Lao PDR

Publications

Situation and Priorities

Social protection situation

The National Social Protection Strategy, adopted in 2020, has the vision that “By 2030, Lao people [will] have access to basic social protection services, consisting of health insurance, social security and social welfare, in an equitable, adequate, effective and sustainable way”. Recent years have seen significant progress in expanding social protection coverage through all three pillars: health insurance, social security and social welfare. Nevertheless, gaps and challenges persist. Only 867,277 people—353,962 insured members and their dependants—benefit from comprehensive social protection coverage through the National Social Security Fund (NSSF). This includes most public sector workers, slightly less than half of all workers in formal enterprises, and 26,793 self-employed workers especially in the agricultural sector. The majority of the Lao workforce (86.4 per cent) is in informal employment and lacks basic social protection coverage. There are no national social welfare programmes in place for the most vulnerable segments of the population, while donor-supported programmes provide cash benefits and services to a limited number of people. Despite these challenges, Lao PDR is committed to further developing and strengthening the national social protection system guided by the National Social Protection Strategy.

There has been notable extension of social health insurance coverage in recent years. According to the Ministry of Health, effective coverage increased from 11 per cent in 2008 to 94.5 per cent currently. This was achieved by adopting a mix of funding mechanisms combining social contributions with tax-based financing and direct co-payments. However, social health protection has worsened over the past years, with a doubling of the proportion of households suffering catastrophic health spendings (3.0 per cent in 2007 to 6.7 per cent in 2019). Also, the financial sustainability of the National Health Insurance (NHI) is at high risk, fragilized by irregular, insufficient and unpredictable Government resource allocations and increasing costs of care. More government investment is necessary to reduce out of pocket expenditures (estimated at 31 per cent in 2024) and enhance the management and administration of the NHI.

COVID-19 and other crises

In response to the COVID-19 pandemic, the Government of Lao PDR enacted swift and stringent lockdowns, considerably limiting the number of cases and ensuring that the healthcare system was not over-burdened. The effects were mainly economic and social, with over 500,000 people estimated to have lost their livelihoods. UNDP estimated that 383,000 people may have fallen into poverty. Food security and education were disrupted, while gender-based violence cases increased, leaving Lao PDR at high risk of losing development gains made over the last decade. Social protection responses included deferring social security contributions of affected businesses and paying unemployment benefits from the NSSF. The Government of Lao PDR, with support from many development partners and donors, implemented cash transfer pilots and livelihood generation programmes.

In 2022, the country faced a fresh economic crisis due to climbing debt obligations and fallouts of the COVID-19 pandemic and Ukraine crisis which impacted the import-dependent country. According to the Lao Statistics Bureau, inflation averaged 31.2 per cent in 2023. With the reopening of borders, many rural and urban workers started migrating to neighbouring countries for work. Although employment rose in 2022 and some sectors like tourism saw growth, earnings did not keep pace with inflation. High inflation and increased costs of living, particularly for buying food and fuel, greatly affected the poor and vulnerable with some families forced to reduce their consumption of nutritious food and others withdrawing children from school.

Government and social partner priorities

The National Social Protection Strategy states its vision as “By 2030, Lao people have access to basic social protection services, consisting of health insurance, social security and social welfare, in an equitable, adequate, effective and sustainable way.” It is guided by the principles of equity, adequacy, effectiveness, universality, non-discrimination, progressivity and sustainability. The Strategy states three clear goals; namely, to further develop and strengthen the health insurance system, social security system, and social welfare system.

The government and social partners prioritise the expansion of social security and social welfare coverage to more Lao people. These priorities are part of their respective organisational work plans. A key priority is to amend the Law on Social Security in 2024-25 to improve the design, governance and operations of the scheme through a consultative tripartite social dialogue process. The Lao Social Security Organisation works closely with the Lao Federation of Trade Unions (LFTU) and civil society organisations representing informal workers as well as the Lao National Chamber of Commerce and Industry (LNCCI) and sectoral associations, supported by ILO and other development partners, to improve the social security system and expand coverage.

A clear government priority is to continue to expand health protection coverage. The domestic resources for social health insurance are not enough to guarantee its sustainability, particularly in view of the current fiscal situation. The ILO in collaboration with other development partners is supporting the government to consider policy options to improve sustainability and healthcare services. In this context, the ongoing revision of the Law on Health Insurance and the Law on Social Security aims to address the fundamental issue of financing social health protection and guaranteeing financial protection in Lao PDR, without reversing the progress on population coverage achieved so far. In addition, strengthening operational capacities to administer the scheme is at the core of the government’s priorities.

ILO Projects and Programmes

Results

  • In 2022-23, ILO provided technical and financial support to the amendment of the Health Insurance and Social Security Laws: (i) Comprehensive consultative processes leading to the development of the draft Health Insurance and Social Security Laws, expected to be enacted in 2024; (ii) Evidence produced to inform policy options, including an actuarial analysis, technical and legal review notes, policy briefs, and research on informality.
  • In 2022-23, following the adoption of the Decree on social security inspections, ILO supported the review of Social Security Inspection Guidelines and development of Standard Operating Procedures.
  • In 2023, the first mobile social security office in Lao PDR was piloted with ILO support. It is expected to be expanded and implemented in more provinces in 2024.
  • In 2023, 713 officials (293 women) from the government, social partners and civil society were trained on various social protection topics, including in a Training of Trainers which created a cadet of 28 master trainers.
  • In 2022, NHI claim and verification guidelines were revised and trainings conducted in seven provinces.
  • In 2019, the ILO provided technical support to the development of the first National Social Protection Strategy and its implementation plan.
  • In 2018-19, ILO provided support to the merging of social health protection schemes into the design and rollout of an integrated National Health Insurance scheme.
  • In 2018, amendment of the Social Security Law was enacted by the government, benefiting from the results of ILO's actuarial analysis of the National Social Security Fund.

Funding gaps / Support the ILO

US$ 500,000

Formulate a comprehensive social protection policy and legislative framework

US$ 1,000,000

Implement & evaluate pilot programmes in selected areas and/or for specific target groups

US$ 5,000,000

Support the national implementation of some social protection programmes

US$ 1,000,000

Strengthen institutional capacities to expand social security and health insurance coverage and expand digital presence

US$ 150,000

Document the country's experience through technical reports, briefs and videos and contribute to the ILO's how-to guides.

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ILO Experts

IMG
Kenichi Hirose
Senior Specialist, Social Protection
IMG
Noutthong Alounthong
National Project Coordinator
IMG
Loveleen De
Program Manager
IMG
Marielle Phe Goursat
Chief Technical Advisor on SHP
Xuxu Li
Jr Professional Officer, Social Protection
IMG
Yuta Momose
Junior Professional Officer
Khemphone Phaokhamkeo
National Coordinator
IMG
Oulayvanh Sayarath
National Project Coordinator
IMG
Thongleck Xiong
National Project Coordinator