Political economy of Thailand's tax-financed universal coverage scheme

Abstract

Problem:

The challenge of implementing contributory health insurance among populations in the informal sector was a barrier to achieving universal health coverage (UHC) in Thailand.

Approach:

UHC was a political manifesto of the 2001 election campaign. A contributory system was not a feasible option to honour the political commitment. Given Thailand’s fiscal capacity and the moderate amount of additional resources required, the government legislated to use general taxation as the sole source of financing for the universal coverage scheme.

Local setting:

Before 2001, four public health insurance schemes covered only 70% (44.5 million) of the 63.5 million population. The health ministry received the budget and provided medical welfare services for low-income households and publicly subsidized voluntary insurance for the informal sector. The budgets for supply-side financing of these schemes were based on historical figures which were inadequate to respond to health needs. The finance ministry used its discretionary power in budget allocation decisions.

Relevant changes:

Tax became the sole source of financing the universal coverage scheme. Transparency, multistakeholder engagement and use of evidence informed budgetary negotiations. Adequate funding for UHC was achieved, providing access to services and financial protection for vulnerable populations. Out-of-pocket expenditure, medical impoverishment and catastrophic health spending among households decreased between 2000 and 2015.

Lessons learnt:

Domestic government health expenditure, strong political commitment and historical precedence of the tax-financed medical welfare scheme were key to achieving UHC in Thailand. Using evidence secures adequate resources, promotes transparency and limits discretionary decision-making in budget allocation.