Koror — D.K said she likely would not be up and walking about today if not for her health insurance coverage through the Health Care Fund — a program run by Palau government.
Four years ago, D.K had to be carried out from a small van into a wheelchair and carted off at the airport parking lot for what would be a four-hour flight to Taiwan for a surgery to remove a tumor in the 10th thoracic vertebrae — within the torso and making up the central portion of the spinal column. The condition had caused temporary paralysis to her lower body.
“I couldn’t walk and couldn’t even take care of myself,” said D.K, mother of five. She preferred to use her initials for this story. “I have a two-year old son that I can’t even take care of as well. It was a difficult time for me and my family.”
D.K is the family breadwinner, who works for the government as an administrative assistant. She took off on the China Airlines flight straight to Taipei, where she was accompanied by her family. The four-hour surgery successfully removed the benign tumor that pressed a nerve on the spinal column causing numbness to both legs.
Total cost of the off-island treatment was estimated at $17,345, which was assessed by the medical referral office prior to her trip. The national health insurance paid 80 percent of the estimated amount but not before her family came up with the required 20 percent, roughly $3,500. Without the health care fund, D.K. wouldn’t even have come close to raising a fraction of the full cost of the surgery, plus the two-week recovery period at Shin Kong Wu Ho-Su Memorial Hospital in Taipei.
D.K.’s medical trip, as with many others who have availed of the program, wouldn’t have been possible few years ago. Prior to the implementation of the government health insurance program, the cost of health care delivery in Palau was completely prohibitive and exacerbated by the rapid spread of non-communicable diseases that are too costly to treat. Before the establishment of the Health Care Fund seven years ago, the health care system had incurred a balance of more than $12 million in unpaid medical bills.
The Palau Health Care Fund was created in 2010 through the National Health Financing Act to provide health and social welfare through the individual mandate. It has two components: the National Health Insurance, which pool funds to cover in-patient and off-island referral costs; and the Medical Savings Account, which is geared toward medical checkups and out-patient services.
As designed, the law directly benefits the people by allowing them to manage their own medical savings and keep their medical expenses in check. At the same time, it helps the national government reduce large accounts of unpaid medical bills, thus alleviating the need for further subsidies because of its self-sustaining nature.
All employees in Palau are mandated to join the Health Care Fund program. Beginning Oct. 1, 2010, employers began withholding 2.5 percent of an employee’s earnings every pay period. Employers transmit employee shares, along with a matching employer share of 2.5 percent to the Social Security Administration at the end of every quarter. The self-employed are required to contribute 5 percent as they are considered both an employee and employer.
The employee’s 2.5 percent contribution goes into his or her Medical Savings Fund, which also covers designated beneficiaries. Account holders can also use their money to pay for premiums if they have private health insurance. The employer’s matching share of 2.5 percent goes into the pooled account under the National Health Insurance.
At the time of her medical referral, D.K’s paycheck deduction every pay period was $8.42 — a drop in the bucket compared to the total cost of her medical treatment off-island and her children’s constant trips to the hospital. “I have a two-year old along with four school age children who require medical attention more often than I want, and Medical Savings Fund has been a great help,” she said.
Currently, the Health Care Fund is breaking even at this point with an annual collection of $2.5 million and spending roughly the same amount. According to the 2015 medical referral program report — the latest since 2011— a total of 781 patients were sent off-island for medical treatment at a total cost of $7,106,137.
The Health Care Fund was set up to provide health insurance coverage to every person on the island. The fund has reached 95 percent coverage of the total population. “As of April this year, the program has coverage for 16,745 out of 17,661 people. The population is based on the last official census of 2015,” said Jarela Ngiraked, manager of Health Care Fund.
Ngiraked said a person 21 years old and above can no longer qualify as a beneficiary for coverage, so he or she has to be employed to be insured, unless they continue to be in school. The 21-year-olds and older who choose not to work are not covered by the program. However, Palau government is responsible to pay for the medical subscriptions for senior citizens — 60 years and older—who are not working or are disabled. From these subsidized payments, they will
be able to use the National Health Insurance for in-patient treatment and off-island referrals.
“We can say it’s universal,” said Ulai Teltull, Social Security administrator, who also administers the Medical Savings Fund and National Health Insurance.