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). However, as SHI and tax-funded systems struggle to achieve UHC, one is left wondering whether private health insurance (PHI) is a feasible option and what its appropriate role should be. This paper seeks to shed more light on whether unsubsidized or subsidized PHI can be used to support UHC progress made by tax-funded 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.