Laos

The social security scheme for the civil servants was established in 1993. This scheme is administered jointly by MOLSW and MOF. The fund is kept under the Treasury Department of MOF. The scheme coverage includes military personnel and policemen as well. The scheme is funded by contributions of employee and government. Employees pay 8% of their wages; the government subsidizes the rest of expenditure.

The decree regarding social security system for the private sector employees was approved in 1999 and it was officially implemented in mid 2001. It is a contributory and compulsory scheme. The scheme is applied to all employers who have 10 or more employees. The total contribution rate is 9.5% of employee’s earnings in which 5% comes from employers and 4.5% from employees. The insurable target groups are all employees who work for State, private and partnership enterprises in the areas of industry, agriculture and services. The SSO for the private sector is a self-financing body under the supervision of MOLSW. There is a tripartite board of directors comprising 11 members: 3 persons from government, 4 persons from employers’ group and 4 persons from employees’ group. The board of directors is the supreme governing body of the organisation. The management team for daily operation of the organisation comprises one director general and two general deputy directors. The board of directors is composed of 1 chairman and 2 vice-chairmen who are appointed by Prime Minister according to the recommendation of the MOLSW. Some key statistics of SSO’s performance are as follows.²

As for health care, Lao PDR started with a parallel approach of launching and extending social health protection to the formal and informal sectors and seeking mechanisms to cover the poorest segment through social assistance. After nearly twenty years of separate development of four different demand side schemes – for civil servants, private sector employees, informal economy workers and the poor, the scaling up and combination of these schemes is on the agenda for coming years. Just how this is done, at what pace, with what balance between the four schemes and in what sequence is still to be decided.
 
One of the resolutions made by the Eighth Party Congress on financing health care is the expansion of social health protection for all. Consequently, the Prime Minister’s office requested MOH, MOLSW and Ministry of Finance (MOF) to take steps towards the merger of all social health protection systems.Lao PDR aims at creating a National Health Insurance Fund (NHIF), which would cover all Lao citizens, foreign residents and expatriates living in Lao PDR. The NHIF would be composed of existing social health protection schemes: CSS/SASS (as far as their health insurance components are concerned), SSO, CBHI and HEFs. The NHIF would be financed through various sources: the State budget, SASS, SSO, contributions of the insured (households) and support from individuals, communities, domestic and international organizations. The NHIF will be at least partially contributory. Insured members will access a set of cost-effective services for high incidence treatable conditions’ on a cashless basis and the presence of a viable district health system will be supported. The MOH is responsible for the implementation of the NHIF in close collaboration with MOLSW and MOF.
 
This commitment is notably reflected in the roadmap to universal health care financing formulated by the MOH in 2008, a Prime Minister’s Decree on the establishment of a NHIF which is being drafted and the HFS(Health Financing Strategy 2010-2015). Regarding the extension of social health protection coverage the targets of which are ‘50% of the population by 2015’ and ‘100% by 2020’, some challenges remain i.e. the fact that informal economy represents 80% of the total population; the extensive nature of poverty in rural and remote locations (and the general lack of cash economy). Therefore, a new approach to extending coverage in rural areas will probably need to be carefully designed and implemented. It will most probably be based on a mandatory coverage principle with highly subsidized premiums for the poor and the informal economy workers.