The bleeding budget of Aasandha

Aasandha expenditure has exceeded its budget, as it has reached a total of MVR 874.6 million as of July this year.

Despite all the difficulties Maldivians have in terms of their way of life, finances, or even their economic situation, there is one thing for which we can all express some gratitude: medical insurance is readily available in the Maldives. Many people still have hope for the Maldivian healthcare business because we still do not pay a significant amount of money when it comes to medical bills, even though we may not have access to the greatest medical facilities, doctors, or surgeons. The reality of how high the expense of medicine actually is, however,  is brought home for many when the best medical care is not offered in the public hospitals and the only option is to visit an expensive clinic or pay for medications that are not covered by the Aasandha insurance.

Budgeting Aasandha

Aasandha company, which was first introduced in 2011 to oversee and manage the national health insurance program, presently known as "Husnuvaa Aasandha," by facilitating all Maldivians' access to inexpensive and free medical care.

While Aasandha initially had a limit of MVR 100,000, with the introduction of ‘husnuvaa’ (unlimited) Aasandha, it is now unlimited. However, Aasandha is limited to certain procedures and certain medication that is listed under this health insurance scheme, the rest of the cost has to be borne by the citizens themselves.

However, just like any other government scheme, this ‘limitless’ Aasandha scheme also has an allocated annual budget. While the usual budget for Aasandha is at MVR 2 billion annually, the Ministry of Finance made an announcement in 2021 regarding their plans to cut costs when it comes to medical expenditure in the Maldives.

With these plans in mind, the budget allocation was set at MVR 730.9 million. However, things do not seem to be going according to plan as the Aasandha expenditure had exceeded its budget by a lot as it had reached a total expenditure of MVR 874.6 million as of July this year. If we have exceeded the amount of Aasandha by this much already, it makes many people question when the government will reach their tolerance level and if ‘Husnuvaa Aasandha’ is truly as unlimited as they say it is?

Why did the plans to cut costs fail?

After seeing these numbers, many would definitely start speculating as to what caused the budgeting to fail if the Ministry of Finance had already planned to decrease expenditures but failed so drastically so quickly.

The initial strategy of the Ministry of Finance for cost-cutting involved imposing a price cap on 357 medications that were on the Maldives Food and Drugs Authority (MFDA) Essential list. This price cap was estimated to result in an MVR 205 million reduction in the cost of Aasandha. Additionally, medical institutions in the Maldives were urged to prescribe generic medications - using their chemical identities rather than their brand names -  in order to offset the high costs of drugs sold under particular brand names.

But it quickly became clear that these budgeting strategies were not working as intended in the beginning of 2022 as the price ceiling was still not set. This resulted in the plans being postponed from January 2022 to March 2022.

In addition to setting a price ceiling and using generic medication, the government also decided to impose a fine on the pharmacies that do not follow the regulations. The initial fine is MVR 10,000 for the first offense, MVR 50,000 for the second, and between MVR 50,000 - MV 100,000 for the third offense.

In addition to all these rules and regulations, the Aasandha company had also launched an application ‘Vinavi’ so that the citizens can compare original prices to that of the market price. This was also done in order to further try and manage the price of medication being sold in the Maldives. After the launch of this application, many finally became aware of the high costs of medicine in the Maldives, which we were unaware of earlier.

With the Ministry of Health stating that pharmacies could charge a maximum of 100 percent of essential medicine, the price both the Aasandha health insurance and occasionally what the people were paying for medication were increasingly high compared to the original sale price. Many citizens found this to be enlightening as they discussed the price discrepancy between the initial pricing and the market price on social media, eventually coming to the conclusion as to why such a  huge budget had to be set aside for the Aasandha budget. This also answered the question as to why a price ceiling needs to be set so that the government could cope with the budget allocation for Aasandha.

And so, many expected this price cap to be in place earlier this year after all the discussions that took place, including the Ministry of Finance submitting information to the Parliament regarding the need to set the price ceiling for medications and all of the cost-cutting that has been going on this year.

However, the government-appointed deadline has already gone without any word of the price ceiling being set. It is important to question why the government has not yet moved to create a price cap for medications given the extensive cost-cutting measures it has implemented this year in response to domestic and international economic difficulties.

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