Anika Gray: Making health insurance mandatory
For many years, Rosie would complain of joint pains but she never visited the doctor. She worked all her life braiding the hair of white tourists in Ocho Rios.
She recently had to stop working because the joint pains in her hands and knees had become excruciatingly painful. She finally visited the doctor and was diagnosed with a rare bone disease. She has no health insurance and does not qualify for the National Health Fund (NHF).
All her medical expenses will now have to be paid out of pocket. She has little savings and can barely buy gas to put in her Nissan. She could use the health services at the nearest hospital, but the wait times are extremely long, service is poor, and doctors are scarce.
What if the Government had made it mandatory for Rosie to get affordable health insurance when she was healthier? Would she be in a better position today to finance her health care?
WHY MANDATORY HEALTH INSURANCE?
There are a couple of reasons the implementation of a mandatory health insurance (MHI) programme is crucial to health-care financing for Jamaicans like Rosie.
First, an MHI scheme provides financial protection for individuals. Only a very small percentage of Jamaicans currently have health insurance. This means that the vast majority of Jamaicans have to fund inevitable medical expenses out of pocket or rely on the overburdened public-health
sector. Medical expenses, especially for those suffering from chronic conditions, can result in financial ruin if payment is made out of pocket.
Second, MHI would increase health care use among persons who are currently underusing health-care services. Studies have shown that persons will underuse health-care services where there is inadequate financial protection. For example, persons without health insurance will usually forgo getting crucial preventative health care in order to satisfy other pressing needs, such as mortgage payments, groceries, etc. And even though persons can access health care free from the public sector, the long waiting times, poor infrastructure and service combine to discourage persons from seeking those services.
Third, MHI ensures that those who use health care are the ones paying for it and helps to reduce the tax burden on the country's small tax base. Currently, taxes are the main means of public health-care financing. But a health-care system funded solely from taxes is unsustainable in the Jamaican context. Why?
With its large informal sector, the country has a small and overburdened tax base. Added to this are the low levels of tax compliance and ineffective enforcement by tax authorities. This results in a small group of taxpayers paying the health-care costs for the majority.
Fourth, obligating persons to have health insurance will result in equitable access to health services and better-quality service in the public sector. Equity is achieved because persons will have their choice of providers and the less-well-off will not be restricted to seeking health services from the public sector.
Under the current system, those with higher incomes can access better health care in the private sector, but the less-well-off are left to 'tek weh dem get' in the poorly managed public sector.
Moreover, increasing the choice of providers increases competition in health-care markets, which, in turn, forces public-sector facilities to increase the quality of service in order to attract patients. Further, patients with health insurance provide an added revenue stream for public health facilities - thereby, decreasing their dependence on allocations from the government budget. With more revenues, public health facilities can improve infrastructure and quality of service.
HOW WILL IT WORK?
To be of benefit to Rosie, what should a mandatory health insurance scheme look like and how should it work? At its core, such a scheme should have a basic benefit package that includes prescriptions, doctor's visits, services offered primarily at hospitals and preventative health services such as mammograms, Pap smears, etc.
Patients like Rosie should have a choice of insurer, and this would require multiple companies selling the basic
benefit package at a premium set by Government, in consultation with insurers and health providers. Individuals who are below a certain income level should get government support to pay their premiums.
In order for the MHI to gain universality, insurers should be prohibited from denying coverage for the basic package but may do so if patients decide to increase coverage to include other services. MHI will likely increase demand for health services, but to control for overuse, a co-payment system, as currently exists, should be maintained. Finally, Government will have to tightly regulate
insurers and health-care providers so as to safeguard the interests of patients.
A key issue to tackle is how to get persons, especially those in the informal sector like Rosie, to sign up for health insurance. One solution is to make health insurance a prerequisite for
persons to access certain desirable/essential services. For example, health insurance should be required before a person can get a driver's licence, a passport and/or be allowed to register a motor vehicle.
It is also essential to figure out how to integrate MHI with current schemes such as NHF and to deal with persons who already have insurance. The NHF should be phased out. The revenue being used to fund it should be placed into improving infrastructure, management and IT systems in public health facilities as well as cover the premiums for the poor. And persons who already have health insurance should be required to ensure their current package includes the services covered under the basic package.
Another likely issue with MHI is rising administrative and health-care costs caused by increased usage of health services in both the public and private sector. Increasing efficiency can reduce these costs. For example, introducing IT systems and technology to integrate and manage information between insurer and health provider is essential.
Additionally, decreasing the costs for collecting premiums and ensuring compliance could also lower overall health-care costs. Currently, public agencies only collect 60 per cent of statutory deductions and even private health insurers have significant shortfalls in their collection of premiums. Tackling this issue will involve collaboration to implement national capacity strengthening, public education and tying MHI to the essential/desirable services mentioned above.
Jamaicans like Rosie deserve to have quality, affordable and accessible health services, but this is only possible with an equitable and sustainable health-care financing mechanism. MHI, if implemented properly, can fulfil those criteria. Consequently, it provides a viable alternative to the current largely tax-funded health-care system.