In the absence of formal safety nets, can Eritrea’s traditional system of voluntary mutual aid community associations (Mahber) be extended to cover unexpected health costs and other related costs? This study examines the role of kinship networks and Mahber, and assesses the potential of Mahber-based health insurance schemes for the informal sector and rural poor. It finds that where the state no longer provides free public health services and access to private insurance is denied, Mahber -based health insurance is a viable way of providing modern health services.
In Eritrea, neither the state nor the market is effective in providing health insurance to low-income people in the rural and informal job sector. Part of the problem lies in the fact that low and irregular incomes mean that there is little profit to be made. Therefore, traditional Eritrean communities use their local social capital to alleviate unexpected social costs. Traditional risk-sharing arrangements are made within extended families and mutual aid community associations.
The primary aim of community-based social insurance schemes is to pool the resources of a group (mainly of socially excluded individuals) to protect all members against the financial effects of the health risks and unexpected costs.
- Joining together into a group means that the financial costs of the health risks can be distributed among the members, as each member pays a premium.
- Mahber-based social insurance schemes can substantially improve the health situation for poor households.
- Individual and household characteristics play a role in the viability of Mahber-based social insurance schemes.
- In areas with widespread poverty and a scattered population, setting up Mahber-based social insurance scheme is more difficult than in richer and more densely populated areas.
Setting up Mahber-based social insurance organisations can help to fight poverty at the local level.
- The transformation of voluntary mutual aid community associations into Mahber-based social insurance schemes requires the active role of central and local government, and the involvement of local and international NGOs.
- The inclusion of health care insurance into traditional mutual aid community associations may make the system complex technically and administratively.
- With the help of the government and NGOs, technical and managerial skills can be built up.
- Mutual aid community associations can be formalised with legal and political support.
- In due course, it should be possible to extend Mahber-based social insurance to cover the entire population, including the self-employed (such as farmers and fishermen), the elderly, dependent, disabled and unemployed.
- Strategies that could be used to develop such an insurance system include earmarked taxation.
