The Prices in the Crises : What We Are Learning from Twenty Years of Health Insurance inLow- and Middle-Income Countries

Governments in many low- and middle-income countries are developing health insuranceproducts as a complement to tax-funded, subsidized provision of health care through publicly operated facilities. Thispaper discusses two rationales for this transition. First, health insurance would boost fiscal revenues for healthcare, as post-treatment out-of-pocket payments to providers would be replaced by pre-treatment insurance premia tohealth ministries. Second, increased patient choice and carefully designed physician reimbursements would increasequality in the health care sector. This essay shows that, at best, these objectives have only been partially met. Despiteevidence that health insurance has provided financial protection, consumers are not willing to pay forunsubsidized premia. Health outcomes have not improved despite an increase in utilization. The authors argue thatthis is not because there was no room to improve the quality of care but because behavioral responses among health careproviders have systematically undermined the objectives of these insurance schemes.