Mr. Speaker, I beg to move, that this honourable House adopts the report of the Committee of the Whole on the Proposed Formula for the Distribution of Subsidies to be paid to licensed District Mutual Health Insurance Schemes for the year 2007.
Mr. Speaker, and in doing so I beg to present the Report of the Committee of the Whole on the Proposed Formula for the
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Distribution of Subsidies to the licensed District Mutual Health Insurance Scheme for the year 2007.
Mr. Speaker, I seek your permission to read just the Observations and Recommendations and hope that the whole of the Report will be captured as having been read in the Hansard.
The National Health Insurance Fund (NHIF) Allocation Formula for 2007 was laid before the House on Monday, 4th December, 2006 and referred to the Committee of the Whole for consideration and report in accordance with the Standing Orders of the House and the Constitution of the Republic of Ghana.
The Committee in its deliberations met with Mr. Samuel Owusu-Agyei, Deputy Minister for Health, Prof. G. Y. Gyan- Baffour, Deputy Minister for Finance and Economic Planning, Mr. Ras A. Boateng, Chief Executive Officer of the National Health Insurance Council (NHIC), Mr. Adu Anane Antwi, Director of Fund Management and Investment, NHIC and Mr. Ahmed A. Imoro, Deputy Director of Finance, NHIC and reports as follows:
2.0 Reference Documents
i. The National Health Insurance Act 650
ii. The Standing Orders of the House
iii. The 1992 Constitution of the Republic of Ghana
The National Health Insurance Council (NHIC) was established by the National
Health Insurance Act, 2003 (Act 650). The core function of the Council under Act 650 is to secure the implementation of a National Health Insurance Policy that ensures access to basic health care services to all residents.
Section 76 of Act 650 established the National Health Insurance Fund (NHIF) and made the NHIC responsible for its management.
3.1 Sources of Funds to the NHIF:
Section 78 of the National Health Insurance Act, 2003 (Act 650)
a. The National Health Insurance Levy (NHIL);
b. Two and one-half per cent (2.5%) of each person's seventeen and one-half percent (17.5%) contribution to SSNIT Pension Fund;
c. Funds allocated by Parliament;
d. Money that accrues to the Fund from investments made by the Council; and
e. Grants, donations, gifts and any other voluntary contributions made to the Fund.
4.0 Object of the Fund
The object of the Fund is to provide finance to subsidize the cost of provision of health care services to members of District Mutual Health Insurance Schemes (DMHISs) licensed by the Council.
For the purpose of implementing the object, the monies from the Fund shall be expended as follows:
a. to provide subsidy of such level as the Council shall determine to District Mutual Health Insurance Schemes (DMHISs);
b. to reinsure District Mutual Health Insurance Schemes (DMHISs) against random fluctuations of cost under conditions to be determined by the Council;
c. to set aside some monies from the Fund to provide for the health care of indigents;
d. to provide support to facilitate provision of or access to health services; and
e. to invest in any other facilitating programmes to promote access to health services; as may be determined by the Minister in consultation with the Council.
5.0 General Assumptions for the 2007 Allocation
5.1 Budgetary Allocation
Based on projections contained in the 2007 Budget Statement, the NHIC estimates that the NHIF would realize an amount of one trillion, seven hundred and fifty-nine billion, ten million cedis (¢1,759,010,000,000.00) in the year 2007 from its two major sources of funds, namely the NHIL (VAT & CEPS) and SSNIT contribution.
5.2 Registration Coverage
A registration target of fifty-five per cent (55%) is set for 2007 and it is expected that this percentage will access benefits under the Scheme in 2007.
5.3 Number of Schemes
The allocation of the Fund is based on the assumption that, one hundred
and forty-eight (148) Schemes will be operating next year.
5.4 Per Head Subsidy
Figures received from the various Schemes as at the end of June 2006 indicate that the average per capita cost of an encounter with a health service is sixty-three thousand, three hundred and fifty-five cedis (¢63,355.00). It is assumed that on average a person makes two encounters with health service providers in a year given an average cost of one twenty-six thousand, seven hundred and ten cedis (¢126,710.00) per person per year. The NHIC has accordingly proposed to increase the subsidy from hundred thousand cedis (¢100,000.00) in 2006 to one hundred and twenty thousand cedis (¢120,000.00) next year.
6.0 Investment Income
It is expected that an amount of five hundred and fifty billion, one hundred and twenty million cedis (¢550,120,000,000.00) will remain in investment at the end of 2006. Further amount of twenty-six billion, four hundred and sixty million cedis (¢26,460,000,000.00) has been allocated for investment in 2007. These investments are expected to generate an average return of ten per cent (10%) amounting to fifty- seven billion, sixty-six million cedis (¢57,066,000,000.00). This amount will however not be available for allocation as it will be retained in the investment account to grow the fund.
The total inflow to the NHIF in 2007, including the expected investment income is therefore estimated to be one trillion, eight hundred and sixteen billion, seventy- six million cedis (¢1,816,076,000,000.00).