City Cabinet Increases Public Health Premium Rate by 30pc

Under a public-health scheme in Addis Abeba, community insurance beneficiaries will be subjected to a 30pc increase in their annual premium to 500 Br.

The move comes a year after the Ethiopian Health Insurance Services (HIS), formerly the Health Insurance Agency, forwarded a recommendation to push premiums to double the amount the City Administration decided to accept. The scheme was launched in 2011 with 170 Br as the annual fee, however, the rates have increased at least twice since.

The Addis Abeba City cabinet has approved the increase in premium rates on a scheme designed to provide affordable access to healthcare by low-income households. The scheme covers 288,000 households in the capital, catering to 1.3 million low-income residents primarily engaged in the informal sector. It was an agenda tabled for the cabinet on October 16, 2021, during its first session after the Prosperity Party formed a government earlier this month.

“The cabinet made a reasonable adjustment by taking the current living cost into consideration,” said Ibrahim Keke, director of Community Based Health Insurance at the Addis Abeba Health Bureau.

There is no uniform premium adjustment across the country, with regional states mandated to change rates within their respective jurisdictions. The highest premium in urban areas such as Dire Dawa is 520 Br, while the premium ceiling in rural areas is 250 Br. Regional administrations and Dire Dawa city are expected to adjust their respective premium rates in the coming months.

According to sources close to the matter, the premium rate in some regional states might be set close to the ceiling proposed by the HIS.

“Our mandate is to propose the ideal premium rate,” said Zemedkun Abebe, communications director for Health Insurance Services. “The decision lies with regional states and city administrations.”

Since January this year, the escalation of service fees charged by public health centres and hospitals put pressure on the scheme.

"We're not confident the premiums collected will be sufficient to cover costs even after the adjustment," Zemedkun told Fortune.

Last year, the Health Insurance Service collected 2.2 billion Br in premiums and paid out 1.2 billion Br to 2,000 public health institutions.