In sickness and in wealth: why insurance programs are bad for poor nations’ health

Publicado: 9th Octubre 2013

A new report, Universal Health Coverage, published today by Oxfam, is warning that health insurance programs – being promoted by some donor agencies and governments in developing countries – are excluding the poorest and most vulnerable people.

The international agency says that usually only those who are already better-off are able to sign up, leaving the majority of citizens without cover and forcing the poorest to pay often huge, out of pocket expenses to get health care.

This misguided preoccupation with insurance is also leaving other funding methods largely unexplored. Improving tax collection, for example, could raise up to $269 billion a year*, giving developing countries the potential to double their health budgets. One reason countries are so keen to implement insurance is a false notion that it will generate extra money for health budgets, when in reality is raises very little.

Health insurance excludes the poorest people

Kevin Roussel, Head of Oxfam’s Essential Services Campaign, said: “Three people every second are forced below the poverty line because of catastrophic health care costs, but this obsession with insurance as the answer is leading poor countries down a blind alley.

“Most insurance programs are a lose-lose situation. They fail to reach the poorest people and yet collecting insurance premiums costs a huge amount to administer without raising any significant amounts of cash.”

For the African countries that have introduced health insurance, low levels of enrolment are proving to be a major and recurring challenge. Ghana’s National Health Insurance Scheme has been labeled a success but excludes 64 per cent of the population and the vast majority of these are poor people. Ten years after it was introduced in Tanzania, only 17 per cent of the population has health insurance and Kenya’s National Hospital Insurance Fund covers only 18 per cent of Kenyans, despite the fact it was established nearly 50 years ago.

Fairer ways of funding health care

The international agency says developing countries are being derailed from achieving Universal Health Coverage (UHC) – a goal to make sure all citizens get the health services they need without suffering financial hardship – because governments, donors and multilaterals, including the World Bank and the UN’s International Labour Organization, have historically put too much emphasis on insurance programs as the solution, even though they have failed to improve access to health care for the poorest.

Oxfam is calling on the World Bank, whose annual meetings take place in Washington later this week, to encourage governments to look for fairer ways to fund UHC, within the framework of President Jim Kim’s new strategy to end extreme poverty and boost shared prosperity.

Kevin Roussel said: “There is a huge danger that Universal Health Coverage becomes all about introducing health insurance programs and other fairer ways of funding health care are being left by the wayside.

“Universal Health Coverage should mean everyone gets the same financial protection and access to the same high quality health services, regardless of their employment status or ability to pay.”

Raising revenue through taxes

Oxfam’s report argues that even the poorest countries can increase revenue by improving existing tax collection systems, removing unnecessary tax exemptions and introducing new progressive taxes. Gabon, for example, raised $30 million for health with a tiny levy on the profits of companies that handle remittances and a tax on mobile phone operators.

At the same time, global action to tackle tax dodging by multinational enterprises could save developing countries an estimated $160 billion a year – more than four times the amount spent on health care by all the governments in Sub-Saharan Africa combined.

Kevin Roussel said: “Countries should focus on finding home-grown health financing solutions that are universal and equitable. At the same time donors need to stop pushing unproven insurance programs which in many cases are actually reinforcing inequality.”

Three people every second are forced below the poverty line because of catastrophic health care costs, but this obsession with insurance as the answer is leading poor countries down a blind alley.
Kevin Roussel
Head of Oxfam’s Essential Services Campaign

Notas para editores

Read the report: Universal Health Coverage: Why health insurance schemes are leaving the poor behind

Social health insurance (SHI) is the main model being touted, whereby governments automatically collect contributions from people with secure jobs through their payroll, whilst those in informal work have to pay a premium to join. Several African countries have introduced SHI but low levels of enrolment are proving to be a major and recurring challenge because collecting premiums from the vast majority of citizens, who work in the informal sector, is near-on impossible.

Other models include private and community based insurance, both of which rely on voluntary contributions. Countries that rely heavily on private health insurance, including South Africa and the USA, have some of the most inequitable health systems in the world and community-based health insurance schemes (CBHI) are failing to reach any significant number of people. In Africa CBHI only covers less than 1 per cent of the population.

A growing number of developing countries, including Brazil, Malaysia, Mexico and Thailand have built home-grown health financing systems that are actually working to achieve UHC. Rather than focusing efforts on collecting premiums from those who are too poor to pay, these countries have prioritized general government spending for health.

*The combined government expenditure on health in 52 developing countries (in 2010) was $275.6 billion. Significantly improving the collection of tax in the same countries could potentially raise an additional $269 billion dollars, according to a 2011 Oxfam report.

Información de contacto

For more information, please contact:

  • Sarah Dransfield, Oxfam Senior Press Officer, on +44 (0) 1865 472269, +44 (0) 7767 095636 or

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