Actuarial Analysis of the Federal Sehat Sahulat Program


Pakistan’s Sehat Sahulat Program (SSP) is viewed as a key building block as the country moves towards Universal Health Coverage (UHC). It aims to reduce catastrophic health expenditures by providing cost-free in-patient care for families living on less than 2 USD per day. Premiums for beneficiaries are fully subsidised by the government, while the State Life Insurance Company manages the healthcare expenditure as third-party administrator. In December 2018, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), contracted two actuarial analysts from ILO to compare current premium rates to actual claims, and to project claims cost for the next three years, in order to help the government set realistic premium rates.


Aiming to strengthen financial governance and build risk management capacity on the part of SSP, the actuarial analysis compared the premium rate from Phase I to the actual per family claims experience, considering different variables (‘actuarial factors’) related to the beneficiaries and the care provided. ‘Stress-testing’ key assumptions based on variables such as changes in family size and structure and urbanisation, the ILO experts then projected possible future claims cost and expenses over the next three years: Phase 2, during which SSP aims to cover all districts of Pakistan and reach some 11 million families

Findings and recommendations

The assessment of Phase 1 showed that in 2016-17 the premium of 1300 PKR did cover average family claims of 1044 PKR. However, this points to under-utilisation rather than financial viability, which is common for a young, rapidly expanding programme. When utilisation and average cost per in-patient episode rise over time, the current family premium is likely to be insufficient to cover the expected claims and should therefore be increased to 1775 PKR for the period 2019 to 2021. The experts recommend monthly monitoring of incidence rates and other key variables to provide early warning for potential future deficits, as well as close scrutiny of the performance of insurer and participating health providers, and actuarial analysis to be repeated at least every two years.