By: Tahani al-Sabri
Insurance experts, businessmen, and many concerned people all will confirm that Yemen’s insurance sector is facing a number of obstacles and difficulties all impacting its ability to implement effective legislation.
Hamed, age 5, is currently receiving care in the Algomhoria Hospital in Aden. For weeks he has been battling with blood and spleen cancer. His suffering has been doubled by the inability of his poor family to pay for his medical expenses.
For decades, the Yemeni government has held the slogan, “health for everyone.” This slogan has now become a sad joke, evidence of the government’s failure to provide even the simplest services.
According to Ridwan, “it is a shame and an unfortunate truth that we are celebrating the 50th anniversary of the Yemeni revolution with a trinity of poverty, illness, and ignorance and illness is still weighing upon us, despite the annihilation they seem to presage.” He pointed to the absence of official concern for public servants, to say nothing of the citizens themselves.
The monthly value of the medication administered to government employees does not exceed 2000 rials, the equivalent of 10 US dollars.
The medical bill is a dilemma for millions of Yemenis and a political pain for those betting on the government’s role in providing basic services. In the south, where socialist rule prevailed until 1990 with free health care provided by the government, the question of social welfare is a nostalgic issue. It is also yet another argument wielded by the separatist movement, who use it to demonstrate the superiority of the former southern state.
In addition to limited medical coverage, the Yemeni health system is suffering from a lack of quality standards and absence of equality in distributing medical services. Moreover, with the rapid spread of poverty and unemployment—the latter is estimated to effect among 70% of the Yemeni population—the likelihood of hospitalization is becoming a headline of human tragedy in Yemen.
Finally, due to high prices of pure, original medicines, many poor families are forced to buy altered, distilled, or otherwise adulterated medicinal products.
Some families find they have to check their loved ones out of the hospital before treatment is complete due to their inability to continue paying for his hospital stay. In some alarming cases, public and private hospitals have been known to hold patients and bodies of the deceased until families paid their medical bills in full.
Fake or adulterated medicine are also being circulated on a large scale in Yemeni markets these days, which lead to many serious side effects, and in some cases death. The reputation of Yemeni hospitals is deteriorating as thousands of patients are forced to travel outside of the country to seek adequate treatment in other Arab or foreign countries. This has made the problem of the escalating cost of medicine abroad yet another issue facing the Yemeni government. It doubles one’s hurt when he must lose both a patient and money as well.
An official in the Ministry of Health recently made a statement on a new draft law on health insurance prepared by the Ministry. The new law relies on a comprehensive approach to improve the existing health insurance institution, which currently collects 14% of the salary of each employee, public and private, and then treats insured people however it decides to.
“If such a law is legislated, it will fail upon application. This is what I have said, and I will continue to say it throughout the interviews and the articles as a historical and scientific testimony for upcoming generations. I take full responsibility for each and every word I say, where it is difficult for the government and health leaders to admit their responsibility for wrong decisions. After al, they will be future leaders when this grievous mistake committed against the citizens and the country is discovered.”
He also added that the draft law does not make any financial considerations, so it is easy to cut proportions from the salaries of employees on paper, just as it is easy to cut centrally from the public employee. But when it comes to collecting these proportions from various sectors, or providing proper health services, the government’s ability to accomplish these tasks is highly doubtful. This haphazard planning just confirms that the minister dealt with this issue randomly at worst and in an improvised fashion at best. Actually, the Ministry had already crafted a law even more unfair to the citizenry, even more discombobulated in design and random in financial planning. With the cooperation of our personal efforts and many concerned bodies, including unions and officials, especially the Ministry of Interior and the Labor Union, we were able to improve some elements of the law.
Where the institution was only committed to the individual employee, we were able to expand coverage to include the employee, his wife, and five children. The old law’s requirement of collection of 10% in administrative expenses has been emended to 3%, and 2% collected from salaries to handle work related injuries was reduced to 1%. Finally, citizens were initially supposed to participate in the covering of their health care payments by 33%. This was reduced to 20%
The question remains: how can we calculate the cost and benefit of any health care program without an accurate study? The Ministry with its limited resources does not realize that the financial effects upon each division, no matter how small it is. It was supposed to feel the need for financial analysis explaining the applicability of each division as though the Ministry has solely one goal in front of it, that goal being “protecting the new Health Insurance Law,” without pausing to ask whether the law was applicable or not.
The Secretary General of the Yemeni Union of Insurance Ali Mohammad Hashem indicated that regulating insurance laws required a liable institution for executing and committing companies , provided that the institution has the knowledge and ability to monitor the performance of the affiliated companies both financially and administratively. It also requires the authority to interfere and stop and that should be with administrative regulations made by the specialized ministries for explanation and clarification.
There are currently 13 companies working in Yemeni insurance. Together they established the Yemeni Union Insurance in the north, while the Mareb Insurance Company was the first ever such company in Yemen. There are now 16 insurance companies, whose offices are distributed between joint-stock establishments, governmental institutions and mixed companies. Expert insurance companies are considered to exist in large numbers in small market insurance. This has led some companies into weak financial situations affecting the completion and delivery of insurance services.
Dr. Abdukareem al-Saiagai, economic expert to Japan, demanded that a survey be taken within the insurance market to understand its characteristics and to integrate the various insurance companies. This will also allow it to find strong companies with the ability to enlarge and vary the insurance projects as well as work on finishing the development of judicial and executive work related to insurance.
He pointed out that the small size of the insurance market in Yemen reflects the general situation of the limited availability of insurance services and the lack of responsiveness to the special needs of the Yemeni consumer. According to statistics, the Yemeni Union Insurance and insurance industry in general has been able to acquire almost 45 billion rials during the 2002-2007 period, and fourteen billion rials in the year of 2008 alone.
These statistics also show that the total production of insurance companies rose from 5 billion and 790 million in 2003 to 12 billion and 360 million rials. On the other side of the coin, production means compensation, which has been the purpose of insurance for the past five years. So far, almost 30 billion rials have been paid by insurance companies.
A scientific study recently revealed the rate of growth of amounts paid by Yemeni insurance companies. This amount, it was shown, is greater than the rate of growth of the amounts obtained by premiums, That is, total compensation rose from 800 million rials in 1995 to 6.5 billion riyals recently; growth of 23%.
Dr. Shihab al-Macadam clarified that low awareness of insurance among the people is the fault of careless treatment by the insurance companies in defining the nature of insurance, its benefits and necessity. And the lack of enforcement by the government on the registration of citizens in insurance is another reason citizens stay away from it. He explained that Yemen has the lowest level of individual participation in the insurance industry, where individual contribution does not exceed 2 to 3 dollars a day. In some countries, these amounts reach up to $700 per year.
Tarek Abdwasea’a, the head of United Insurance, has seen that there are a lot of problems standing in the way of the insurance process. These problems include the absence of provisions for securing a national mechanism and the weakness of authorities and foundation members in promoting the importance of insurances. Furthermore, Yemen suffers from a lack of implementation of insurance laws and weak economic conditions in general.
Insurance companies complain as well that there is no imposition of insurance to keep the country’s economy intact. This effect spills over, damaging the national economy as well.
Abdwasea’a says that the lack of awareness among Yemen’s citizens can be associated with low income levels, which constitute a barrier to people’s learning about dealing with banks and restricts their access to insurance companies to cover their risks. “I consider United Insurance the first company in the Yemeni market with a market share of 43%. It was soon necessary to pay for compensation as soon as possible, which created an impression to injured people that they needed to have rehearsed the importance of being an important insurance essential. They grew to expect insurance companies to be highly effective and able to deliver results when accidents occur through compensation.
Regarding insurance for women, he added that since 1998 the company has paid equal blood money for women and men, “because we believe that both are spirits and that sometimes women play as important a role in society as men. If she died and she had children to raise, what can half of the blood money do to help them?”
Tarek also said that the future of insurance in Yemen is bright, so long as a Yemen’s economic position continues to progress. “It is impossible to truly separate insurance and economics, though, as they are nearly related to each other.”