Community-based health insurance

12/09/2024 10:30 AM


Under WHO, community-based health insurance (CBHI) is a form of micro health insurance, which is an overarching term for health insurance targeted to low-income people. The specific feature of CBHIs is the community involvement in driving its setup and in its management.

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Community-Based Health Insurance (CBHI) is an emerging concept for providing financial protection against the cost of illness and improving access to quality health services for low-income rural households who are excluded from formal insurance. CBHI is currently being provided in some rural areas in developing countries and there is ongoing research about its impact on the well-being of the poor in these areas. However, the success of CBHI revolves around the existence of social capital in the community. This has led researchers to explore the impact of CBHI on the well-being of the poor in rural areas, especially as it relates to social capital. The overall objective of this paper is to review recent developments that address the link between CBHI and social capital. Policy implications are also discussed. 
Pooling of health risks and of funds occurs within a community or a group of people who share common characteristics, such as geographical location or occupation.
Membership premiums are often a flat rate and independent of individual health risks.
Entitlements to benefits are linked to contributions in most cases.
Affiliation is voluntary. The scheme operates on a non-profit basis.
Challenges
Both theory and evidence suggest that the traditional CBHI model – relying only on voluntary, small-scale schemes with little or no subsidization of poor and vulnerable groups – can play only a limited role in helping countries move towards universal health coverage(UHC). CBHIs cannot be expected to provide a major source of funding or coverage, and hence can at best provide only a complementary role as part of a national health financing strategy toward UHC. This is partly because people with few health needs tend not to join on a voluntary basis, and there is usually little or no subsidization for poor and other vulnerable groups.
Health service utilization rates of members, however, generally increase after enrollment.
Policy options 
Although CBHIs in the traditional model are one way to organize community initiatives, they cannot be expected to provide a major source of funding or coverage. Financial protection arrangements based on mandatory or automatic coverage funded from general government revenue that subsidizes those unable to pay have shown more potential to reach UHC goals than voluntary, contribution-financed schemes. Some countries with CBHI schemes have taken action and transformed their CBHI model towards a national scheme.
For countries with established small-scale voluntary CBHI schemes, the government could capitalize on the positive results of improved local governance capacity and public acceptance of prepaid insurance contributions. Here, an option is to integrate or merge existing schemes into a single national pool with decentralized arms or closely interconnected pools beyond the community level. These can provide similar benefit packages and act – with national support – as strategic purchasers of health services, while maintaining local accountability. This could also promote quality gains and efficiency while guaranteeing higher levels of re-distributive capacity and financial protection.
In countries where there is no government engagement in CBHI development, governments may focus from the start on developing a national system geared towards universality and envisage to cover the whole population rather than diverting resources and efforts to establishing CBHIs as an interim solution with limited impact on progressing towards UHC.
WHO response 
 WHO supports Member States to develop health financing strategies that aim at reducing fragmentation and better pooling to enhance the potential for re-distributive capacity with the aim to progress towards Universal Health Coverage.
The following institutional design features can be considered critical for a move away from small CBHI schemes towards a national health financing system for UHC:
• Mandatory coverage to the population;
• General government revenues to subsidize coverage of vulnerable and poor people;
• Larger/more diverse pool (for example, by increasing the number of enrolled people, pooling beyond local pools, or a single national pool); and
• A strong and explicit role (including incentives) of local government authorities in enrollment.
One key approach to reforming CBHIs is to increase the re-distributive capacity of the system. For such a reform to realize its potential, however, it must be set within an overall vision of health financing that aligns pooling with the other health financing functions.
Over the last years, demographic growth coupled with unequal growth in these regions has increased the number of people who are living in extreme poverty. Nowadays, about 50 per cent of the people in Sub-Saharan Africa are livin

g below the poverty threshold. Furthermore, more than 100 million people do not have a balanced diet. Such a situation increasingly affects rural areas in developing countries which have very low standards of well-being and quality health care. Most households in these rural areas are characterised by a high prevalence rate of sanitation-related diseases, which undermines their health, in turn weakening their ability work and invest.

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The disappearance of free health care (mostly primary health care) has resulted in the loss of a form of social protection for a large portion of the population especially rural households and those working in the informal sector. As a result, many policy-makers, international institutions, NGOs and the civil society have set out to seek effective alternatives in order to provide rural households a permanent solution to the problem of accessing health care. Development actors are increasingly considering community-based health insurance (CBHI)1 as an instrument that can enable not only easy access to quality health care, but also reduce absolute poverty among low-income populations. CBHI is a form of micro health insurance which is mainly used in rural areas in developing countries. Over the last decades, insurance was recognized as a financial instrument which could enable low-income households to manage their financial risks. The role of CBHI therefore is to help low-income households manage risks and reduce their vulnerability in the face of financial shocks. CBHI is usually based on the following characteristics: voluntary membership, non-profit objective, linked to a health care provider (often a hospital in the area), risk pooling and relying on an ethic of mutual aid/solidarity 
Access to health services is a main concern in poor countries. Most policy debates are around how to keep the poor from falling into a poverty trap that is often caused by medical expenses. Delaying medical treatment or choosing self-treatment can generate serious health consequences. Hence tackling this issue is of utmost importance. Many policymakers in developing countries are trying to develop health care programs that would cater to the poor and be sustainable at the same time.

Lack of health insurance coverage of the poor in developing countries impedes access to adequate health care. Consequently, CBHI has been considered as an effective means to reach the poor with health care services. Since there has been an increased attention to such a health insurance scheme, the analysis of the demand for CBHI is extremely important for formulating policies and strategies for the health sector. Adequate knowledge of the determinants of healthcare demand is essential for devising strategies to increase allocative efficiency of resources. Nevertheless, for CBHI to have a long-term effect, there must be a social capital in the community. Thus, the overall objective of the study was to review recent developments that address the link between CBHI and social capital. 

PV

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