Government says full General Health Insurance rollout by January 2027 no longer feasible

GREAT BAY----Government has acknowledged that full implementation of General Health Insurance, GHI/SAAHA, by January 1, 2027, is no longer considered feasible, although a phased introduction of the new healthcare system could begin from that date.

The confirmation was provided to Parliament as part of government’s responses to questions submitted in preparation for the 2026 budget debate. The Ministry of Public Health, Social Development and Labor, VSA, said significant work on GHI was completed during 2025, but several legislative and governmental steps remain before the system can be fully implemented.

Government is targeting October 2026 for the GHI legislation to reach Parliament. Budget 2026 contains approximately Cg 1.7 million for work associated with the reform, including Cg 800,000 for preparation and approval of the legislation, Cg 117,000 for a public awareness campaign and Cg 776,000 for project coordination.

The Ministry said the legislation is currently in the final phase of the legislative trajectory. The Council of Advice has already issued its advice, and VSA is preparing the Further Report.

Once that report is completed, the package must still be considered and approved by the Council of Ministers, submitted to the Governor for onward transmission to Parliament, and then debated and approved by Parliament. Full implementation remains dependent on completion of those steps.

While January 2027 is no longer considered realistic for complete implementation, government said phased implementation could commence at that time, with the details still to be worked out between government and the agencies that would execute the system.

The proposed GHI system is intended to significantly broaden the number of people contributing to healthcare financing.

Government confirmed that the reform is examining contributions from higher-income earners who currently fall outside the public healthcare system. The underlying principle, according to the Ministry, is that people with the ability to contribute should do so in order to establish a more equitable and financially sustainable system.

The proposed legislation also provides for self-employed persons, independent contractors, sole proprietors, consultants and people who do not work under traditional employer-employee arrangements to participate in the healthcare contribution system.

Government is also examining how workers in sectors such as construction, transportation and hospitality can be incorporated. However, no separate contribution model has yet been approved for individual sectors.

Registration, income assessment, contribution collection and enforcement mechanisms for people with irregular or non-traditional income will still have to be further developed as part of the GHI implementation framework.

The financing model is based on shared responsibility among employers, employees, self-employed persons and government. Government would also remain responsible for financing categories of residents for whom it has a statutory obligation. The precise contribution rates and arrangements are contained in the proposed legislation and will ultimately require Parliament’s approval.

The Ministry also gave Parliament a clear assessment of the current healthcare financing system, stating that it cannot be considered financially sustainable over the long term without additional revenue, significant reductions in expenditure, or a combination of both.

Government cited an ageing population, chronic diseases, advances in medical technology, pharmaceutical expenses, overseas medical referrals and growing demand for healthcare services among the factors putting greater pressure on the system.

At the same time, government said the existing financing structure remains fragmented and does not collect contributions from everyone who uses, or should participate in, the healthcare system.

Government stressed that its approach does not necessarily mean simply requiring existing contributors to pay more. Instead, the objective is to spread responsibility across a broader group while simultaneously controlling healthcare costs.

Cost-control measures include strengthening primary and preventive healthcare, improving controls on pharmaceutical expenses, reducing avoidable overseas referrals and hospital admissions, strengthening governance and ensuring timely collection of existing healthcare contributions.

The complete financial model underpinning GHI has not yet been provided to Parliament.

Government said the model will accompany the draft legislation once it reaches Parliament. Financial projections are based on a prognosis model initially developed in 2019 by World Bank health economists and updated in 2022 following the COVID-19 pandemic.

The model was later updated using validated 2023 information from SZV, the Tax Administration and Ministry of Finance, Census 2022 data, information related to the new hospital business case and projections for economic, wage and income development.

The Ministry also confirmed that no actuarial study was undertaken as part of developing or updating the GHI financial model. The updated projections and conclusions concerning GHI’s expected financial sustainability are to be presented to Parliament with the legislation.

Government told Parliament that structural deficits in the health and social insurance funds require comprehensive reform and warned that postponing changes will increase pressure on both the funds and the national budget.

The healthcare and social funds have recorded average deficits of approximately Cg 50 million over five years, according to the parliamentary questions addressed by the Ministry. Government said operational improvements and cost-control measures alone cannot solve the structural problems affecting healthcare financing.

Among the measures being pursued separately from GHI are pharmaceutical cost controls, stronger primary and preventive healthcare, implementation of the National Mental Health Vision, establishment of a Healthcare Professionals Register and programs aimed at reducing non-communicable diseases.

The Pharmaceutical Cost Containment Program is expected to eventually generate savings of approximately 20 to 30 percent on pharmaceutical expenses once fully legislated. For 2026, SZV has incorporated 10 percent of the expected savings because the full legislative changes are not yet in place.

VSA also acknowledged that major staffing shortages could complicate implementation of the healthcare reform agenda.

According to the information provided to Parliament, Public Health is operating at approximately 50 percent occupancy while Social Development is at approximately 40 percent. The Ministry acknowledged that the vacancies place additional strain on existing personnel and affect its ability to implement major reforms.

The Ministry said it is responding through phased implementation, temporary project financing, technical assistance, targeted recruitment and cooperation with local and international partners.

Government nevertheless maintains that structural healthcare reform remains unavoidable.

Should Parliament reject GHI, the existing fragmented healthcare financing system would remain in place, including the unresolved issues surrounding uninsured residents, unequal coverage, the contribution base and the long-term financial condition of the health insurance funds.

For now, government’s immediate target is to get the GHI legislation before Parliament during 2026, with October identified as the target month, while preparing for the possibility of beginning a phased rollout from January 2027 rather than the full implementation originally envisioned.

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