Basis for effective community-based Health Insurance schemes: investigating inequities in catastrophic out-of-pocket health expenditures, affordability and altruism

Abstract

Background: Community-based health insurance (CBHI) schemes should be designed so that they are affordable, provide financial risk  protection against catastrophic costs and harness community solidarity in form of altruism so as to ensure high levels of enrollment and  use of the services. This paper presents information about the socio-economic status (SES) and geographic differences in affordability,  catastrophic costs and altruism within the context of instituting effective CBHI schemes.

Methods: The study took place in a rural, urban and semi-urban community in two states in Nigeria. A questionnaire was used to collect  information from 3070 randomly selected householders. Contingent valuation method was used to elicit altruistic willingness to pay.  Catastrophic health expenditures were examined at 40%, 10% and 5% thresholds based on household non-food expenditures.  Affordability was measured as proportion of total household expenditure that will be consumed by the existing per capita monthly  premium for CBHI, which is 500 Naira. Data was examined for links between affordability, catastrophic costs and altruistic WTP with SES  and geographic area of residence.

Results: Households are currently spending between 1139.6 Naira (US$ 9.5) and 3846.5 Naira  (US$32.1) monthly on healthcare, and this was mainly as out-of-pocket expenditure. At the 40% household non-food expenditure  threshold, 28.7% of households incurred catastrophic healthcare costs. Incidence of catastrophic costs was least in the urban area and  amongst the highest quartile. A monthly premium of 500 naira (US$ 4.2) was found to be less that 3% of households’ monthly  expenditures. The mean altruistic WTP was 202.7 Naira (US$1.7) per year.

Conclusion: There were high levels of catastrophic costs, but  with appreciable levels of affordability and altruistic WTP for CBHI, coverage can be increased and financial risk protection assured for  most people that need CBHI.