PHA-Exchange> Private Health Insurance in Low and Middle-Income Countries

[Claudio]

From: Ruggiero, Mrs. Ana Lucia (WDC) 


Private Health Insurance in Low and Middle-Income Countries

Scope, Limitations, and Policy Responses

 

Denis Drechsleri and Johannes P. Jüttingii

OECD Development Centre, March, 2005

 

Available online as PDF file [73p.] at: http://hc.wharton.upenn.edu/impactconference/drechsler_031005.pdf 

 

"..This paper aims at analyzing characteristics of private health insurance (PHI) in low- and middle income countries and evaluating its significance for national health systems. It yields three major results: 

·         First, private health insurance PHI involving pre-payment and risk sharing currently only plays a marginal role in the developing world. Coverage rates are generally below 10 % of the population while private risk sharing programs only have wider significance in a small number of countries (e.g., South Africa, Uruguay, and Lebanon). 

·         Secondly, in many countries the importance of private health insurance PHI to finance health care is on a rise. Various factors contribute to this development: growing dissatisfaction with public health care, liberalization of markets and increased international trade in the insurance industry, and overall economic growth allowing higher and more diversified consumer demand. This last aspect in particular is expected to put pressure on the supply side of the system to increase choices and improve the quality of health care coverage. 

·         Third, the development of private health insurance PHI presents both opportunities and threats to the health care system of developing countries. If PHI is carefully managed and adapted to local needs and preferences, it can be a valuable tool to complement existing health care financing options. In particular non-profit group-based insurance schemes could become an important pillar of the health care financing system, especially for individuals who would otherwise be left outside of a country's health insurance system. 


However, private health insurance PHI could also undermine the objective of universal coverage. Opening up markets for private health insurance without an appropriate regulatory framework might lead to rising inequalities in the access to health care: it may lead to cost escalation, a deterioration of public services, a reduction of the provision of preventive health care and a widening of the rich-poor divide in a country's medical system. Given these risks, the crucial challenge for policy makers is to develop a regulatory framework .."

 



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