Transcript Slide 1

Overview of social security systems in Asia
with a focus on developing countries in
East Asia
18 June 2009
Maastricht University
Hiroshi Yamabana
Social Security Actuary
ILO Social Security Department, Geneva
E-mails: [email protected]
[email protected]
1
Structure of the presentation
1.
Social and economic context
2.
Rough classifications of social security systems
in Asia
3.
Design of social security pensions
4.
Pensions: Country examples
5.
Remarks on pensions
6.
Health care as a core component of social
security
7.
Employment injury insurance (EII)
8.
(Un) employment insurance (U(E)I)
2
1.
1.
Social and economic context
Diversity
Different level of economic and social development
Different industrial structure
Different GDP per capita, productivity, wages,
price level
Different employment structure
e.g. wage-earners/non-wage earners (formal /
informal), employment share in different
economic sectors
Different demographic structure
e.g. age structure, fertility, mortality
Different level of urbanization
3
1.
2.
Social and economic context
Rapid changes
-
Economic development as a whole
Increase in GDP per capita, productivity,
wages, price level
Changes in industrial structure
(From primary to secondary/tertiary)
Changes in employment structure
i.e. wage-earners / non-wage earners (formal /
informal): not necessarily uniform, even
with increase in urban informal economy
Employment share in different economic
sectors
4
1.
-
-
Social and economic context
Rapid changes in demographic structure
i.e. age structure, fertility, mortality
Rapid urbanization (internal migration)
Increasing international migration
=>
All have substantial impacts on present /
future of social security systems and pose
challenges
5
1.
Social and economic context
6
1.
Social and economic context
7
1.
Social and economic context
8
1.
Social and economic context
9
1.
Social and economic context
Demography
Dependency ratio (in %)
2007
Total
Cambodia
China
India
Indonesia
Korea
Lao PDR
Malaysia
Mongolia
Nepal
Philippines
Singapore
Sri Lanka
Thailand
Viet Nam
Source:
(1)
62.5
39.5
57.8
50.2
38.3
77.6
56.6
49.3
71.6
61.6
37.0
44.8
44.1
50.4
Youth
2050
(2)
59.6
28.5
49.2
41.6
24.2
71.2
49.1
43.6
65.2
55.0
24.7
33.8
33.4
42.2
Old-age
(3)
2.9
11.0
8.6
8.6
14.1
6.4
7.5
5.7
6.4
6.6
12.3
11.0
10.7
8.2
Youth (1)
Total
49.1
64.8
49.6
54.1
87.0
45.4
52.3
51.3
47.7
49.7
78.4
64.7
61.7
56.2
34.4
25.9
27.4
27.2
22.4
32.8
27.7
26.3
33.7
28.4
22.5
27.0
27.1
27.1
Old-age (2)
14.7
39.0
22.2
26.9
64.6
12.6
24.6
25.0
14.0
21.3
55.9
37.7
34.6
29.1
World Population Ageing 2007, United Nations
(1) May not add total due to rounding.
(2) Population 0-14 / population 15-59
(3) Population 60 - / population 15-59
10
1.
Social and economic context
Demography
(in percentage)
Life expectancy
Total fertility rates
2005-2010
Birth
Cambodia
China
India
Indonesia
Korea
Lao PDR
Malaysia
Mongolia
Nepal
Philippines
Singapore
Sri Lanka
Thailand
Viet Nam
Source:
58.0
72.6
64.9
68.7
78.2
56.5
74.1
65.9
63.6
71.6
79.4
75.1
71.7
71.9
Age 60
17.2
19.0
17.9
17.3
21.6
16.4
18.7
17.1
16.4
18.0
22.0
19.5
19.0
19.5
2045-2050
Age 65
13.6
15.2
14.5
13.8
17.7
13.1
15.0
13.8
13.1
14.4
17.9
15.7
15.2
15.7
Birth
71.1
78.7
75.9
76.9
84.4
72.2
79.9
75.9
75.4
78.5
84.5
80.5
79.1
78.9
Age 60
20.3
22.4
21.4
20.4
26.4
19.6
22.5
20.8
19.6
21.6
26.2
23.0
22.5
22.6
2005-2010
2045-2050
3.7
1.7
2.8
2.2
1.2
4.3
2.6
2.2
3.3
2.8
1.3
1.9
1.9
2.1
2.1
1.9
1.9
1.9
1.8
1.9
1.9
1.9
2.0
1.9
1.8
1.9
1.9
1.9
Age 65
16.3
18.3
17.6
16.4
22.1
15.7
18.5
17.0
15.7
17.6
21.8
18.9
18.4
18.5
World Population Ageing 2007, United Nations
11
2.
Rough classification of social security
systems in Asia
1.
What has influenced the design of social
security systems as a whole?
Initially, not ‘logics’ on options,
but rather influences of 'models' of other developed
countries and history thereafter
People have got used to the '(once-established)
set' in the course of history
mind-
Changing ideas (e.g. DB / DC, social insurance /
are in general very difficult.
saving)
Trying to reform the once-implemented system in
accordance with changing environments (e.g. aging).
12
2.
Rough classification of social security
systems in Asia
2.
Rough classification
(1)
Anglo-Saxon group
sons / daughters of 'Beverage' idea, with
'self-help' top-up
e.g. Australia, New Zealand, (Brunei)
Tax-financed basic pensions (in New Zealand, quite high
around 65 (single) - 72.5% (couple) of average wages)
Second-tier saving
Tax-financed health care
Work injury insurance, a component of non-fault
accident
compensations (Brunei, private insurance)
Tax-financed social assistance scheme for
unemployed
13
2.
(2)
Rough classification of social security
systems in Asia
North East Asia 'Bismarck' group
sons / daughters of 'Bismarck' idea, classical
insurance based on solidarity
e.g. Korea, Chinese Taipei, Japan
'Universal' pension insurance
'Universal' health insurance
Work-injury insurance
Unemployment insurance
Maternity / sickness insurance
Social assistance as the last resort (very restricted)
14
2.
Rough classification of social security
systems in Asia
(3) 'Bismarck' group of middle-income countries
- sons / daughter of 'Bismarck' idea, classical
insurance based on solidarity, but with limited
coverage due to employment structure, with different
extension initiatives
e.g.
Philippines, Thailand
Pension insurance for the formal economy (somewhat
extended to others, but limited)
Health insurance for the formal economy plus α
Tax-based universal health care (Thailand in 2002) as an
exception
Work-injury insurance
Unemployment insurance (Thailand, 2004)
Maternity / sickness insurance
15
Social assistance limited
2.
Rough classification of social security
systems in Asia
(4)
'Bismarck' group of transitional economies
sons / daughters of 'Bismarck' idea, classical
insurance based on solidarity, but with limited
coverage due to employment structure, with
some
extension initiatives, still in the course of
development
e.g.
China, Mongolia, Viet Nam, Lao PDR
Pension insurance for the formal economy
Health
insurance for the formal economy
Work-injury insurance
Unemployment insurance (Viet Nam in 2009, Lao PDR
still in the planning stage)
Maternity / sickness insurance
16
Social assistance limited
2.
Rough classification of social security
systems in Asia
(5)
Non-insurance, saving group
sons / daughters of 'British colonies' idea,
saving plus public health care
e.g. India (somewhat, mixture), Singapore (mixture),
Malaysia (mixture), Indonesia (mixture), Sri Lanka
Provident fund (saving) for the formal economy,
Taxbased health care for all (Singapore with more self-help plus
pooling), some countries with limited
insurance coverage
(e.g. India, Indonesia)
Direct compensations and private insurer for workinjury
compensations based on lump-sum
(Malaysia as an
exception with social insurance)
No unemployment insurance (severance payment)
17
Social assistance limited
Social security in ASEAN
m
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Old age
P/U
P
S
P
S
P
S/A
S
Invalidity
P/U
P
S
S/P
S
P
S
s
Survivors
P
P
S
S/P
S
P
S
S
Medical care
U
S
S
U
Sickness
E
E
E
S
E
S
E
S
S
Maternity
E
E
E
S
E
S
E
S
S
Work injury
E
S
S
S
S/E
S
E
S
S
S
S
S
Social insurance
P
Provident fund
U
Universal
E
Employer liability
A
Social assistance
S
P/S/A U/S
S
18
3.
1.
Design of social security pensions
Roles of social security pensions
Roughly speaking, there are two major roles;
(1)
Basic income security for all
Providing basic means of living to all
residents
=>
Way of poverty alleviation
(2)
Income replacement role for income earners
Smoothening the transition before / after
retirement
Providing a partial replacement of income for
the retirement lives of income earners and
their
families
19
3.
Design of social security pensions
1.
Roles of social security pensions
-
Everyone admits (1) as the most basic role, but,
historically, (2) has developed, firstly, for civil servants
as 'salary continuation' or 'rewards for their royalty', followed
by insurance schemes for private-sector
workers and
cannot be easily extended to self-employed, rural farmers etc.,
mainly due to low affordability of insurance contributions and
administrative difficulties.
In Asia, many countries end up with 'singletier' income-related security pension
schemes
either through insurance (DB) or saving
(DC).
20
3.
2.
Design of social security pensions
Basic income security role
To be measured as 'absolute‘ level, sometimes
connected to social assistance level, minimum wages,
poverty level etc. based on a basket of goods comprising of
food, clothing, housing, energy, water etc.
Countries satisfying (partially) this role through providing
'pensions for all' (universal coverage)
Taxation group
Australia (around 67% of the elderly receive
means-tested pensions),
New Zealand, Brunei
Insurance group
Korea, Japan, Taiwan
No developing countries
21
3.
2.
Design of social security pensions
Basic income security role
Social Pensions (such as those in Australia, Brunei,
Zealand)
New
In many developing countries, it is difficult for insurance
schemes to cover substantial percentage of population
because of the large informal economy, especially rural
farmers and increasing informal workers in urban areas.
Tax-based non-contributory social pensions become
more popular in low- and middle-income countries.
22
3.
Design of social security pensions
Non-contributory pensions
23
3.
Design of social security pensions
24
Basic social security in developing countries
ILO Definition
• Universal affordable access to basic health benefits
– provided through a public health service funded by taxes, social
and private insurance and micro-insurance systems linked
together into one system.
• Income security for all children
– provided through family/child benefits aimed to facilitate access to
basic social services: education, health and housing.
• Income security for older persons and persons with
disabilities
– provided through basic universal non-contributory pensions.
• Social security to working poor and unemployed in
active age groups
– provided through social assistance and employment guarantees.
25
Affordability of basic social security
Assumptions for calculations
•
Benefit package
(1) Universal pension benefit
30 per cent of GDP per capita, capped at US$ 1 (PPP) a day, indexed with
inflation
For all the elderly 65 years of age and above and the disabled assumed as 1% of
working age population.
(2) Basic health care
Cost measured based on ratio of 300 medical staff to 100,000 population
Medical staff wages indexed in line with GDP per capita growth
Health staff wages assumed at a minimum of three times GDP per capita
Overhead costs of 67 per cent of staff costs.
(3) Child benefit
15 per cent of GDP per capita, capped at US$ 0.50 (PPP) a day, indexed with
inflation
Provided to up to two children in the age bracket of 0 -14 per woman.
(4) Income support to targeted poor and unemployed in active age group
30 per cent of GDP per capita, capped at US$ 1 (PPP) a day, indexed with inflation
10 per cent of the working age population for 100 days per year, only to those in
households not benefiting from any other form of cash transfer (i.e. child benefit,
pensions).
•
Administration costs for delivering cash benefits
15 % of cash benefit expenditure
26
Affordability of basic social security
Assumptions for calculations (2)
•
Real GDP growth
Working age population growth plus 3% (India)
Working age pop growth plus 2% (Ethiopia, Tanzania and Viet Nam)
Working age pop growth plus 1% (Other countries).
•
Total Government expenditure
Increased by 50 per cent of their current level by the year 2034, with a
maximum of 30 per cent of GDP.
•
Total Government revenue (excluding grants)
To reach the projected expenditure level by 2014 in order to reach a
balanced budget.
•
Government budget allocation
Option 1 (Status quo)
Governments will not increase the proportion of resources allocated to
social protection as in 2003.
Option 2 (Policy change)
20% of Government expenditure are allocated to the financing of basic
social protection.
27
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
Old-age pensions
Health care
Administrative costs
Ne
pa
l
Pa
k is
ta
n
Vi
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Na
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In
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Ke
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Un
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Ba
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Et
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G
uin
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oo
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Ca
m
er
ina
Fa
so
0.0%
Bu
rk
in per cent of GDP
Costs for components of a basic social protection
package as a percentage of GDP for selected
countries in Africa and Asia, 2010
Child benefits
Social assistance/employment scheme
28
Costs for basic social protection package as a
percentage of GDP for selected countries in Africa
and Asia (selected years)
12.0%
8.0%
6.0%
2010
4.0%
2020
2.0%
2030
In
di
a
Ne
pa
l
Pa
k is
ta
n
Vi
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Na
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Et
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G
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Ke
Un
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p.
Ta al
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Ba z an
ia
ng
lad
es
h
Ca
m
er
ina
Fa
so
0.0%
Bu
rk
in per cent of GDP
10.0%
29
2010
2020
2030
ina
F
Ca as o
me
ro
on
Et
h io
pi
Gu a
ine
a
K
en
Un
y
i te
Se a
dR
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.T
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an
za
Ba
n g nia
lad
es
h
Ind
ia
Ne
p
Pa al
k is
Vi tan
et
Na
m
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Bu
rk
per cent of total expenditure on basic
social protection
Share of total costs possible to be covered by domestic
financing (share of budgets allocated to basic social protection
increases to 20%)
30
Household income distribution of different type
of households (Thailand)
30%
25%
20%
15%
10%
5%
Non-covered
Covered
Whole population
9
49
,9
9
9
O
ve
r
049
,9
9
9
40
,0
0
039
,9
9
9
,0
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30
20
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0
029
,9
9
9
,9
9
019
,0
0
15
,0
0
014
,9
9
9
99
9
10
7,
50
09,
49
9
5,
00
07,
99
9
04,
12,
49
9
2,
50
N
o
in
c
om
e
0%
Non-covered (60+ yrs)
31
Social pension cost estimate (Thailand)
32
International comparison of government
expenditure on pensions
•Thailand A= 1,500 Baht per person/month to people over 60 years old (2.0% in the figure)
•Thailand B=500 Baht per person/month to people over 70 years old (0.3% in the figure)
•Each 0.8% for Thailand A and B is GPF expenditure
•Thailand (2003), Japan (1995), France (1994), Sweden, Germany, England (1993), USA (1992)
33
Crude cost estimate of non-contributory old-age
pensions (Thaialand)
4.5%
500 bahts,
65+
4.0%
Percentage in GDP
500 bahts,
60+
500 bahts,
70+
3.5%
1,000 bahts,
60+
3.0%
2.5%
2.0%
1,000 bahts,
65+
1.5%
1,000 bahts,
70+
1.0%
1,500 bahts,
60+
0.5%
0.0%
2005
2010
2015
2020
2025
2030
Year
2035
2040
2045
2050
1,500 bahts,
65+
1,500 bahts,
70+
34
Cost comparison (1,000 bahts, age 65+ universal
vs. those without social security pensions)
Percentage in GDP
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
Year
Total population
Those without insurance pensions
35
4.
Country examples
Coverage rate of social security pensions / saving
(in percentage)
Percentage of nonagricultural workers
in the total working
population(1)
Percentage of
wage earners in
the total working
population(2)
Coverage rate
Percentage of
urban
population (4)
(3)
Percentage of
Percentage of
population 15labour force
64
Cambodia
China
India
Indonesia
Korea
Lao PDR
Malaysia
Mongolia
Nepal
Philippines
Singapore
Sri Lanka
Thailand
Viet Nam
Source:
29.6
53.1
33.2
56.0
91.9
20.3
85.2
60.1
32.7
63.0
99.6
59.6
57.3
42.1
12.9
32.8
66.4
10.4
76.2
39.3
50.4
86.0
58.2
43.8
25.6
17.2
5.7
11.1
5.7
32.2
23.6
2.5
18.7
45.2
22.2
24.4
12.9
20.5
9.1
15.5
7.2
49.6
39.6
27.1
76.2
35.6
30.4
16.2
20.0
40.0
29.0
48.0
81.0
27.0
68.0
57.0
16.0
63.0
100.0
15.0
32.0
26.0
Key Indicators of the Labour Market (KLIM), 5th edition, ILO (1) and (2)
Pension at a Glance, Asia / pacific edition, OECD and WB (3)
Urban population, Development and Environment, United Nations, 2007 (4)
Some of the figures, especially of the coverage are author's tentative estimates.
36
4.
Country examples
0.
Major parameters of pension design of earningsrelated social insurance pensions
-
Minimum qualifying years
Pensionable age
Replacement rate
Salary base for pension calculation
(e.g. working time average with adjustment, final
several years' salary)
Pension indexation
Minimum / maximum pensions
37
4.
Country examples
38
4.
Country examples
39
Replacement ratio
50 %
Old-age pensions
Contributions
40 years
20 years
60 years old
40
4.
Country examples
41
4.
Country examples
Years of contributions
5
10
15
20
25
30
35
40
Cambodia civil servants
0.0%
0.0%
0.0%
60.0%
70.0%
80.0%
80.0%
80.0%
China (without saving pillar)
0.0%
0.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Korea (ultimate)
0.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Lao PDR private
7.5%
15.0%
22.5%
30.0%
37.5%
45.0%
52.5%
60.0%
Lao PDR civil servants (previous)
0.0%
0.0%
0.0%
0.0%
75.0%
80.0%
85.0%
90.0%
Lao PDR civil servants (reform)
0.0%
0.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Mongolia
0.0%
0.0%
0.0%
45.0%
52.5%
60.0%
67.5%
75.0%
Philippines civil servants
0.0%
0.0%
37.5%
50.0%
62.5%
75.0%
87.5%
90.0%
Philippines private-sector workers
0.0%
43.3%
43.3%
46.4%
57.2%
68.1%
78.9%
89.7%
Thailand civil servants (without saving pillar)
0.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
70.0%
Thailand private-sector workers
0.0%
0.0%
20.0%
27.5%
35.0%
42.5%
50.0%
57.5%
Viet Nam males
0.0%
0.0%
45.0%
55.0%
65.0%
75.0%
75.0%
75.0%
Viet Nam females
0.0%
0.0%
45.0%
60.0%
75.0%
75.0%
75.0%
75.0%
42
4.
Country examples
43
4.
1.
Country examples
Korea, Japan
Challenges:
(1)
How to cater for ‘coverage gaps' of insurance
(2)
How to make existing systems financially
sustainable in the super-aging society, with a
broad
consensus of the adequacy of social
security
pensions, expressed mainly as the
replacement
level and the contribution rate /
cost on tax-financing
Korea:
Direct reduction of replacement level
accepted in society (to 40% ultimate)?
Future increase in the contribution rate,
pensionable age?
44
4.
2.
Country examples
Thailand, Philippines
Coverage: still to be improved
Civil servants' pensions:
Too generous in replacement level, pensionable
too low
ages
Private-sector workers' pensions
Philippines: too generous
Thailand: modest, low retirement age
Final 5-wage calculation to be reformed
Contribution rate to be gradually increased
46
4.
2.
Country examples
Transition countries (Mongolia, Viet Nam, Lao PDR)
Coverage:
Still to be improved, especially stronger enforcements
necessary to private-sector workers
Earnings-related pensions for both civil servants and
private-sector workers (Mongolia, Viet Nam):
Normal retirement ages to be increased, equalized
between
men and women.
Early retirement to be gradually abolished.
Structurally high replacement level to be rationalized.
Past liabilities (before 1995) to be sorted out by
taxation
revenues.
Contribution rates to be rationalized with the reform of
past liabilities.
47
4.
2.
Country examples
Transition countries (Mongolia, Viet Nam, Lao PDR)
The range of wage for contribution to be wider, with
compliance.
Realistic phasing-in of NDC in Mongolia (for those
after 1960) to be considered and established.
Lao PDR:
Extension of coverage of private-sector scheme to
PDR (now only in three Provinces)
Gradual and continuous reform of civil servants;
(like Vietnam and Mongolia)
better
born
all Lao
scheme
48
Past liabilities of non-contributory civil service pensions
Insurance period
Pensions awarded before
1995
Pensions awarded after
1995 but with the period
before 1995
Pensions only with the
period after 1995
Year
1995
49
4.
Country examples
3.
Countries with provident funds
(Indonesia, Singapore, Malaysia)
Improvements of compliance, especially Indonesia
47% of wage earners covered).
(only
Fundamental problems of benefit adequacy (mainly lumpsum payments), especially without basic-tier pensions even
for wage earners.
Premature withdrawals prevalent for housing and
education (some measures are being taken for preventing
early withdrawals, e.g. Singapore /
Malaysia).
50
5.
Remarks on pensions
1.
Basic-tier pensions is lacking in developing countries
in Asia and this needs urgent attentions and remedies
(social pensions?).
2.
Earnings-related pensions need future gradual
reforms of key system parameters, seen as in many
developed countries.
3.
Governance issues are also important, such as more
strict compliance measures to be taken and the
abolishment of early retirement provisions.
4.
Transition issues such as the past liabilities for civil
servants need special attentions of schemes of
transitional countries (e.g. Viet Nam, Lao PDR).
51
5.
Remarks on pensions
5. Provident funds need strengthened measures of
preventing early withdrawals and of facilitating
annuitization.
6. Other social security provisions, such as health care,
invalidity and survivors‘ pensions (and elderly care finally)
should be also taken into account from both angles of
adequacies of benefits for the elderly including old-age
pensions and the cost of the overall packages.
7. No drastic changes seem to take place on the
fundamental structure of existing (earnings-related)
schemes (e.g. DB / DC of earnings-related tier.). Gradual
reforms will be the demands of developing countries and
developed countries can contribute by sharing experiences
and provide support / advice.
52
6.
Health care as a core component of social
security
1.
Poverty and health
•
•
•
20% of the world population lives in abject poverty.
80% of the world population does not have access to adequate
social protection, most of them live in social insecurity.
Every year 100 million people globally are forced into poverty by
health care costs.
Worldwide, 178 million people are exposed to catastrophic health
costs.
=>Notorious vicious circle of poverty and health
2.
People’s high demands in health
3.
Large segment of workers still non- labour wage earners, low
affordability of non-covered population and difficulties of
administration of self-employed persons and farmers
=>limitations of voluntary insurance coverage, roles of tax-financing
53
essential.
•
•
54
55
Thailand Social Protection Needs
56
Thailand household income distribution
57
Composition of health spending - 2001
Data estimated unsing average annual exchange rate - Timor Leste not included
Taxes
Social health insurance
Out-of-pocket spending
Other private expenditure
Private health insurance
100%
80%
60%
40%
20%
0%
AFR
AMR - USA
EMR
EUR
SEAR
WPR
OCDE - USA
AFR: Africa, AMR: Americas, EMR: East Mediterranean, EUR: Europe, SEAR:
South East Asia, WPR: Western Pacific
Source: NHA Unit, EIP/FER/RER, World Health Organization
USA
58
Experience of Social Health Protection of
Asia-Pacific
Successfully in achieving
(quasi-)universal coverage
Poor and informal
economy not covered
Australia
New Zealand
Japan
South Korea
Malaysia
Thailand
Mongolia
Sri Lanka
China
India
Indonesia
Cambodia
Lao PDR
59
Sources of healthcare financing in selected AsiaPacific countries (2004)
Japan
Tonga
New Zealand
Samoa
Australia
Mongolia
Thailand
Fiji
Malay sia
Republic of Korea
Uzbekistan
Sri Lanka
Ky rgy zstan
Philippines
China
Indonesia
Singapore
Bangladesh
Viet Nam
Nepal
Cambodia
Tajikistan
Laos
Pakistan
India
Af ghanistan
My anmar
0%
20%
40%
Ge ne ral re ve nue Social ins urance
60%
80%
100%
Out-of-pock e t Private ins urance Othe r
WHO World Health Statistics 2007
60
Public / private health expenditure per capita
(OECD countries)
61
Formal coverage in social health insurance protection in selected countries of Africa and Asia
Country
China
India
Indonesia
Kenya
Lao People's
Democratic Republic
Mongolia
Philippines
Senegal
Insurance schemes
–
–
–
–
–
–
–
–
–
–
Urban workers
Basic insurance
RCMS (new)
EISIS
CGHS
CBHI
ASKES
JAMSOSTEK
CBHI
NHIF
–
–
–
–
CCS
SSO
CBHI
National scheme
–
–
–
–
Phil Health
CBHI
IMPs
MOH
Estimated formal coverage
( in % of total population)
10
20
20
7
5
78
70
11.4
62
Source: WHO
63
Source: WHO
64
Source: WHO
65
Source: WHO
66
Source: WHO
67
Source: WHO
68
Source: WHO
69
Source: WHO
70
6.
Health care as a core component of
social security
- Basic health care, basic education, basic income
protections are public goods and hence Governments
have a responsibility for financing and controlling.
- Public spending (social insurance / taxation) is
majority for countries with high levels of coverage.
- Taxation / compulsory insurance coverage are the
only ultimate ways of achieving universal coverage
with adequate redistribution to make health care
affordable for poorer segment of the population.
- Tax spending plays a major role even in countries
with social insurance, especially, to cover selfemployed, farmers (substantial subsidies) and the poor /
social assistance groups (fully paid).
71
6.
Health care as a core component of
social security
- Social insurance, even though covering only wage earners,
can free up the tax resources for poorer segment of the
population (Thailand UC).
- In the process of extension / improvement, voluntary
insurance coverage / donor assistance can play roles, but
not permanent / significant in the future.
=> Do we have credible / realistic ‘exit’ strategies for specific
low-income countries?
- Private medical providers can play roles in providing
health care under social insurance schemes (Japan, Korea) /
tax-financed schemes (Thailand), but needs strong
Government controls on fees / pricing / provider payments.
72
Can we speed up the process?
73
7.
Employment injury insurance (EII)
- Many insurance-group countries as well as ‘Anglo-Saxon’
group (e.g. Australia, New Zealand) have EII to provide cash
compensations (disability / survivors pensions) as well as
medical care in case of occupational accidents / diseases.
- Indonesia has an insurance scheme, but cash
compensations are still in the forms of lump-sum, not
pensions.
- Many ex-British colonies (e.g. Pacific countries) rely on
direct compensations / voluntary insurance companies,
often leading to non-payments in case companies cannot
pay or non-coverage in case private insurance companies
are not willing to cover them (high-risk industries).
- Malaysia has a fairly advanced scheme regardless of their
‘grouping’.
- Better linkages of preventions / compensations /
74
rehabilitations are still challenges.
7.
Employment injury insurance (EII)
- Contribution rate maximum 1-2% on average.
- Many countries cover commuting accidents.
75
EII scheme in Asia and the Pacific
Employer’s liability (direct payments / voluntary private insurance)
Fiji, Kiribati, Sri Lanka
Employer’s liability (compulsory private insurance)
Brunei, Hong Kong, Papua New Guinea, Singapore, Solomon Islands
Social insurance (Risk pooling)
Cambodia, China, India, Indonesia, Japan, Korea, Malaysia, Mongolia,
New Zealand, Pakistan, Philippines, Samoa, Thailand, Viet Nam
76
1. Administrative organization
Country
Institution
Supervision
MHRSS
China
Social Insurance Agency (SIA)
Indonesia
Employees
Social
(JAMSOSTEK)
Korea
Korea Workers’ Compensation and Welfare
Service (COMWELL)
Lao PDR
Social Security Organization (SSO)
MLSW
Mongolia
Social Insurance General Office (SSIGO)
MSWL
Malaysia
Social Security Organization (SOCSO)
MHR
Philippines
Employees’ Compensation Commission
DLE
Thailand
Social Security Office (SSO)
MOL
Viet Nam
Vietnam Social Security (VSS)
Security
System
Mostly administrated by public institution with Government guarantees.
Private insurance :
Tends to avoid coverage of high-risk industries.
Tends to provide lump-sum payments
instead of periodical payments with proper indexation / adjustments.
MOMT
MOL
MOLISA
77
2. Coverage
2-1
Country
Covered workers
Coverage in Law
China
Employees in all enterprises in China, Self-employed persons
Indonesia
Establishments with 10 or more employees or a monthly payroll of
Rp 1 million or more
Laos
Employer with 10 or more employees (to be amended to 1 or more)
Malaysia
Employees earning M$ 3,000 or less a month
Mongolia
Paid employees, voluntary coverage of self-employed
Philippines
Employee, not older than age 60
Thailand
Employees of industrial and commercial firms
Viet Nam
Employee with contract of at least 3 months
Historical development:
specific occupational groups initially such as mining →
gradually and progressively extend coverage into other sectors.
78
2. Coverage
Coverage rate
2-2
Country
China
Indonesia
Malaysia
Mongolia
Thailand
Viet Nam
Year
Labour force
(millions)
No. of
insured
(millions)
Coverage
rate (%)
GDP per
capita (USD)
a
b
C=(b/a)x100
d
2004
775.4
68.45
8.8
1,486
2005
782.7
84.78
10.8
1,716
2004
106.2
7.81
7.4
1,187
2005
108.3
7.83
7.2
1,304
2004
10.7
4.56
42.6
4,898
2005
11.0
4.88
44.4
5,288
2006
10.4
4.28
41.0
1,216
2004
35.2
7.38
21.0
2,479
2005
35.7
7.72
21.6
2,710
2003
42.5
5.39
12.7
490
2004
43.6
5.83
13.4
555
79
Source : Labour force: ILO, No. of insured: country reports, GDP per capita (current price): IMF
3. Contribution rate
3-2
Country
China
Indonesia
Korea
Comparison of contribution rate by countries
Rate
Uniform / industrial / Merit
0.90% (average) Industry-wise + Merit rate
0.24 -1.74 %
0.5 % - 61.1%
1.78% (average)
Funding
Partial
Rates for five groups (I - V)
Full / PAYG (due to
lump-sum system)
Industry-wise + Merit rate
Partial
Lao PDR
0.50%
Uniform rate
Partial (PAYG in
principle)
Malaysia
1.25%
Uniform rate
Full
Industry rate (rough
classification, 3%, not
enforced)
Partial
Uniform rate
Partial
Industry-wise + Merit rate
Partial
Uniform rate
Partial
Mongolia
1.0, 2.0, 3.0%
Philippine
s
1.0%
Thailand
0.2 - 1.0%
Viet Nam
1.0%
80
4. Benefits
Survivor benefit
4-3
Country
Survivor benefit
Funeral allowance
Spouse : 40% of wage
China
6 months of
average wage
Other dependant : 30% of wage
local
Maximum : 100% of wage in total
Indonesia
48 months salary (lump sum) + 200,000
Rp 2,000,000
for 24 months
Spouse: 50% of earnings
Orphans: 15% for each, 20% in the case
of no spouse (Max. 60% in total)
Lao PDR
6 months of individual
Parents : 50 % of wage in case no other average wage
beneficiaries exist.
Total maximum:
benefits
Korea
permanent
disability
52% (single survivor) - 67% (additional 3 120 days (4 months) of
or more survivors) of average wage
individual average wage
81
4. Benefits
4-3
Country
Survivor benefit
Survivor benefit
Funeral allowance
Malaysia
90% of the wage (split into 6/10 for spouses
and 4/10 for children)
+ 10% supplement for children
M$ 1,500
Also paid to parents and young unmarried
dependent brothers / sisters in the absence
of widows / orphans
Mongolia
50% of wage for one dependent, 75% for two
and 100% for three and more
Philippines
Permanent total / partial disability benefits
+ 10% addition of each child
10,000 pesos
Thailand
60% of wage up to 8 years
100 × minimum
daily wage
Viet Nam
50% of minimum wage for each up to four
dependents
10
months
minimum wage
Lump sum: monthly wage X years of
contributions
of
82
4. Benefits
4-4
Country
Commuting accidents coverage (Y/N)
Coverage (Y/N)
Remarks
Cambodia
Y
-
China
Y
-
Indonesia
Y
-
Korea
N
Only in case of vehicles provided by
companies covered.
Lao PDR
N
-
Malaysia
Y
-
Mongolia
Y
-
Philippines
Y
-
Thailand
N
Vietnam
Y
Only in case of vehicles provided by
companies covered.
-
83
8.
(Un) employment insurance (U(E)I)
- Schemes are still limited to developed countries
and socialist countries.
- Japan, Korea: advanced EI, linking cash
compensations with job services and vocational
trainings (active labour market policies)
- Australia, New Zealand: tax-based social assistance
type of EI (relatively low benefits with means test, back
to work policies)
- China, Mongolia, Viet Nam (introduced in 2009): EI
with some linkages of compensations with job services
and vocational trainings
- Other countries still rely on severance payments,
unreliable in case of economic downturns with
bankruptcies / insolvencies of companies
- Linkage between compensations and active labour
84
market policies important.
9.
Concluding remarks
(1) Toward universal coverage of basic social security
In many developing countries, the basic-tier income /health security is lacking
and needs consideration, including modest-level tax-based non-contributory
systems.
(2) Reform of present systems
In developing countries, present systems are mainly targeting the formal sector,
except for public health care provisions seen in ex-British colonies and
Thailand Universal health care and some initiatives of tax-based pensions /
health care for the poor.
Tendencies of not doing drastic reforms of existing schemes in Asia.
With regards to existing systems, realistic movements would be gradually
reforming existing systems into a better shape.
(3) Mutual exchanges toward better social security systems
In both aspects, mutual exchanges and also learning the history of developed
nationals will become more important.
85