Community-Based Health Insurance: A Comprehensive Review

Key Points

Community-Based Health Insurance (CBHI) programs involve community members pooling funds to cover healthcare expenses in voluntary arrangements.

Despite the optimistic outlook for CBHI, evidence indicates that its impact on financial protection and access to essential healthcare remains moderate for enrolled participants.

Participation rates in most CBHI schemes are low, with marginalized communities often left out.

While CBHIs have limited potential to drive countries towards Universal Health Coverage (UHC), they can contribute positively to community development and local accountability of healthcare providers.

Overview

CBHI stands as a subtype of micro health insurance, a term encompassing insurance targeted at low-income individuals. The distinct characteristic of CBHIs is their community-driven setup and management.

Typically, small-scale, voluntary CBHI programs feature the following structural elements:

– Health risks and funding are pooled within a community or specific group based on shared characteristics like geography or occupation.

– Membership premiums are frequently uniform, independent of individual health risks.

– Entitlements to benefits correspond to contributions made.

– Participation is voluntary.

– The scheme operates on a nonprofit basis.

Challenges

Both empirical evidence and theoretical considerations underline that the conventional CBHI model—relying solely on voluntary, localized schemes with minimal to no support for impoverished and vulnerable groups—can only offer a limited contribution towards achieving Universal Health Coverage (UHC). CBHIs cannot be counted upon to be a primary funding or coverage source, thus best suited for complementary roles within a broader national health financing strategy towards UHC. This stems from the tendency of individuals with fewer healthcare needs to refrain from voluntary participation, and a lack of subsidies for the disadvantaged.

Despite this, health service utilization often rises among members post-enrollment.

Policy Directions

While the traditional CBHI model represents one method to organize community initiatives, it cannot be the main source of funding or coverage. Mandatory or automatically covered financial protection mechanisms, financed through general government revenue with subsidies for the economically challenged, exhibit more promise in realizing UHC goals compared to voluntary contribution-based systems. Some countries with CBHI programs have taken steps to transform their models into national schemes.

In nations with existing voluntary CBHIs, governments might leverage the benefits of enhanced local governance capacity and public acceptance of prepaid insurance contributions. Integrating or merging these schemes into a national pool with decentralized branches or interconnected pools beyond the community level is an option. These could offer similar benefit packages and act as strategic healthcare purchasers with national backing, maintaining local accountability. This approach could lead to efficiency gains, quality improvements, and increased redistribution capacity and financial protection.

In contexts where the government isn’t involved in CBHI development, prioritizing the establishment of a national system geared towards universality might be more effective than directing resources towards CBHIs with limited impact on UHC progress.

WHO’s Involvement

WHO supports member states in designing health financing strategies to reduce fragmentation and enhance pooling for improved redistribution, advancing Universal Health Coverage.

Key elements to move from small CBHI schemes towards a national health financing system for UHC include:

– Mandatory coverage for the entire population.

– Government subsidies from general revenues for vulnerable and underprivileged individuals.

– A larger and more diverse pool, potentially a single national pool.

– Empowering local government authorities in enrollment, including incentives.

A comprehensive reform of CBHIs can enhance their redistributive capacity, provided it is integrated into a broader health financing framework that aligns pooling with other financing functions.