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Dear
friends,
Thailand’s
social
security
system,
particularly
insurance
covering
health,
ageing,
unemployment,
and
income,
has long
been
characterized
by the
problems
of
inadequate
coverage,
low-quality
services,
and
unequal
benefits
and
distribution.
While
the
problems
of
inadequate
coverage
and low-quality
services
are
rather
well-known
complaints,
the
observation
that
Thailand’s
social
security
system
is
unjust
may
raise
quite a
few
eyebrows.
This is
because
our
common
perception
is that
the
disadvantaged
are
already
entitled
to
considerable
assistance.
The poor
receives
the 30-baht
healthcare
benefit.
The
destitute
elderly
gets a
stipend
of 300
baht per
month.
Other
deprived
villagers
are also
assisted
by
several
state
projects
funded
by tax
collected
from
those
with
higher
incomes.
The
reason
why the
present
social
security
system
should
be seen
as
unjust
is
because
there
are
still a
large
number
of
people
who can
afford
the pay-for-service
system
but do
not have
to pay
for
their
medical
bills.
This
applies
in
particular
to the
30-baht
medical
scheme
in which
some
well-to-do
patients
pay only
30 baht
per
visit—the
same
rate
that
poor
people
pay.
Another
aspect
of
unfairness
is the
biased
tax
structure
that
squeezes
every
ounce
from the
middle
class
taxpayers
while
leaving
the rich
and
those
‘outside
the
system’
with
ample
tax-evading
leeway.
Due to
the
above
observation,
I am of
the view
that
Thailand’s
social
security
needs to
be
reformed
in order
to
become a
high-quality
and fair
insurance
system
with
comprehensive
coverage:
a whole
new
redistribution
of
resources
across
sections
of the
populace--from
the
strong
to the
weak,
from the
rich to
the poor,
from the
young to
the
elderly,
and
across
the
timeline—from
the
present
to the
future.
The new
social
security
should
consist
of the
following
features:
1.
It
should
cover
all
categories
of labor,
both
within
and
outside
the
system.
Thailand’s
current
social
security
system
covers
only the
registered
labor
force
within
the
system
of
around
13.8
millions,
or a
mere 38
per cent
from the
total
workforce
of 36.3
millions.
In other
words,
there
remains
another
22.5
millions
outside
the
system
that are
not
covered
by the
present
social
security
scheme.
Although
the
‘outside-the-system’
workforce
is still
covered
by the
30-baht
medical
scheme,
they
face the
problem
of low-quality
health
service
that
does not
include
all
necessary
aspects
of
healthcare.
Besides,
the
sheer
number
of such
a
workforce
means
that
government
cannot
possibly
allocate
adequate
budget
for the
program.
In order
to
expand
the
social
security
system
to cover
all the
workforce,
it is
necessary
that
every
employee
be
required
to
register
in the
social
security
scheme
in order
to
prevent
adverse
selection.
This is
because
a
voluntary
system
would
attract
only
high-risk
groups,
such as
the
unemployed
or those
approaching
retirement,
which
will in
turn
result
in an
‘insecure’
social
security
system
with
high
spending
and not
enough
funding.
The
reason
why
those
with
high
income
do not
want to
enter
the
social
security
system
is
because
they
think
that
investing
in
private
life
insurance
or
savings
would
involve
lower
costs
but
yield
higher
gains.
In the
same way,
those
exposed
to a low
level of
risk may
not
enter
the
system
either,
as they
think
the
gains
would be
less
than the
loss.
With
those
exposed
to low
risks
and
having
high
income
refusing
to enter
the
system,
social
security
cannot
be
expanded
to cover
everyone
as it
would
not
resonate
with
insurance
principles
or new
ways of
resource
distribution.
Due to
these
reasons,
I think
all
employees
in the
workforce
should
be
registered
in the
social
security
system
to be
entitled
to
social
security
policy
that
covers
all
aspects
of the
benefit
and is
of the
same
standard
as that
of
services
offered
by the
present
social
security
scheme;
that is,
health
insurance,
ageing
insurance,
and
unemployment
insurance.
(Preferably,
the
social
security
number
could be
the same
as the
identity
card
number.)
2.
Social
security
premiums
should
be paid
according
to
levels
of
income.
Another
important
feature
of the
social
security
reform
is the
need to
ensure
that the
entire
workforce
chip in
to
contribute
according
to their
capacity,
with the
objective
being
that
every
worker
be
responsible
for the
reform.
This is
a
radical
departure
from the
universal
healthcare
scheme
of the
government
whereby
the
state
subsidizes
every
single
employee
without
taking
into
account
the
employees’
varying
abilities
to
contribute.
While
the
universal
scheme
may make
possible
a wide
coverage
and easy
access,
it is
constantly
bogged
down by
inadequate
budget
and
hence
low
quality.
The
requirement
that
employees
contribute
to the
scheme
according
to their
individual
financial
capacity
means
that an
effective
income
and
asset
assessment
mechanism
must
also be
in
place.
Unregistered
labour
must
notify
their
actual
income
and
asset
annually
at the
social
security
registration
office.
A random
check
must
also be
carried
out to
prevent
and
suppress
false
income/asset
notification.
Everyone
in the
workforce
should
contribute
to the
social
security
funds
according
to their
levels
of
income.
Those
with
higher
income
and
asset
should
pay more
than
those
with
lower
earnings
and
assets.
One way
to do
this is
to
stipulate
the
highest
and
lowest
threshold
levels
of
income
required
to
contribute
to the
fund so
that
those
with
higher
earnings
would
not have
to pay
too much
and
those
too
destitute
would
not have
to pay.
As such,
the rate
of
contribution
to the
social
security
fund can
be equal
to the
rate
paid by
those in
the
current
social
security
system;
that is,
those
with an
employer
must pay
5% of
their
earnings,
while
those
working
independently
must
cover
the part
otherwise
borne by
the
employer—which
is a
total of
10% of
their
earnings.
Members
can
choose
to make
monthly,
quarterly,
biannual,
or
annual
premium
payment
depending
on the
frequency
of their
income
and at
their
conveniences.
3.
Equal
benefits
and
entitlements
to
registered
employees
The
social
security
reform
should
not
focus
only on
compulsion.
Rather,
it
should
utilize
incentives
and
benefits
to
attract
members.
This is
because,
while
unregistered
members
entering
into the
system
will
have to
make the
premium
payment,
they
will
derive
much
more
benefits
than
they
presently
do under
the
current
system.
The
benefits
to be
gained
will
cover
all the
seven
areas
presently
applied
to
members
under
the
current
system
as
follows:
Social
security
payment
in case
of
illness
or
injuries.
There
are
three
levels
of
benefits
under
this
category.
Basic
Level.
For
those
with the
income
range
from 0
to 5,500
baht per
month,
the
government
will
allocate
the
health
benefit
payment
totaling
2,000
baht per
person/year,
which
means
better
quality
of
services
compared
to the
30-baht
medical
scheme.
Intermediate
Level.
For
those
with
income
range
from
5,501 to
20,000
baht per
month,
the
government
will
allocate
the
health
benefit
payment
totaling
2,001-3,000
baht per
person/year
depending
on the
income
level of
members.
Advanced
Level.
For
those
with
income
higher
than
20,000
baht per
month,
the
health
benefit
payment
of
3,001-4,000
baht per
person/year
will be
allocated
to
members,
again
according
to their
level of
income.
Child
Delivery
Benefit.
Members
and
their
spouses
will be
entitled
to the
child
delivery
benefit
totaling
10,000
baht per
member.
Child
Support
Benefit.
Members
with
children
aged
between
0-6
years
will be
entitled
to a
monthly
child
support
benefit
of 350
baht.
Compensation
Payment
for Loss
of
Income.
Compensation
payment
will be
made to
members
for loss
of
income
due to
temporary
unemployment.
Retirement
Benefit.
Retirees
will
receive
the
pension,
the rate
of which
is
calculated
from the
member’s
accumulated
premiums,
with the
minimum
benefit
payment
not
lower
than
1,200
per
month.
Unemployment
Benefit.
The
unemployment
benefit
will be
paid at
50% of
the pre-unemployment
salary
for
three
months.
The
social
security
fund
will
however
not hand
out this
sum
unconditionally,
but will
require
the
beneficiaries
to
perform
some
public
works or
community
services.
Means-testing
may also
be used
in case
of
independent
or
self-employed
labour
to
reduce
the
problems
of moral
hazard
or
voluntary
unemployment
to apply
for
government
subsidies.
Life
Insurance.
The
government
will
give out
benefits
in two
cases—severe
disability
or death
(employees
only) at
2,000
baht per
month
for
eight
consecutive
years.
For
employees
with
children
under
the
working
age, or
those
with
elderly
parents
who have
never
been in
the
workforce,
the
social
security
fund
will
create
incentives
to
attract
the
employees
into the
system
by
allowing
the
children
and the
parents
to be
automatically
entitled
to
social
security
benefits
as soon
as the
employees
register
themselves
as
members.
The
government
can turn
to many
different
channels
or
sources
to
finance
the
social
security
fund.
For
example,
the
government
may
adjust
the tax
structure,
expand
the tax
base
into the
informal
economy,
transfer
budgets
from
inefficient
programs,
raise
the
income
ceilings
of
premium
collection,
increase
the
premium
rate
payable
by
employees
and
employers,
or
increase
the
investment
rate of
return
of the
fund,
etc.
Conditions
of
Success
The
success
of the
above
forms of
social
security
system
rests on
the
ability
to bring
all
employees
in the
workforce
into the
social
security
system
by using
both
carrots
and
sticks.
For
example,
the
government
may hand
out more
benefits
to
members
while
making
it
inconvenient
for
those
outside
the
system
to
derive
government
benefits
or
services.
The
advantage
of the
new
social
security
system
is the
fact
that it
combines
the
benefits
of other
systems
within
one
single
package,
ranging
from
health
insurance,
ageing
insurance,
unemployment
benefits,
and
child
delivery.
The
higher
quality
of
services,
when
compared
to the
30-baht
medical
scheme,
can also
be a
strong
incentive.
While
members
are
required
to make
more
premium
payments,
the
benefits
they
will
receive
are also
more
substantial.
Another
advantage
is that
those
with
small
incomes
may not
have to
make the
premium
payments
at all,
but are
only
required
to
register
themselves.
The
differentiated
products
offered
under
the new
social
security
scheme,
which
are
designed
according
to the
different
levels
of
premium
payments
made by
different
membership
groups,
serve as
effective
incentives
to
attract
those
with
higher
incomes
into the
social
security
system.
The
payments
made by
those in
the
high-income
group
can then
be used
to
subsidize
those in
the
lower-income
bracket
without
making
being
too much
in favor
of the
poor at
the
expenses
of the
rich.
This
feature
makes
the new
social
security
system
different
from the
current,
more
populist
social
security
scheme
whereby
services
and
benefits
are
often
allocated
to
different
groups
in the
similar,
non-differentiated
manner.
Social
security
reforms
can also
significantly
enhance
national
savings,
while
giving
people
more
options
in
choosing
forms of
savings
and
investment
with
higher
interest
rates
than
what
they
might
gain
from
bank
deposits.
It
should
be noted
here
that the
annual
premiums
accumulated
in the
retirement
benefit
scheme
also
come
with
investment
options.)
Moreover,
the
larger
the size
of the
social
security
fund,
the more
investment
options
there
will be.
The size
of the
fund is
also
directly
related
to the
leveraging
power
that
fund
managers
will
have
with
service
providers/suppliers,
relative
to what
the
scenario
will be
in the
case of
self-service
or
private
insurance.
However,
social
security
reform
must be
implemented
in
parallel
with the
development
of
information
technology
regime.
Effective
IT
system
will
enable
agencies
to
verify
members’
income
and
social
security
status.
Another
side-benefit
is that
the
government
will be
equipped
with an
up-to-date
poverty
and
national
income
database.
What
remains
to be
explored
is an in-depth
study
and
calculation
of the
operational
costs
required
to
implement
this new
system,
as well
as the
attitude
and
acceptance
of
prospective
members
towards
this
program,
particularly
where
related
to the
different
healthcare
benefit
entitlements.
It is
also
necessary
to study
the
impacts
of
future
changes
in
demographic
structure
on the
stability
of the
social
security
system,
the need
for risk
reduction
using
other
measures,
and the
search
for
alternative
methods
in
achieving
good
governance
in
independent
and
effective
social
security
management.
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