The deputy Finance Minister, Cassiel Ato Forson has explained that cabinet has approved an amendment to the National Health Insurance Authority (NHIA) Act to put a charge/levy on some activities of financial institutions in the country saying: “This would go a long way to finance the occurring gaps in the finances of the Authority and clear the arrears”.
Cabinet has approved a new levy to be imposed on financial institutions to serve as a revenue stream to shore up the financing gap of the National Health Insurance Scheme (NHIS).
The new levy, which is now set for approval by Parliament to raise additional sources of funding to support the NHIS, comes just after four months since financial institutions (banks) began implementing a 17.5% VAT charges on financial services.
Currently, the 17.5% VAT being charged on the provision of financial services has a 2.5% inherent levy to partly finance the National Health Insurance Scheme (NHIS), making it the biggest funding source for the Scheme.
This year, government has set a target to raise about GH¢144 million from the 17.5 percent VAT on fee-based financial services at a time 22 out of the 28 commercial banks have recorded record profit of GH¢1.43 billion last year.
According to policymakers, the funding for the NHIS is inadequate requiring government to tap into other sectors of the economy to raise revenue for a scheme that caters for the healthcare of about two-thirds of Ghanaians.
In 2014 alone, NHIS claims owed service providers reached GH¢998 million.
The Finance Minister, Seth Tekper earlier this year told parliament that the government released GH¢828.4 million and GH¢1.06 billion into the National Health Insurance Fund (NHIF) account in 2013 and 2014 respectively, for the payment of claims of service providers.
However, health service providers say government owes them more than GH¢456 million in arrears and has threatened to withdraw their services to NHIS subscribers.
Addressing members of parliament and the committee on health before Parliament went on recess, the CEO of the National Health Insurance Authority (NHIA), Sylvester Mensah intimated to the committee that “the Authority would not be able to fully pay for claims for the year 2015 even if the total amount of NHIL/SSNIT releases are paid in full and on time”.
The NHIF has thus asked government to supplement its programmes with GH¢887.37 million to take the Fund’s expected revenue inflow to GHC2billion for 2015 in other for the Authority to execute its mandate.
The NHIF expects a large chunk of its revenue to come from levies from National Health Insurance Levy (NHIL) and SSNIT, premium income from the informal sector, interest income from investments, processing fees and other income as well as a funding gap to be taken up by the government.
Mr. Mensah has therefore called on the legislature to urge the Ministry of Finance to make shortfall available to the Authority to enable it meet its obligations.
But Mr. Ato Forson informed the Committee that the Ministry is “committed to ensuring timely releases of funds for statutory payments”.
He also assured the Committee that the Ministry is in touch with the Ministry of Health and the Authority to source additional funding for health delivery in Ghana.
A total amount of Ghc456million stood as arrears in respect of claims of providers. The NHIA boss told the Committee that “it was these arrears that have led to the recent uproar by providers not to recognize the NHIS cards at their facilities”.
However, the deputy finance minister indicated that the 1ST tranche had already been forwarded to Bank of Ghana for payment, emphasing that if the amendment bill is passed it would go a long way to support the Scheme.
On the basis of the Finance Ministry Budget statement for 2015, the NHIL is expected to realise an amount of GHC1.18 billion from NHIL and SSNIT contributions in the year 2015, whilst the premium from informal sector is budgeted at Ghc43.99million, representing an average premium of Ghc12.00 per member for an active membership of 3,638,742 for the sector.
The Authority expects to earn a total interest income of Ghc15.95million from its investment portfolio, as well as earning Ghc39.88million on processing fees,provider credential fees,motor insurance fees and sale of tender documents.
For this year, the Authority plans to intensify efforts through massive membership campaigns and policy reforms to encourage enrolment and renewal of membership. It is estimated that 40.1% of the population or 10.93million would constitute the active membership of the NHIS in 2015.
It leaves the Authority with a financing gap of Ghc887.35million which is expected to be financed by government from its contingency vote.
The Allocation formula which has subsequently been approved by Parliament stipulates that the Authority shall allocate and disburse monies from the Fund in order to achieve the object of the Fund.
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