Cyprus introduces a new national health system

The government of Cyprus is finally implementing a national health system, known as GESY or General Health Scheme (GHS), after almost two decades of negotiations. In late 2017, the Cypriot government passed the general health system law establishing central public healthcare funding. GHS will be funded with compulsory contributions from employers and employees, the government, the self-employed, pensioners and all categories of income-earners. GHS will be implemented on 1 June 2019. However, as of 1 March 2019, payment contributions to GHS are already being collected.

Background

According to the Organization for Economic Cooperation and Development (OECD), Cyprus has the highest share of out-of-pocket healthcare expenditures in the European Union (EU). There is a need for equal access to healthcare services; Cyprus currently faces long waiting lists for care and there is a lack of coordination between public and private sector health services resulting in the duplication of infrastructure, waste of resources, lack of health data and lack of transparency. In the current healthcare system, fees are based on user income categories due to a lack of central public funding.

Key Details

Eligibility

GHS is intended to be a universal healthcare system. Most services will be free and only some services will require co-payments up to an annual cap, thereby lowering out-of-pocket expenditures and increasing public health support. Cypriots, EU citizens, permanent residents, family members of citizens and permanent residents, refugees and persons with a status of supplementary protection will be eligible to receive services through GHS.

Administration

The Health Insurance Organization (HIO) is responsible for the implementation and management of GHS. The HIO will maintain a registered provider list for patients to choose from. To access GHS services, Cyprus citizens must (opens a new window) register, either online or in person, and choose a personal primary doctor from the HIO list.

Contributions

Beginning 1 March 2019, employers must contribute 1.85% and employees must contribute 1.7% of the employee’s earnings to the GHS. On 1 March 2020, the contribution rates will increase to 2.9% for employers and 2.65% for employees. No contributory wage ceiling has yet been announced. The employer is responsible for managing the contributions for both parties through payroll deductions.

Implementation timeline

GHS will be implemented in phases. Phase one, to be completed by 1 June 2019, will make outpatient health services accessible, including personal doctors, specialists, pharmaceuticals and laboratories. Phase two will engage inpatient care, accident and emergency care, nurses, midwives and Allied health professionals, preventative dental care, palliative care and rehabilitation. The services in phase two are expected to be fully implemented by 1 June 2020.

Next Steps

Employers and employees should review contribution changes with their payroll provider and prepare for the higher payroll costs to come. The expectation is that once GHS is fully functioning in June 2020, out-of-pocket healthcare costs will decrease. This could impact the private insurance market as there may be a reduced need for private health insurance depending on future HIO standards and regulations.