Financing Under a Mandatory Single-payer Universal Health Insurance System

This paper develops a stylized two-part tariff model to evaluate the fiscal and distributional effects of introducing income-based coinsurance in Egypt's new Universal Health Insur- ance System (UHIS). Using 2019/20 Household Income, Expenditure and Consumption Survey (HIECS) data, I derive closed-form expressions for household reservation prices for healthcare under mandatory premium payments and calibrate the model with empirically estimated demand elasticity. Numerical simulations compare the status-quo design, flat 7 percent premiums and 10 percent coinsurance with broad medical exemptions, to alter- native schedules that segment coinsurance by income quintile and decile while imposing financial protection caps. Relative to the simulated baseline deficit of EGP 332 billion, the best-performing decile schedule shrinks the funding gap to EGP 52 billion: an 84 percent improvement. The results demonstrate that coinsurance can operate as a redistributive instrument, not merely a cost-containment device, and offer a tractable framework for other low- and middle-income countries that seek to balance equity and solvency under universal health insurance mandates.