May 21, 2015

Vietnam - New insurance rules baffle many

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Some 1.2 million people have opted out of medical insurance due to complex new regulations in the adjusted Medical Insurance Law, an official has admitted, and this means the Government will miss its target of 75 per cent of the population having medical insurance by the end of this year.

"The Medical Insurance Law stipulates, starting this year, that everyone must buy medical insurance but only together with their family and not individually," Vu Xuan Bang, deputy head of the Viet Nam Social Insurance's Medical Insurance Policy Implementation Division, was quoted as saying by Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) newspaper.

"So many people quit."

The rule making buying insurance for the entire family mandatory is troublesome in many ways. For instance, if a member has insurance at work or does not live with the family, it must be proved with documents, which are sometimes not easy to obtain.

"The adjusted Medical Insurance Law has many provisions that are difficult to implement," Le Van Kham, deputy head of the Ministry of Health's Medical Insurance Department, admitted.

The Ministry had sent seven task forces to check implementation of the law in 10 localities and found there was a lot of trouble, he said.

"Viet Nam Social Insurance and the Ministry of Health will work with related authorities to provide clear and easy-to-follow guidelines for buying medical insurance."

The stipulation that insurance has to be bought by the entire family is aimed at making the system sustainable by eradicating a situation where only sickly people sign up.

But to its credit, the law offers a 30 per cent premium discount for the second member, 40 per cent for the third, 50 per cent for the fourth and 60 per cent from the fifth onwards.

A five-member family thus pays only around VND2 million (US$100) for a year.

But the attrition means from 64.5 million policy holders at the end of last year – accounting for 72 per cent of the population – the number had come down to 63.3 million in April.

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