Potential demand for voluntary community-based health insurance improvement in rural Lao People's Democratic...

In Lao People's Democratic Republic (PDR), community-based health insurance (CBHI) is the only voluntary insurance scheme; it typically targets self-employed people, most of whom reside in rural areas and are dependent on agricultural activities for subsistence. However, until very recently, the enrollment rate has fallen short and failed to reach a large percentage of the target group. To promote the CBHI scheme and increase demand, some supporting components should be considered for inclusion together with the health infrastructure component.

This paper provides empirical evidence that the benefit package components of hypothetical CBHI schemes have causal effects on enrollment probabilities. Furthermore, we examine the distribution of willingness to pay (WTP) in response to policy changes based on a sample of 5,800 observations.

A randomized conjoint experiment is conducted in rural villages in Savannakhet Province, Lao PDR, to elicit stated preference data. Each respondent ranks three options-two hypothetical alternatives and the CBHI status quo scheme. The levels of seven attributes-insurance coverage for medical consultations, hospitalizations, traffic accidents, pharmaceuticals and transportation; premiums; and prepaid discounts-are randomly and simultaneously assigned to the two alternatives.

The findings suggest that the average WTP is at least as large as 10.9% of the per capita income of those who live in rural areas, which is higher than the WTP for health insurance averaged across low- and middle-income countries (LMICs) in the literature. The component of round-trip transportation insurance coverage has a significant effect on WTP distribution, particularly increasing the share of the highest bin.

Therefore, the low CBHI scheme enrollment rate in Lao PDR does not necessarily imply low demand among the targeted population, as the finding from the WTP analysis illustrates potential demand for the CBHI scheme. Specifically, if transportation is addressed, enrollment is likely to significantly increase.