Can community health insurance (CHI) increase access to care and offer financial protection for poor people excluded from formal insurance? What problems are there in implementing CHI? This literature review reveals major difficulties faced by CHI in sub-Saharan Africa: lack of a clear legislative and regulatory framework; low enrolment rates; insufficient risk management; weak managerial capacity; and high overhead costs. Required policy interventions include commitment to adequate legislation and measures to expand equitable enrolment.
Across low-income countries, CHI attempts to bridge the gap between people covered by formal health insurance and those left to pay for care themselves. A number of reviews show evidence of CHI’s potential to increase access and offer financial protection against the cost of illness for poor people. Field experience, however, shows that in sub-Saharan Africa (SSA), operational difficulties still hamper the success of CHI.
This review draws on existing literature to analyse the operational difficulties hampering CHI development in SSA, where there are approximately 900 schemes. Operational difficulties fall into five categories:
- Lack of clear legislative and regulatory framework: Government responses to international pressure calling for national policies in support of CHI have generally been inadequate across SSA. Since the ability of schemes to operate successfully depends on a legislative and regulatory framework, policymakers should invest in developing such a framework.
- Low enrolment rates: Apart from a few successful experiences, the literature consistently reports enrolment rates between 1 per cent and 10 per cent. To increase the uptake of measures to expand equitable enrolment, investments should be made to expand and sustain relevant social marketing campaigns and other targeting initiatives. Culturally sensitive interventions are urgently needed to explain how insurance works and what the benefits are.
- Insufficient risk management measures: Despite recent progress to control consumer fraud, adverse selection, over-use and cost escalation, many CHI schemes still require better risk management. Even in the absence of complex underwriting and administrative structures, risk can be controlled through the use of simple measures. Policymakers should promote the adoption of adequate risk management measures in all schemes.
- Weak managerial capacity: This is reflected in all fields of operation and is more pronounced among community-based schemes than among schemes managed by providers, non-government organisations or micro-finance institutions. Substantial investment is needed from both host countries and sponsoring agencies to increase the knowledge base on CHI among communities and decision makers and provide training in all areas of operation. High overhead costs: Schemes are expected to minimise overhead costs but in practice this is often not the case. Overheads are usually high, between 10 and 30 per cent of the revenues generated through premiums. Collective efforts to contain overheads should be channelled towards developing accurate cost analyses and encouraging schemes nested within pre-existing institutions (such as NGOs and micro-finance organisations).
