Fighting the Diseases of Poverty by Philip Stevens

Author:Philip Stevens [Stevens, Philip]
Language: eng
Format: epub
ISBN: 9781138523548
Google: RNwVtAEACAAJ
Publisher: Taylor & Francis Group
Published: 2017-10-02T04:34:04+00:00

Inadequate health insurance

Health insurance enables individuals to pool their financial resources and thereby protect themselves against the risk of unexpected and expensive illness. In return for monetary payment, an insurer agrees to compensate the individual in a specified way should defined, uncertain events actually happen.

When health insurance systems function well, demand for healthcare increases because larger numbers of people are covered against the costs of ill health. Several studies have shown the link between greater uptake of therapeutic medicines among poor and vulnerable populations, and the availability of health insurance in the United States (Department of Health and Human Services, 2002; Poisal & Chulis, 2000). However, many low-income countries do not have properly functioning health insurance schemes. In 1998 not one low-income country with a gross national product (GNP) per capita below US $761 had a social health insurance scheme (Carrin, 2002). Those individuals not covered by insurance pay for health-care out of their own resources (or are nominally provided such services by the state). Since these people are already poor, their ability to purchase medicines – especially expensive medicines – is likely to be very low indeed. So the lack of availability of insurance acts as a significant barrier to access to medicines and constraint on demand.

One reason for the low level of insurance coverage in poor countries is the lack of adequate court systems and generally an absence of the rule of law, which makes the enforcement of legal agreements difficult, long-winded and expensive. Health insurance takes the form of a contract in which payment is made in advance of pay-out by the insuring company. In an environment where contracts are difficult to enforce, it is not surprising that many people are unwilling to risk paying into an insurance scheme. This specifically relates to a failure on the part of government to create an adequate rule of law and supporting institutions.

Another reason for low levels of insurance coverage in poor countries relates to the level of regulation placed upon private health insurers. For example, insurance companies may be required to offer certain kinds of insurance, regardless of whether or not consumers want the coverage. This is the case in South Africa, where the government has banned insurers from excluding high risk applicants, and compelled them to include cover that is not necessarily appropriate. The South African government is also working towards establishing a system that will require well-run funds to transfer their surpluses to badly-run funds. This latter intervention will limit the ability of actuaries to balance contributions against risk. Such regulations increase the costs associated with offering insurance, which increases the price at which it is offered. As a result, relatively fewer people are able to afford insurance. Paradoxically, regulations intended to protect consumers ultimately harm them (Soderlund & Hansl, 2000).

Governments also stifle the development of properly functioning insurance markets in less obvious ways. Weak governance structures, including poorly defined property rights, excessively bureaucratic rules for business, and an absence of the rule of law in many

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.