Upon the request of a reader, FactCheck

verified how the volume of private health insurance programmes has changed after the launching of the Universal Healthcare Programme.

Before 2013, only those citizens who had the least accessibility to healthcare received state health insurance. The pool of these citizens included:  socially vulnerable, pensioners, children up to the age of five years and disabled children, among others (Decrees N218 and N165 of the Government of Georgia). After the change of government, the targeted approach for healthcare was replaced by the universality principle and the state programme of universal healthcare was launched in 2013. The Universal Healthcare Programme does not cover those citizens of Georgia who had private health insurance as of 1 July 2013. However, if a citizen had his private health insurance terminated after 1 July 2013, he was transferred to the Universal Healthcare Programme and receives a basic package. In 2014, those individuals who used health insurance packages as mandated by the aforementioned decrees N218 and N165 were also transferred to the Universal Healthcare Programme. The healthcare system’s funding was also changed.

The Universal Healthcare Programme is implemented by the Social Service Agency and private companies are not a part of the programme. In the past, the state health insurance programmes envisaged by decrees N218 and N165 were run by private insurance companies. After the state health insurance programmes were changed to the universal healthcare system, private insurance companies were completely removed from the state health insurance programme.

At some point, different opinions began to be voiced that the removal of private insurance companies from state healthcare programmes would negatively affect the development of the health insurance market, especially when considering that state healthcare programmes took over the majority of this market. Further, this fact was also commented upon by the International Monetary Fund whose 10 June 2013 conclusion reads: "The delegation of the health insurance service to a public body – the Social Service Agency – will significantly decrease the private insurance market."

According to the statistical data

of the Insurance State Supervision Service of Georgia, after the launch of the Universal Healthcare Programme, the amount of people using private health insurance (corporate insurance in public bodies, corporate insurance in private companies, individual insurance) dropped at the initial stage. According to the data of the first quarter of 2014, the number of health insurance packages decreased by 117,326. However, there is a trend of a rising number of individuals using private health insurance from the beginning of the second quarter of 2014. According to third quarter information, 536,014 individuals are using private insurance which is slightly greater (by 1,241) than the amount which was used before the start of the Universal Healthcare Programme.

Graph 1:

 Dynamics of Change in the Number of Private Health Insurance Packages

FactCheck

also took interest in the amount of increase seen in private health insurance from the second quarter of 2015. After the launch of the Universal Healthcare Programme, individual (singular) insurance packages increased by 39% (9,014). The amount of corporate insurance packages in state organs increased by approximately 32% (57,981). However, the number of corporate insurance packages dropped (see Graph 2) by 20% (65,754).

Graph 2:

Amount of Private Health Insurance Packages by Customer

The Chairperson of the Georgian Insurance Companies Association, Devi Khechinashvili, in his interview with FactCheck,

stated: "If we take a look at the trend, there is no significant change. Of note is the fact that the total amount of insured people is the same as it was in 2013. Basically, there is no growth. Additionally, even more important is the fact that corporate insurance dropped in the private sector. The insurance sector does not feel stable because we do not know where the healthcare funding system is heading to. Our single biggest problem is instability."

At the present moment, private insurance companies offer their customers the different so-called "build up" package which includes insurance of those healthcare services not covered by the Universal Healthcare Programme (medication, dental service, among others). Therefore, an individual who is covered by the Universal Healthcare Programme can also have an individual private health insurance package in addition. This said, the universal + private insurance system, as such, might change. Devi Khechinashvili further commented in his interview with us: "The state does not have sufficient funds for the Universal Healthcare Programme and now they are discussing how to save money. There is some talk that the universal system could be revised. Perhaps, a person who uses private health insurance might be taken out of the Universal Healthcare Programme."

As the state directly funds the Universal Healthcare Programme, the associated financial risks that come with insurance are also the responsibility of the state budget. This mode of practice cannot be considered as an effective mechanism for expenditure management and this is proven by the statistics of the previous years. Notwithstanding the fact that the Universal Healthcare Programme’s budget is rapidly increasing, the funds allocated for the programme in 2013 and 2014 were insufficient. Last year, more than GEL 100 million was required to be added to the programme’s budget. The current year began with the payment of hospital debts. It is highly probable that the Universal Healthcare Programme will experience a lack of funds this year as well. The programme’s budget is planned to be GEL 161 million in the first quarter, GEL 146 million in the second quarter, GEL 143 million in the third quarter and GEL 117 in the fourth quarter. If we take into account the fact that some of the funds for the first quarter of the budget were spent to cover debts incurred in 2015 and deduct this sum (GEL 17 million) from the first quarter budget, we will see that the budgets of the first three quarters of 2016 are almost identical. Obviously, expenditures will exceed the allocated amount of funds in the last quarter of 2016.

In order to have healthcare costs "contained" by the state, private health insurance companies need to be involved in the Universal Healthcare Programme. In this case, the private insurance company takes its own financial risks and carries out the monitoring of the programme to better serve its own interests. Considering the fact that the Universal Healthcare Programme takes the majority of the healthcare insurance market, the involvement of private companies in the state healthcare programme is important for the development of the health insurance market in general. However, as Devi Khechinashvili also remarked in his interview with FactCheck: "The involvement of private insurance companies in the state healthcare programme is currently not on the agenda."