Every year, more than 100 million people globally are pushed into extreme poverty due to direct payments for health services, and unsurprisingly a large percentage of people within this category are in Africa. Many Africans today, especially those living in rural areas are not enrolled in any health insurance program and this increases the risk of worsening poverty [as many go broke anytime they or any of their loved one experience a health problem].
To understand what makes people register for health insurance and how health insurance programs can reduce the financial impact that health shocks might have on a households, a research conducted by Andinet Woldemichael -- a renowned research economist at the African Development Bank (AfDB). He used a national household/family survey data from Rwanda collected over a 10-year period in 2000/2001, 2005/2006 and 2010/2011. This survey takes into account the social, economic and health information of a total of 26,193 households.
Below are some key findings from the research report:
1. Results from this research proves that a person’s age, gender, educational level, financial status, marital status and health behavior could largely influence their decision to enroll in a CBHI program.
Families headed by males, are less-likely to enroll in any health insurance program.
Families headed by older and married individuals are more likely to enroll.
A person with harmful health behaviors, such as excessive alcohol and tobacco intake, is less likely to enroll.
A poor and uneducated person is more likely to find the insurance package too expensive and would not want to subscribe to it.
2. A family registered under a CBHI program has a 20 percent chance of escaping financial catastrophe and an 8% chance of escaping poverty in the event of a health shock, compared to a family who engage in out-of-pocket healthcare payments.
3. CBHI programs significantly reduce poverty gap (i.e. the cost of eliminating poverty compared to the poverty line), as it reduces the total cost of eliminating extreme poverty which is caused by out-of-pocket healthcare spending by about $2.89, and moderate poverty by about $7.44.
In conclusion, there is a growing need for governments in developing African countries to provide affordable health insurance schemes for financially vulnerable citizens. This will not only improve the quality of healthcare they receive, but also reduce their exposure to health-related financial risks and impoverishment.
Still Craving? Find out more about this research experiment and the results on AfDB Working Paper
Author Credit: Ima-Abasi Joseph Pius