
- In our analysis of the law, we identified ambiguities in the calculation of the contributions due and we are currently seeking further information from the Ministry of Health
I. The timeline of application of the law
In implementing the new law, Egypt’s 27 governorates will be divided into six geographic areas and the law will then be applied gradually over the next 15 years. The first phase will implement the law in Port Said, Suez, Ismailia, North Sinai, South Sinai, and Alexandria, followed by the remaining governorates over the five following phases. Greater Cairo will be in the last geographic area to have the law implemented. During the transition period, existing laws and regulations in the healthcare insurance sector will remain in force.
One notable effect of the new law and its application is that some of the special taxes that will supplement its funding will start to be collected by the Ministry of Finance this fiscal year (2018-2019). These taxes will be applied according to the geographic timeline of implementation, so the cities listed above will be the first to pay them.
II. The beneficiaries of the Universal Health Insurance Law
Subscribing to the new health insurance system will be mandatory for all Egyptians residing within the Arab Republic of Egypt and optional for Egyptians working or staying with their families aboard. Fees are being set according to income, and additional sources of funding to include taxes on the tobacco industry and other supplementary areas. The government has committed to provide the policy free of charge to approximately 25% of the population who cannot afford it. The current policy, which will be replaced by the Universal Health Insurance Law, covers only approximately 58% of the population, of whom only an estimated 6% actually use the services.
III. The different financing obligations under the Universal Health Insurance Law
While employees currently generally pay a health insurance contribution rate of 1% of their insured income, contribution rates under the new law will depend on personal circumstances:
- Those already insured under Law 79/1975 will pay a base health insurance contribution of 1% of their salary;
- Individuals who are business owners insured under Law No. 108/1976, members of liberal professions such as lawyers and doctors, and Egyptians working abroad will pay the greater of 5% of their insured salary, the income stated in their tax return, or the maximum of the social insurance salary;
- Casual laborers insured under Law No. 112/1980 will pay 5% of their insured salary up to a maximum of 7% for each household, with the Treasury paying any difference;
- All of the above will pay an additional 3% of their income if they have a spouse who either is not working or does not have a stable income, as well as a further 1% of their income for each of their children and dependents;
- Widowers and those entitled to retirement pensions will pay a contribution of 2% of their monthly pension; and
- The Public Treasury will contribute 5% of the minimum monthly wage on behalf of each individual who is unemployed or otherwise unable to pay.
The monthly employer contribution is 4% of the insured salary under the current social insurance scheme (law no. 79/1975) for each employee, provided that such a contribution is no less than EGP 50. Under the new law, the contributions outlined above will be paid by the employer on a monthly basis, in addition to the current social insurance contributions. However, the new contributions will only come into effect from the date of application of the new law in the relevant governorate.
It is anticipated that individuals will pay between an estimated 1300 EGP and 4000 EGP a year, excluding those under the minimum wage. Estimates of the total cost of implementing the new law vary, but media reports indicate that it may cost up to 600 billion EGP by the year 2032.
The law and its Executive Regulations detail that supplementary payments will complement those outlined above. The most substantial of those payments is a 0.0025 tax on revenues that will have to be paid by all companies, irrespective of their size, location or status (the tax will apply to public and private companies, and those operating within Egypt’s free zones). The tax will be payable along with each company’s corporate tax return and the timing of its application will depend on geographical location (and the implementation of the new law). It will not be deductible from any company’s corporate income tax. The said tax will be collected from all companies starting from the fiscal year 2018-2019.
These additional or supplementary taxes will also be payable under the following circumstances:
- when applying for or renewing car and driving licenses (prices may range from 20 EGP to 300 EGP);
- as a toll fee on certain highways;
- by tobacco manufacturers (a 10% tax on all tobacco products except cigarettes) and a 0.75 EGP tax on all cigarette packs sold;
- by doctors and pharmacists when applying for a license to open a clinic or a hospital (as a fee of between 1000 EGP and 15,000 EGP). Hospitals will also pay a tax of 1000 EGP for every bed they have.
These additional payments will be collected by the relevant competent authorities, including the Tax Authority, the Ministry of Health and the Ministry of Interior Affairs, who will pay the proceeds to the General Authority for Universal Health Insurance.
IV. The services covered by the new system
The service’s scheme comprises three levels:
Level 1: This level is the first line of defense against diseases. It includes preventive measure and referrals, strengthening collective public health and fighting the spread of disease. Level 1 services are provided through the following essential healthcare units: family practitioners, general practitioners, diagnostic services and dentists.
Level 2: This level includes the phases of diagnosis and treatment. Level 2 services are provided through hospitals, diagnostic services and rehabilitation services, whether they are governmental or accredited non-governmental.
Level 3: This level includes the rehabilitation phase for special cases. Level 3 services are provided through specialized centers and hospitals, whether they are governmental or accredited non-governmental.
Patients can only benefit from Levels 2 and 3 after being referred from Level 1 except in the case of emergencies. The system’s services include: primary healthcare services (treatment by general practitioners, laboratory tests and rehabilitation services), treatment and stays in hospitals; other services (services for workers, pensioners and students) and drug services.
V. The Regulatory Authorities
- General Authority for Universal Health Insurance:
The General Authority for Universal Health Insurance will replace the current General Authority for Health Insurance in all its rights and obligations. It is a new public organization, of an economic nature, established so as to be responsible for managing and financing the system under the supervision of the Prime Minister.
A permanent committee responsible for pricing the medical services will be established and will include independent experts and specialists. This authority will establish outlets to serve insured people, within a geographical distribution that allows it to conduct quality healthcare and service. It will finance the services by contracting healthcare providers, therapeutic systems covered under the General Authority for Healthcare and any other entity affiliated with the General Authority for Universal Health Insurance.
The General Authority for Universal Health Insurance will determine which level of service each patient should receive, and the patient will have the advantage of selecting from various service providers. In case the treatment prescribed is unavailable in Egypt, the patient will be able to receive it abroad.
The General Authority for Universal Health Insurance will be financed by the contributions outlined above.
- General Authority for Healthcare:
This new public service organization will operate under the supervision of the Minister of Health and will serve as the state’s main tool in regulating the health services provided. It will also provide health and therapeutic services – at all three levels, within or outside hospitals – to all insured people through its outlets and through the Ministry of Health’s sub-entities.
- General Authority for Health Accreditation and Supervision :
This new public service organization will operate under the supervision of the President and will focus on the quality of health services and on ensuring public trust in the health services provided, at both the national and international levels. As such, it will take all necessary measures to achieve its objectives, and, in particular, the following:
- Set quality standards for health services and apply them to medical care facilities, and accomplish the accreditation and registration of medical facilities and medical professionals, ensuring compliance with quality standards and overseeing suspension of such accreditation in case of non-compliance; and
- Provide a means of ensuring the efficiency of the system and the transparency of its activities.
The authority may charge for accreditation and registration certificates and for the services provided, in accordance with the law.
A central committee for disputes settlement will be established within the General Authority for Health Accreditation and Supervision to settle any relevant dispute within three months.
VI. Anticipated impact of the Universal Health Insurance Law
The intended impact of this Universal Health Insurance Law is of course significant. Initial developments predicted by its designers and advocates include the elimination of patient waiting lists for surgeries and critical medical interventions within six months (following implementation), securing required stock of infant formula and vaccines, and finishing the comprehensive survey and treatment of Hepatitis C for Egyptian citizens.
Researchers and activists have praised the law as being an important step in the right direction, towards offering universal healthcare within Egypt. Many have also expressed concern, however, over its sustainability, particularly with the long, and somewhat complicated, period of implementation.
VII. Next steps to keep an eye on
- The gradual geographical application of the law is expected to cause a number of complexities and questions that will need to be addressed by the Ministry of Health;
- The pricing of medical services by the committee to be established with the General Authority for Universal Health Insurance;
- The quality standards to be set by General Authority for Health Accreditation and the supervision of medical care facilities to be included under the new system; and
- In our analysis of the law, we identified ambiguities in the calculation of the contributions due and we are currently seeking further information from the Ministry of Health
The Universal Health Insurance Law 2/2018
10th of February, 2019
Keywords: Infrastructure & Power, Employment
Following years of drafting, discussion and planning, the Egyptian Parliament approved a new universal health coverage law which was officially promulgated by the President on 11 January 2018. The Universal Health Insurance Law (2/2018) is considered an unprecedented attempt to regulate Egypt’s healthcare sector, extending comprehensive healthcare coverage to each sector of society.
Prior to this law, healthcare was addressed on a case-by-case basis. So for instance, law 99/1992 addressed the healthcare of students and law 23/2012 addressed the healthcare of women who are the main income earners or main providers of the family.
I. The timeline of application of the law
In implementing the new law, Egypt’s 27 governorates will be divided into six geographic areas and the law will then be applied gradually over the next 15 years. The first phase will implement the law in Port Said, Suez, Ismailia, North Sinai, South Sinai, and Alexandria, followed by the remaining governorates over the five following phases. Greater Cairo will be in the last geographic area to have the law implemented. During the transition period, existing laws and regulations in the healthcare insurance sector will remain in force.
One notable effect of the new law and its application is that some of the special taxes that will supplement its funding will start to be collected by the Ministry of Finance this fiscal year (2018-2019). These taxes will be applied according to the geographic timeline of implementation, so the cities listed above will be the first to pay them.
II. The beneficiaries of the Universal Health Insurance Law
Subscribing to the new health insurance system will be mandatory for all Egyptians residing within the Arab Republic of Egypt and optional for Egyptians working or staying with their families aboard. Fees are being set according to income, and additional sources of funding to include taxes on the tobacco industry and other supplementary areas. The government has committed to provide the policy free of charge to approximately 25% of the population who cannot afford it. The current policy, which will be replaced by the Universal Health Insurance Law, covers only approximately 58% of the population, of whom only an estimated 6% actually use the services.
III. The different financing obligations under the Universal Health Insurance Law
While employees currently generally pay a health insurance contribution rate of 1% of their insured income, contribution rates under the new law will depend on personal circumstances:
- Those already insured under Law 79/1975 will pay a base health insurance contribution of 1% of their salary;
- Individuals who are business owners insured under Law No. 108/1976, members of liberal professions such as lawyers and doctors, and Egyptians working abroad will pay the greater of 5% of their insured salary, the income stated in their tax return, or the maximum of the social insurance salary;
- Casual laborers insured under Law No. 112/1980 will pay 5% of their insured salary up to a maximum of 7% for each household, with the Treasury paying any difference;
- All of the above will pay an additional 3% of their income if they have a spouse who either is not working or does not have a stable income, as well as a further 1% of their income for each of their children and dependents;
- Widowers and those entitled to retirement pensions will pay a contribution of 2% of their monthly pension; and
- The Public Treasury will contribute 5% of the minimum monthly wage on behalf of each individual who is unemployed or otherwise unable to pay.
The monthly employer contribution is 4% of the insured salary under the current social insurance scheme (law no. 79/1975) for each employee, provided that such a contribution is no less than EGP 50. Under the new law, the contributions outlined above will be paid by the employer on a monthly basis, in addition to the current social insurance contributions. However, the new contributions will only come into effect from the date of application of the new law in the relevant governorate.
It is anticipated that individuals will pay between an estimated 1300 EGP and 4000 EGP a year, excluding those under the minimum wage. Estimates of the total cost of implementing the new law vary, but media reports indicate that it may cost up to 600 billion EGP by the year 2032.
The law and its Executive Regulations detail that supplementary payments will complement those outlined above. The most substantial of those payments is a 0.0025 tax on revenues that will have to be paid by all companies, irrespective of their size, location or status (the tax will apply to public and private companies, and those operating within Egypt’s free zones). The tax will be payable along with each company’s corporate tax return and the timing of its application will depend on geographical location (and the implementation of the new law). It will not be deductible from any company’s corporate income tax. The said tax will be collected from all companies starting from the fiscal year 2018-2019.
These additional or supplementary taxes will also be payable under the following circumstances:
- when applying for or renewing car and driving licenses (prices may range from 20 EGP to 300 EGP);
- as a toll fee on certain highways;
- by tobacco manufacturers (a 10% tax on all tobacco products except cigarettes) and a 0.75 EGP tax on all cigarette packs sold;
- by doctors and pharmacists when applying for a license to open a clinic or a hospital (as a fee of between 1000 EGP and 15,000 EGP). Hospitals will also pay a tax of 1000 EGP for every bed they have.
These additional payments will be collected by the relevant competent authorities, including the Tax Authority, the Ministry of Health and the Ministry of Interior Affairs, who will pay the proceeds to the General Authority for Universal Health Insurance.
IV. The services covered by the new system
The service’s scheme comprises three levels:
Level 1: This level is the first line of defense against diseases. It includes preventive measure and referrals, strengthening collective public health and fighting the spread of disease. Level 1 services are provided through the following essential healthcare units: family practitioners, general practitioners, diagnostic services and dentists.
Level 2: This level includes the phases of diagnosis and treatment. Level 2 services are provided through hospitals, diagnostic services and rehabilitation services, whether they are governmental or accredited non-governmental.
Level 3: This level includes the rehabilitation phase for special cases. Level 3 services are provided through specialized centers and hospitals, whether they are governmental or accredited non-governmental.
Patients can only benefit from Levels 2 and 3 after being referred from Level 1 except in the case of emergencies. The system’s services include: primary healthcare services (treatment by general practitioners, laboratory tests and rehabilitation services), treatment and stays in hospitals; other services (services for workers, pensioners and students) and drug services.
V. The Regulatory Authorities
- General Authority for Universal Health Insurance:
The General Authority for Universal Health Insurance will replace the current General Authority for Health Insurance in all its rights and obligations. It is a new public organization, of an economic nature, established so as to be responsible for managing and financing the system under the supervision of the Prime Minister.
A permanent committee responsible for pricing the medical services will be established and will include independent experts and specialists. This authority will establish outlets to serve insured people, within a geographical distribution that allows it to conduct quality healthcare and service. It will finance the services by contracting healthcare providers, therapeutic systems covered under the General Authority for Healthcare and any other entity affiliated with the General Authority for Universal Health Insurance.
The General Authority for Universal Health Insurance will determine which level of service each patient should receive, and the patient will have the advantage of selecting from various service providers. In case the treatment prescribed is unavailable in Egypt, the patient will be able to receive it abroad.
The General Authority for Universal Health Insurance will be financed by the contributions outlined above.
- General Authority for Healthcare:
This new public service organization will operate under the supervision of the Minister of Health and will serve as the state’s main tool in regulating the health services provided. It will also provide health and therapeutic services – at all three levels, within or outside hospitals – to all insured people through its outlets and through the Ministry of Health’s sub-entities.
- General Authority for Health Accreditation and Supervision :
This new public service organization will operate under the supervision of the President and will focus on the quality of health services and on ensuring public trust in the health services provided, at both the national and international levels. As such, it will take all necessary measures to achieve its objectives, and, in particular, the following:
- Set quality standards for health services and apply them to medical care facilities, and accomplish the accreditation and registration of medical facilities and medical professionals, ensuring compliance with quality standards and overseeing suspension of such accreditation in case of non-compliance; and
- Provide a means of ensuring the efficiency of the system and the transparency of its activities.
The authority may charge for accreditation and registration certificates and for the services provided, in accordance with the law.
A central committee for disputes settlement will be established within the General Authority for Health Accreditation and Supervision to settle any relevant dispute within three months.
VI. Anticipated impact of the Universal Health Insurance Law
The intended impact of this Universal Health Insurance Law is of course significant. Initial developments predicted by its designers and advocates include the elimination of patient waiting lists for surgeries and critical medical interventions within six months (following implementation), securing required stock of infant formula and vaccines, and finishing the comprehensive survey and treatment of Hepatitis C for Egyptian citizens.
Researchers and activists have praised the law as being an important step in the right direction, towards offering universal healthcare within Egypt. Many have also expressed concern, however, over its sustainability, particularly with the long, and somewhat complicated, period of implementation.
VII. Next steps to keep an eye on
- The gradual geographical application of the law is expected to cause a number of complexities and questions that will need to be addressed by the Ministry of Health;
- The pricing of medical services by the committee to be established with the General Authority for Universal Health Insurance;
- The quality standards to be set by General Authority for Health Accreditation and the supervision of medical care facilities to be included under the new system; and
- In our analysis of the law, we identified ambiguities in the calculation of the contributions due and we are currently seeking further information from the Ministry of Health
I. The timeline of application of the law
In implementing the new law, Egypt’s 27 governorates will be divided into six geographic areas and the law will then be applied gradually over the next 15 years. The first phase will implement the law in Port Said, Suez, Ismailia, North Sinai, South Sinai, and Alexandria, followed by the remaining governorates over the five following phases. Greater Cairo will be in the last geographic area to have the law implemented. During the transition period, existing laws and regulations in the healthcare insurance sector will remain in force.
One notable effect of the new law and its application is that some of the special taxes that will supplement its funding will start to be collected by the Ministry of Finance this fiscal year (2018-2019). These taxes will be applied according to the geographic timeline of implementation, so the cities listed above will be the first to pay them.
II. The beneficiaries of the Universal Health Insurance Law
Subscribing to the new health insurance system will be mandatory for all Egyptians residing within the Arab Republic of Egypt and optional for Egyptians working or staying with their families aboard. Fees are being set according to income, and additional sources of funding to include taxes on the tobacco industry and other supplementary areas. The government has committed to provide the policy free of charge to approximately 25% of the population who cannot afford it. The current policy, which will be replaced by the Universal Health Insurance Law, covers only approximately 58% of the population, of whom only an estimated 6% actually use the services.
III. The different financing obligations under the Universal Health Insurance Law
While employees currently generally pay a health insurance contribution rate of 1% of their insured income, contribution rates under the new law will depend on personal circumstances:
- Those already insured under Law 79/1975 will pay a base health insurance contribution of 1% of their salary;
- Individuals who are business owners insured under Law No. 108/1976, members of liberal professions such as lawyers and doctors, and Egyptians working abroad will pay the greater of 5% of their insured salary, the income stated in their tax return, or the maximum of the social insurance salary;
- Casual laborers insured under Law No. 112/1980 will pay 5% of their insured salary up to a maximum of 7% for each household, with the Treasury paying any difference;
- All of the above will pay an additional 3% of their income if they have a spouse who either is not working or does not have a stable income, as well as a further 1% of their income for each of their children and dependents;
- Widowers and those entitled to retirement pensions will pay a contribution of 2% of their monthly pension; and
- The Public Treasury will contribute 5% of the minimum monthly wage on behalf of each individual who is unemployed or otherwise unable to pay.
The monthly employer contribution is 4% of the insured salary under the current social insurance scheme (law no. 79/1975) for each employee, provided that such a contribution is no less than EGP 50. Under the new law, the contributions outlined above will be paid by the employer on a monthly basis, in addition to the current social insurance contributions. However, the new contributions will only come into effect from the date of application of the new law in the relevant governorate.
It is anticipated that individuals will pay between an estimated 1300 EGP and 4000 EGP a year, excluding those under the minimum wage. Estimates of the total cost of implementing the new law vary, but media reports indicate that it may cost up to 600 billion EGP by the year 2032.
The law and its Executive Regulations detail that supplementary payments will complement those outlined above. The most substantial of those payments is a 0.0025 tax on revenues that will have to be paid by all companies, irrespective of their size, location or status (the tax will apply to public and private companies, and those operating within Egypt’s free zones). The tax will be payable along with each company’s corporate tax return and the timing of its application will depend on geographical location (and the implementation of the new law). It will not be deductible from any company’s corporate income tax. The said tax will be collected from all companies starting from the fiscal year 2018-2019.
These additional or supplementary taxes will also be payable under the following circumstances:
- when applying for or renewing car and driving licenses (prices may range from 20 EGP to 300 EGP);
- as a toll fee on certain highways;
- by tobacco manufacturers (a 10% tax on all tobacco products except cigarettes) and a 0.75 EGP tax on all cigarette packs sold;
- by doctors and pharmacists when applying for a license to open a clinic or a hospital (as a fee of between 1000 EGP and 15,000 EGP). Hospitals will also pay a tax of 1000 EGP for every bed they have.
These additional payments will be collected by the relevant competent authorities, including the Tax Authority, the Ministry of Health and the Ministry of Interior Affairs, who will pay the proceeds to the General Authority for Universal Health Insurance.
IV. The services covered by the new system
The service’s scheme comprises three levels:
Level 1: This level is the first line of defense against diseases. It includes preventive measure and referrals, strengthening collective public health and fighting the spread of disease. Level 1 services are provided through the following essential healthcare units: family practitioners, general practitioners, diagnostic services and dentists.
Level 2: This level includes the phases of diagnosis and treatment. Level 2 services are provided through hospitals, diagnostic services and rehabilitation services, whether they are governmental or accredited non-governmental.
Level 3: This level includes the rehabilitation phase for special cases. Level 3 services are provided through specialized centers and hospitals, whether they are governmental or accredited non-governmental.
Patients can only benefit from Levels 2 and 3 after being referred from Level 1 except in the case of emergencies. The system’s services include: primary healthcare services (treatment by general practitioners, laboratory tests and rehabilitation services), treatment and stays in hospitals; other services (services for workers, pensioners and students) and drug services.
V. The Regulatory Authorities
- General Authority for Universal Health Insurance:
The General Authority for Universal Health Insurance will replace the current General Authority for Health Insurance in all its rights and obligations. It is a new public organization, of an economic nature, established so as to be responsible for managing and financing the system under the supervision of the Prime Minister.
A permanent committee responsible for pricing the medical services will be established and will include independent experts and specialists. This authority will establish outlets to serve insured people, within a geographical distribution that allows it to conduct quality healthcare and service. It will finance the services by contracting healthcare providers, therapeutic systems covered under the General Authority for Healthcare and any other entity affiliated with the General Authority for Universal Health Insurance.
The General Authority for Universal Health Insurance will determine which level of service each patient should receive, and the patient will have the advantage of selecting from various service providers. In case the treatment prescribed is unavailable in Egypt, the patient will be able to receive it abroad.
The General Authority for Universal Health Insurance will be financed by the contributions outlined above.
- General Authority for Healthcare:
This new public service organization will operate under the supervision of the Minister of Health and will serve as the state’s main tool in regulating the health services provided. It will also provide health and therapeutic services – at all three levels, within or outside hospitals – to all insured people through its outlets and through the Ministry of Health’s sub-entities.
- General Authority for Health Accreditation and Supervision :
This new public service organization will operate under the supervision of the President and will focus on the quality of health services and on ensuring public trust in the health services provided, at both the national and international levels. As such, it will take all necessary measures to achieve its objectives, and, in particular, the following:
- Set quality standards for health services and apply them to medical care facilities, and accomplish the accreditation and registration of medical facilities and medical professionals, ensuring compliance with quality standards and overseeing suspension of such accreditation in case of non-compliance; and
- Provide a means of ensuring the efficiency of the system and the transparency of its activities.
The authority may charge for accreditation and registration certificates and for the services provided, in accordance with the law.
A central committee for disputes settlement will be established within the General Authority for Health Accreditation and Supervision to settle any relevant dispute within three months.
VI. Anticipated impact of the Universal Health Insurance Law
The intended impact of this Universal Health Insurance Law is of course significant. Initial developments predicted by its designers and advocates include the elimination of patient waiting lists for surgeries and critical medical interventions within six months (following implementation), securing required stock of infant formula and vaccines, and finishing the comprehensive survey and treatment of Hepatitis C for Egyptian citizens.
Researchers and activists have praised the law as being an important step in the right direction, towards offering universal healthcare within Egypt. Many have also expressed concern, however, over its sustainability, particularly with the long, and somewhat complicated, period of implementation.
VII. Next steps to keep an eye on
- The gradual geographical application of the law is expected to cause a number of complexities and questions that will need to be addressed by the Ministry of Health;
- The pricing of medical services by the committee to be established with the General Authority for Universal Health Insurance;
- The quality standards to be set by General Authority for Health Accreditation and the supervision of medical care facilities to be included under the new system; and
- In our analysis of the law, we identified ambiguities in the calculation of the contributions due and we are currently seeking further information from the Ministry of Health
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