Accra, Ghana October 19-23, Extending Health Insurance: How to Make It Work DESIGN ELEMENT 3: POPULATION COVERAGE October Hong Wang, MD, PhD HS20/20 Project

Feasibility of Insurance Design and Implementation Monitoring and Evaluation Insurance Financing options Benefits package Population coverage Opera- tional process Organiza- tional structure Provider engage- ment Figure 1: Design Elements for a Health Insurance Scheme

Objectives of this Element Identify different types of populations to be covered by health insurance (the beneficiaries) Determine how to plan for the expansion of health insurance to new beneficiary groups Understand the factors that need to be considered when expanding health insurance to new beneficiary groups

Universal Coverage Population coverage Benefit coverage Trade-off between population coverage and benefit coverage

Trade-off between Population and Benefit Coverage Population coverage Benefit coverage

Adverse Selection When potential consumers know their own risk levels but insurers are unable to distinguish among risks High-risk consumers are able to purchase insurance at a premium that is based on a lower-risk group Death Spiral can happen due to adverse selection (Rothschild & Stiglitz 1976, Feldstein 1993, Pauly 1999)

Population-service matrix Level of servicesUrban PopulationRural Population Public sector employees Private sector employees Self-employed/ unemployed Public sector/ employees Private sector employees Self- employed/ Farmers Comprehensive Package of Health Services (CPHS) Expanded-BPHS (EBPHS) Basic Package of Health Services (BPHS)

Population-service matrix Level of servicesUrban PopulationRural Population Public sector employees Private sector employees Self-employed/ unemployed Public sector/ employees Private sector employees Self- employed/ Farmers Comprehensive Package of Health Services (CPHS) Expanded-BPHS (EBPHS) Basic Package of Health Services (BPHS)

A Case from China: Types of Health Insurance - Tax-based health insurance G + I - Employment-based health insurance Er + Ee - Subsidized community-based health insurance I + G - Individual private-based health insuranceI + Er

Table 1. Population-service matrix and current financing status in China before 1980 Level of services Urban PopulationRural Population Public sector employees Private sector employees Self- employed/ unemployed Public sector/ employees Private sector employees Self- employed/ Farmers Comprehensiv e Package of Health Services (CPHS) Expanded- BPHS (EBPHS) Basic Package of Health Services (BPHS)

Table 2. Population-service matrix and current financing status in China during Level of services Urban PopulationRural Population Public sector employees Private sector employees Self- employed/ unemployed Public sector/ employees Private sector employees Self- employed/ Farmers Comprehensiv e Package of Health Services (CPHS) Expanded- BPHS (EBPHS) Basic Package of Health Services (BPHS)

Table 1. Population-service matrix and current financing status in China after 2003 Level of services Urban PopulationRural Population Public sector employees Private sector employees Self- employed/ unemployed Public sector/ employees Private sector employees Self- employed/ Farmers Comprehensiv e Package of Health Services (CPHS) Expanded- BPHS (EBPHS) Basic Package of Health Services (BPHS)

Feasibility of Insurance Design and Implementation Monitoring and Evaluation Insurance Financing options Benefits package Population coverage Opera-tional process Organiza- tional structure Provider engage- ment Figure 1: Design elements for a health insurance scheme

System Equity Financial contributions based on wealth- vertical equity in financing Service utilization based on need - horizontal equity in service

Discussion Questions Is it possible to increase both population and benefit coverage without increasing the total financing resources and how to do it? How can we mitigate/eliminate adverse selection? What other options exist to identify groups in the population-service matrix?

Accra, Ghana October 19-23, Extending Health Insurance: How to Make It Work Thank you