Over a Decade of Impact on Care and Coverage

By: Eustoria Maria Borja

The Healthcare Financing Act, known as RPPL 8-14, has provided Palauans with a decade of health coverage since its enactment in 2010. Under the act, employers contribute 2.5% of employees’ wages into the National Health Insurance (NHI) fund and another 2.5% into individual Medical Savings Accounts (MSAs). By 2023, 92% of Palau’s population was insured through the NHI, with even more citizens enrolled in MSAs.

At this year’s Pacific Basin Medical Association (PBMA) conference—held for the first time since the pandemic—the Healthcare Financing Act was highlighted as a regional model for addressing non-communicable diseases (NCDs). The conference, which began in 1995, brought together health professionals to tackle pressing health issues in the Pacific Islands, such as obesity and other NCDs. Palau’s healthcare initiative was praised for improving access to care and enhancing referral services.

Financial challenges arose during the COVID-19 pandemic, but the program bounced back, drawing down $2.1 million in 2023. The act also provides government subsidies for retirees and disabled individuals, funded by excise taxes on alcohol and tobacco.

One of the program’s growing challenges is the increasing demand for off-island care. Since 2011, the number of medical referrals and the associated costs have surged, peaking in 2022 and 2023. Referrals primarily went to healthcare facilities in the Philippines and Taiwan, reflecting Palau’s partnerships with these nations for critical medical services. The total cost of off-island referrals exceeded $28 million. Tragically, 467 patients passed away during treatment, and repatriation costs for 45 of these cases amounted to more than $1.2 million.