INSURANCE

CHAPTER 4:

HEALTH INSURANCE
CONTENT
Role of Health Insurance

Core content of health insurance

Experiences of health insurance implementation in

other countries

Health insurance in Vietnam

4.1. Role of Health Insurance
4.1.1. Health Insurance as a financial safety net
oHealth insurance (HI) acts as a protective shield, providing financial
support to individuals and families when they face medical
emergencies such as illnesses, injuries, or accidents.
oIt helps to minimize the financial burden associated with high
medical costs, ensuring that healthcare remains accessible even
during times of economic hardship.
Example: A person diagnosed with a critical illness like cancer can
▪

rely on health insurance to cover hospitalization, treatments, and

medications, reducing the strain on their personal finances.
4.1. Role of Health Insurance
4.1.2. Equitable access to healthcare services
o HI is designed to promote healthcare equity, ensuring that individuals
from all socioeconomic classes can access essential medical services
regardless of their financial status.
o Through a pooled fund mechanism, contributions from individuals and
governments allow low-income populations to benefit from
subsidized healthcare services.
Example: In universal health insurance systems, individuals who
▪

cannot afford premiums still receive coverage through government

subsidies or community contributions.
4.1. Role of Health Insurance
4.1.3. Improving public health outcomes
oBy providing financial assistance for preventive care, early detection,
and timely treatment, HI contributes to better health outcomes for
the population.
oRegular health check-ups and vaccinations become more affordable,
reducing the incidence of preventable diseases and their long-term
complications.
Example: Vaccination programs funded by health insurance reduce
▪

the spread of contagious diseases, benefiting the broader

community.
4.1. Role of Health Insurance
4.1.4. Economic stability and productivity
o HI supports economic stability by reducing the risk of catastrophic
healthcare expenses, which can lead to poverty for uninsured
individuals or families.
o Access to healthcare ensures a healthier workforce, enhancing
productivity and reducing absenteeism due to illness.
Example: Employers offering health insurance see higher employee
satisfaction and retention, contributing to overall economic growth.
4.1. Role of Health Insurance
4.1.5. Social solidarity and risk sharing
o HI embodies the principle of social solidarity, where risks and
healthcare costs are shared across a large population.
o Contributions are made by both healthy and ill individuals, ensuring
that those who face unexpected health issues are supported by the
collective fund.
 4.2. Core content of Health Insurance
4.2.1. Participants and coverage
•Who participates in health insurance?
Individuals: Employees, self-employed persons, students, and retirees
o

can join health insurance schemes, either voluntarily or mandatorily,

depending on the regulations.
Groups: Employers often provide health insurance for their workforce
o

as part of employee benefits. Governments may enroll entire

populations in universal health insurance programs.
 4.2. Core content of Health Insurance
4.2.1. Participants and coverage
•Who participates in health insurance?
Individuals: Employees, self-employed persons, students, and retirees
o

can join health insurance schemes, either voluntarily or mandatorily,

depending on the regulations.
Groups: Employers often provide health insurance for their workforce
o

as part of employee benefits. Governments may enroll entire

populations in universal health insurance programs.
 4.2. Core content of Health Insurance
4.2.1. Participants and coverage
•Levels of coverage:
Coverage varies based on the type of insurance plan, the participant's
o

contributions, and the regulatory framework.

Example:
o

Basic plans may cover only essential healthcare services (e.g.,

▪

general check-ups, emergency care).

Premium plans offer broader coverage, including specialized
▪

treatments, advanced procedures, and wellness programs.

 4.2. Core content of Health Insurance
4.2.2. Premiums
•Definition: Premiums are the amounts paid by participants (individuals,
employers, or governments) to access health insurance benefits.
•Calculation: Premiums are based on actuarial calculations, which analyze
factors (such as: Risk levels: Age, health status, and occupation of participants;
Expected costs: Forecast of healthcare expenses for the insured population)
Premiums are structured to ensure the sustainability of the insurance fund
while remaining affordable for participants.
•Example: A young, healthy individual might pay lower premiums compared to
an older person with pre-existing medical conditions due to differing risk
profiles.
 4.2. Core content of Health Insurance
4.2.3. Claims and benefits
•Claims process:
Participants file claims when they incur medical expenses that
o

fall under the scope of their health insurance plan.

Insurers verify the claim, and if approved, reimburse the
o

individual or directly pay the healthcare provider.

 4.2. Core content of Health Insurance
4.2.3. Claims and benefits
•Types of benefits: Financial reimbursement: Covers expenses for:
Medical treatments: Doctor consultations, diagnostic tests, and
▪

prescribed medications.
Hospitalization: Costs of in-patient care, surgeries, and intensive care
▪

units (ICU).
Other services: Physical therapy, rehabilitation, and maternity care.
▪

Some plans may also include non-monetary benefits, such as health

o

education and preventive care programs.

•Example: A participant undergoing surgery can claim reimbursement for
hospital bills, medications, and follow-up care.
 4.2. Core content of Health Insurance
4.2.4. Health insurance fund
•Definition:
The health insurance fund is a pooled reserve of premiums collected from
o

participants. It is managed by the insurance provider or government agency.

•Purpose of the fund:
Covering claims: Ensures timely and sufficient reimbursement for medical
o

expenses incurred by participants.

Healthcare infrastructure: Supports the development and maintenance of
o

hospitals, clinics, and other medical facilities.

Risk management: Maintains reserves for unforeseen medical crises or
o

large-scale health emergencies (e.g., pandemics).

 4.2. Core content of Health Insurance
4.2.4. Health insurance fund
•Fund sustainability:
To remain viable, the fund relies on balanced contributions, efficient
o

management, and cost-control measures (e.g., fraud prevention, bulk

procurement of medical supplies).
•Example:
A national health insurance program uses its fund to pay for participants’
o

cancer treatments while also investing in new diagnostic equipment for

public hospitals.
 4.3. Experiences of health insurance implementation in other countries

4.3.1. Japan: A comprehensive health insurance system

•Overview: Japan's health insurance system is one of the most
advanced and inclusive globally, providing coverage to nearly all
citizens through a mix of public and private programs.
•Key Features:
Universal coverage: All citizens, including foreign residents, are
o

required to enroll in health insurance, either through:

Employer-based plans for employees and their dependents.
▪

National Health Insurance (NHI) for self-employed individuals,

▪

retirees, and others not covered by employer-based plans.

 4.3. Experiences of health insurance implementation in other countries
4.3.1. Japan: A comprehensive health insurance system
Government subsidies: Significant subsidies are provided for low-income
o

groups and elderly citizens to ensure affordability.

Cost-Sharing mechanism:
o

Patients pay a small portion of healthcare costs (typically 10-30%), with the
rest covered by insurance. Caps are in place to prevent excessive out-of-
pocket expenses.
•Strengths:
High-quality healthcare services accessible to all.
o

Government oversight ensures cost control and standardized medical fees.

o

•Challenges: An aging population increases the financial burden on the system.

 4.3. Experiences of health insurance implementation in other countries
4.3.2. South Korea: Universal health insurance with preventive focus
•Overview:
South Korea’s National Health Insurance Service (NHIS) provides mandatory
universal health insurance, ensuring comprehensive healthcare coverage for
the entire population.
•Key Features:
Preventive care emphasis: The system prioritizes preventive healthcare,
o

offering free or low-cost health screenings to detect diseases early.

Cost-Sharing mechanism: Participants share a portion of healthcare costs,
o

such as consultation fees and prescriptions, while insurance covers the

majority.
 4.3. Experiences of health insurance implementation in other countries
4.3.2. South Korea: Universal health insurance with preventive focus
•Key Features:
Employer and government contributions:
o

Premiums are shared between employees, employers, and the government,

ensuring financial sustainability.
•Strengths:
Strong focus on early disease detection reduces long-term treatment costs.
o

Advanced IT infrastructure facilitates efficient management and claims

o

processing.
•Challenges: Rising healthcare costs due to an increase in chronic diseases and
demand for advanced medical technologies.
 4.3. Experiences of health insurance implementation in other countries
4.3.3. Thailand and the Philippines: Expanding access to healthcare
•Thailand:
Universal coverage scheme (UCS): Thailand implemented UCS in 2002 to
o

provide healthcare access to uninsured citizens, particularly the

underserved rural population.
Key features: Funded by general taxation. Minimal or no out-of-pocket
o

expenses for primary and secondary care.

Strengths: Significant improvements in health indicators, such as reduced
o

infant mortality rates.

Challenges: Funding constraints and uneven service quality between urban
o

and rural areas.

 4.3. Experiences of health insurance implementation in other countries
4.3.3. Thailand and the Philippines: Expanding access to healthcare
•The Philippines:
PhilHealth (Philippine health insurance corporation): Aims to provide
o

health insurance for all citizens, focusing on poor and marginalized groups.
Key features: Subsidized premiums for low-income households through
o

government contributions. Coverage includes hospitalization, outpatient

services, and preventive care.
Strengths: Steady expansion of coverage over the years.
o

Challenges: Limited healthcare infrastructure and workforce in remote

o

areas.
 4.4. Health insurance in Vietnam
4.4.1. Historical context
• Introduction and evolution:
o Health insurance (HI) was introduced in Vietnam in the late 20th century as part of
the country’s broader efforts to modernize its healthcare system and ensure social
protection.
o Initially limited in scope, it targeted specific groups like state employees and workers
in formal sectors.
o Over the years, the system expanded to cover a larger portion of the population,
including self-employed individuals, students, and vulnerable groups.
o Major reforms, such as the 2008 Law on Health Insurance, strengthened the legal
framework, making HI mandatory for all citizens and establishing universal
healthcare goals.
 4.4. Health insurance in Vietnam
4.4.2. Objectives
•Affordability:
The primary aim of Vietnam’s HI system is to provide affordable
o

healthcare for all citizens, ensuring that medical services are not a
financial burden, particularly for low-income households and
marginalized groups.
•Equity and inclusivity:
HI seeks to narrow the healthcare gap between rural and urban areas,
o

enabling equitable access to medical services for all socioeconomic

classes.
 4.4. Health insurance in Vietnam
4.4.2. Objectives
•Financial protection:
By pooling contributions, the system reduces the risk of catastrophic
o

healthcare expenses that could push households into poverty.

•Improved public health:
HI also aims to promote preventive care and early detection of
o

diseases, improving overall public health outcomes and reducing

long-term treatment costs.
 4.4. Health insurance in Vietnam
4.4.3. Organization
•Centralized management:
Vietnam’s health insurance system is centrally managed by Vietnam Social
o

Security (VSS), which oversees the collection of contributions, fund

management, and claim reimbursements.
This centralized approach ensures uniformity in policy implementation
o

across provinces and regions.

•Coverage levels:
Participants are categorized into different groups (e.g., employees, students,
o

farmers, retirees), each with specific coverage plans and contribution rates.
Benefits typically include outpatient and inpatient care, emergency services,
o

maternity care, and chronic disease management.

 4.4. Health insurance in Vietnam
4.4.3. Organization
•Sources of funding:
Contributions come from three primary sources:
o

[Link]: Workers, self-employed individuals, and voluntary

participants contribute directly.
[Link]: Businesses are required to pay a portion of their employees’
premiums as part of their social insurance obligations.
[Link] subsidies: The government fully or partially subsidizes
premiums for vulnerable groups, such as the poor, children under six,
ethnic minorities, and social welfare beneficiaries.
 4.4. Health insurance in Vietnam
4.4.3. Organization
Key features of Vietnam's health insurance system
•Mandatory enrollment: All citizens are required to participate, creating a
universal health insurance system.
•Health insurance fund: Contributions are pooled into a national health
insurance fund, which finances medical reimbursements and healthcare
facility improvements.
•Tiered healthcare access: Insured individuals receive treatment at designated
public hospitals and clinics, with preferential rates and prioritized services.
•Preventive care programs: Coverage includes vaccination campaigns, health
screenings, and education initiatives to reduce disease prevalence.
 4.4. Health insurance in Vietnam
4.4.3. Organization
Challenges and Opportunities
• Challenges:
o Underfunding in rural areas: Limited healthcare infrastructure and personnel.
o Administrative inefficiencies: Delays in claim processing and fund allocation.
o Balancing sustainability and equity: Ensuring adequate funding while maintaining
affordability for vulnerable groups.
• Opportunities:
Expanding digitalization: E-health systems can improve management and
o

accessibility.
Health education: Increased awareness can drive more proactive participation in health
insurance programs.
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