Palau National Health Insurance (NHI) expenses have grown over the years, exceeding contributions in the last three (3) years. The contributions from NHI members have been growing, but expenses now match and exceed contributions, especially in the last three years.
The Health Care Fund report submitted to the Senate Committee on Health and Social Welfare revealed that contributions to the National Health Insurance was $4.1 million in 2020, $3.8 million in 2021, $4.2 million in 2022, and $4.1 in 2023. The same report also showed that $2.8 million was paid out in 2020, $3.4 million was paid out in 2021, $4.2 million was paid in 2022, and $4.5 insurance expense was paid out in 2023. In other words, in 2023, National Health Insurance received $4.1 million in insurance contributions and paid out $4.5 in insurance expenses, surpassing the contributions.
The national insurance income comes from member contributions as well as returns from investments in the stock market. The investment income adds to contributions, supporting the insurance program. The investment income was also increasing each year, with $707 thousand in 2019 and up to $2.7 million in 2021, but due to the world market performance, it dropped by -$4.2 million.
Total NHI Funds invested in the market in 2023 is $15.7 million, down from $20.6 in 2021.
With only 15 thousand members and the increasing cost of medical services, Palau National Health Insurance is vulnerable and could face similar financial challenges as the Palau Pension Plan and Palau Social Security Administration. National Health Insurance (NHI)contributions pay for inpatient and medical referral expenses, and a Medical Saving Account (MSA) pays for outpatient expenses such as medicines and services, including local medical clinic expenses