Academic journal article Economics, Management and Financial Markets

Determinants of Insurance Enrolment among Ghanaian Adults: The Case of the National Health Insurance Scheme (Nhis)

Academic journal article Economics, Management and Financial Markets

Determinants of Insurance Enrolment among Ghanaian Adults: The Case of the National Health Insurance Scheme (Nhis)

Article excerpt


This paper investigates the factors influencing the decision to enroll in Ghana's National Health Insurance Scheme (NHIS) with emphasis on individuals' socio-economic factors. The paper uses the fifth round of the Ghana Living Standards Survey (GLSS 5) for the econometric estimation. Our findings indicate that education and economic status (being non-poor and being employed) are significant and positive predictors of the decision to enroll in the NHIS. Further, age, area of residence (urban) and geographical area of residence per Ghana's ten administrative regions were found to be significantly correlated with the decision to enroll in the NHIS. In addition, the study found that individuals who use the services of modem healthcare providers (consult health practitioner) are also more likely to enroll relative to those who seek care from traditional practitioners. Our findings thus indicate that Ghana's NHIS is not yet pro-poor as envisaged. The study recommends that policymakers should introduce more innovative communication channels that are more appealing to many Ghanaians who are not literate or do not have formal education. In addition, policies geared towards universal basic education should be strengthened to encourage more people to become more health conscious through education. Finally, targeting the poor for enrolment through consistent and transparent inclusion criteria will improve the pro-poorness of the scheme.

JEL Codes: G22, 111, 118

Keywords: insurance, enrolment, NHIS, adults, Ghana

(ProQuest: ... denotes formulae omitted.)

1. Introduction

In the 1980s, the World Bank's suggestion for African countries to institute cost recovery in health care delivery led to the introduction of medical facilities user fees on the continent and in Ghana's case, the cash-and-carry system. This system of payment for healthcare delivery resulted in low utilization of western medical care while self-medication and patronage of herbal medicine were prevalent among the poor in Ghana. These in turn led to a very high incidence of preventable deaths (Ghana Statistical Service, 2008). The interest in exploring the prospects of social health insurance and its effect on increased access to, and the affordability of health care in Africa has been on the ascendancy in recent years. Social health insurance remains one of the most important health financing options with a strong potential to share risks across population groups and time due to its compulsory membership (Wagstaffand Doorslaer, 2003). Particularly, access to health insurance has the potential to reduce out-of-pocket expenditures, and thus avoiding potential catastrophic health expenditures (Chaudhury and Roy, 2008; Chetty and Looney, 2006). While access to health insurance increases utilization of healthcare services, it could also trigger a potential tradeoff between quantity and quality or perhaps both, albeit in general health insurance has positive outcome on health (Brugiavini and Pace, 2010).

Ghana introduced a National Health Insurance Scheme (NHIS) in 2003 (Act 650) but the scheme became effective in March 2005. The scheme primarily seeks to improve financial access of Ghanaians, especially the poor and the vulnerable to quality basic health care services. This is to be achieved through a social policy that caters for the most vulnerable in society based on principles of equity, solidarity, risk-sharing, cross-subsidization, and good governance among others in health care delivery. Administratively, the National Health Insurance Fund (NHIF) is responsible for the disbursement and management of funds for the operation of the NHIS. Financially, the NHIS relies extensively on revenues from the 2.5% value-added-tax on consumer goods and services. The NHIF also provides funding for the NHIS through the 2.5% of formal sector workers' contributions from their social security which is ceded to the fund. In addition, the informal sector workers pay income-rated contributions directly to the District Mutual Health Insurance Scheme (DMHIS), ranging from GH07. …

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