Addiction to a bad idea, especially in low- and middle-income countries: Contributory health insurance

Despite limited evidence of successful development and implementation of contributory health insurance and low and middle income countries, many countries are in the process implementing such schemes. This com-mentary summarizes all available evidence on the limitations of contributory health insurance including the lack of good theoretical underpinning and the considerable evidence of inequity and fragmentation created by such schemes. Moreover, the initiation of a contributory health insurance scheme has not been found to increase revenues to the health sector or help health countries achieve universal health coverage. Low and middle income countries can improve equity and efficiency of the health sector by replacing out-of-pocket spending with pre-paid pooling mechanisms, but that is best done through budget transfers and not by contributory insurance that links payment to sub-population entitlements.

Automated summary

Despite limited evidence, many countries are implementing contributory health insurance schemes, which have several limitations including lack of theoretical basis, inequity and fragmentation. Initiation of such schemes does not increase health sector revenues or achieve universal health coverage. Low and middle income countries can improve equity and efficiency by replacing out-of-pocket spending with pre-paid pooling mechanisms through budget transfers rather than contributory insurance.