Willingness to Pay for Community Health Insurance: A Study of Hygeia Operations in Shonga and Afon Communities in Kwara State

Abstract

Background: Despite provisions for people in both formal and informal sectors are contained in the Nigerian National Health Insurance  Scheme as an alternative financial mechanism for healthcare, there has been a disproportionate focus on the formal sector. Central to  the health insurance coverage is the determination of the premium paid by beneficiaries of the plan. While this is straightforward for  people in the formal sector, the non-deterministic income base in the informal sector has made actuary determination of premium a  challenge. Thus Community Based Health Insurance (CBHI) is designed to cater for the inclusion and uptake of the rural poor, subject to  payment of the often arbitrarily prescribed premium. This paper investigates the willingness to pay (WTP) for CBHI and its determinants by the rural people of the Shonga and Afon communities of Kwara State.

Methods: Using the CBHI scheme in Afon and Shonga  communities of Kwara State, the paper applied the contingent valuation method (binding game format) and Probit regression to track  the extent of WTP for the plan, and its determinants. Administering a pre-tested questionnaire, information was collected from a total of  220 households selected through a simple stratified random sampling method.

Results: Relative to N300 ($1.36) currently being charged  participants as premium, the mean amount respondents are willing to pay is N720 ($3.27) with the minimum and maximum amounts  being N200 ($0.91) and N5,000 ($22.73), respectively. Results from Probit regression revealed that WTP is significantly driven by age,  gender, marital status, frequency of illness, and income level of respondents. Higher WTP is associated with males, the married and  youthful respondents with more education and income, and higher frequency of illness.

Conclusion: Given that the mean WTP is higher  than the currently charged premium, there are indications that additional resources can easily be raised for the scheme. This points to  viability of replicating the scheme in more communities across the country, and thus expands coverage. Extension of the scheme to other  rural communities should be preceded with empirical analysis of amount the population is willing to pay for the scheme.