Combining Private and Social Health Insurance in Low- and Middle-Income Countries

An increasing number of low- and middle-income countries (LMICs) have turned to social health insurance (SHI) to achieve universal health coverage (UHC). Gaps in the provision of UHC, however, has turned attention back to PHI, with health planners wondering what the appropriate role of PHI is. This paper seeks to shed more light on whether voluntary PHI markets can exist in LMICs, and whether it is feasible to use unsubsidized or subsidized PHI to fill the gaps left by tax-funded public health systems or SHI. The paper argues that PHI is best positioned to offer supplementary coverage to those who remain part of SHI, and for those who opt out (for the rest of their lives), PHI should offer the minimum essential package or the minimum plus supplementary coverage. It finds that implementation of SHI legislation may be the catalyst for the emergence and growth of PHI, and health planners who prefer PHI should consider starting their reforms with SHI. PHI can help achieve UHC objectives as long as private insurers do not operate in a vacuum without public regulatory oversight and as long as the dynamics of insurance buying and selling under PHI is not so different from SHI.