Abstract:
:In August 2003, the Ghanaian Government made history by implementing the first National Health Insurance System (NHIS) in sub-Saharan Africa. Within 2 years, over one-third of the country had voluntarily enrolled in the NHIS. To discourage households from selectively enrolling their sickest (high-risk) members, the NHIS in the Nkoranza district offered premium waivers for all children under 18 in exchange for full household enrolment. This study aimed to test whether, despite this incentive, there is evidence suggestive of adverse selection. To accomplish this, we examined how the observed pay-off from insurance (odds and intensity of medical consumption) responds to changes in the family enrolment cost. If adverse selection were present, we would expect the odds and intensity of medical consumption to increase with family enrolment cost. A number of econometric tests were conducted using the claims database of the NHIS in Nkoranza. Households with full enrolment were analysed, for a total of 58 516 individuals from 12 515 households. Our results show that household enrolment cost is not correlated with (1) odds or intensity of inpatient use or (2) odds of adult outpatient use, and is weakly correlated with the intensity of outpatient use. We also find that household enrolment costs are positively correlated with the number of children in the household and the odds and intensity of outpatient use by children. Thus, we conclude that the child-premium waiver is an important incentive for household enrolment. This evidence suggests that adverse selection has effectively been contained, but not eliminated. We argue that since one of the main objectives of the NHIS was to increase use of necessary care, especially by children, our findings indicate a largely favourable policy outcome, but one that may carry negative financial consequences. Policy makers must balance the fiscal need to contain costs with the societal objective to cover vulnerable populations.
journal_name
Health Policy Planjournal_title
Health policy and planningauthors
Rajkotia Y,Frick Kdoi
10.1093/heapol/czr057subject
Has Abstractpub_date
2012-08-01 00:00:00pages
429-37issue
5eissn
0268-1080issn
1460-2237pii
czr057journal_volume
27pub_type
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