The financial protection effect of Ghana National Health Insurance Scheme: evidence from a study in two rural districts

One of the key functions of health insurance is to provide financial protection against high costs of health care, yet evidence of such protection from developing countries has been inconsistent. This article uses the case of Ghana to contribute to the evidence pool about insurance’s financial protection effects. It evaluates the impact of the country’s National Health Insurance Scheme on households’ out-of-pocket spending and catastrophic health expenditure.

The findings include:

• at the time of the survey, insurance coverage was 35 percent
• insured people still incurred out-of-pocket payment for care from informal sources and for uncovered drugs and tests at health facilities
• insured people paid significantly less than the uninsured
• insurance had a protective effect against the financial burden of health care, reducing significantly the likelihood of incurring catastrophic payment. The effect is particularly remarkable among the poorest quintile of the sample.

The article concludes that the results are encouraging for many low income countries who are considering a similar policy to expand social health insurance. Ghana’s experience also shows that instituting insurance by itself is not adequate to remove fully the out-of-pocket payment for health. Further works are needed to address the supply side’s incentives and quality of care, so that the insured can enjoy the full benefits of insurance.