Introduction
Access to health insurance is known to have positive effects in improving access to healthcare services and serves as a mechanism for avoiding catastrophic healthcare expenditures which often plunge low resourced households into poverty [
1-
3]. It is estimated that globally, about 150 million people face catastrophic healthcare costs annually because of direct payments for healthcare while about 100 million are driven into poverty [
1]. One major global response to address this problem has been the implementation of prepayment schemes especially in low-and-middle income countries (LMICs) where majority of the population without health insurance lives [
1,
4,
5].
Since the mid 1990s, several LMICs have been implementing various types of health insurance programmes as a response to the global effort to move away from the reliance on out-of-pocket payment for health towards risk-pooling and risk-sharing arrangements [
1-
3,
6,
7]. As was the trend in several African countries in the 1990s, Ghana began to witness the establishment of several community health insurance (CHI) schemes as part of what has been described as the ‘African CHI movement’ due to the rapidity of their growth on the continent [
8,
9].
In 2004, Ghana began the implementation of a National Health Insurance Scheme (NHIS) following the passage of the National Health Insurance Act (Act 650) in 2003. The NHIS has an overall goal of ensuring equitable access to quality basic healthcare for all residents, without having to make out-of-pocket payments at the point of service. Despite the huge potential benefits associated with access to health insurance, enrolment into the NHIS has not been as high as expected after a decade of implementation. Only 34% of Ghana’s population of 24.6 million are active members (i.e. valid card holding members) [
10]. This figure is considered low given the fact that the NHIS premium and registration fee are relatively low and there is a comprehensive premium exemption package for a large section of the population. The low enrolment in the NHIS presents a major challenge towards achieving the goal of universal coverage [
11].
Low enrolment in voluntary health insurance schemes in LMICs is common and has been attributed to several factors including the lack of adequate consumer information, lack of understanding of the insurance concept and the benefit package among the target population, lack of trust in insurers, perceived poor quality of available healthcare services, poverty, unaffordable premiums, unfavourable timing of the premium payment, institutional rigidities, large informal sector and low levels of education, among others [
4,
6,
12-
18]. While many of these factors have been observed in Ghana, affordability of the premium and registration fee (i.e. NHIS contributions) continues to be reported by non-members of the NHIS as the most important barrier to enrolment and retention in the NHIS [
19-
25].
Empirical studies in the United States of America (USA) have suggested that health insurance premiums could be affordable to most of the uninsured including some low income families [
26-
28]. What constitutes affordable premium however lacks a clear economic definition, though attempts have been made to estimate it in the developed world [
27-
29]. In the few studies in Africa which have looked at the premium as a barrier to enrolment or retention in health insurance schemes, attempts have not been made to estimate what constitutes affordable insurance contributions [
13,
14,
30,
31], though few have analysed household capacity to pay the insurance premium [
32,
33]. These studies have reported mixed results on whether affordability is the main barrier to enrolment. For instance, in a review of the impact of mutual health organisations in West Africa, Chankova et al. [
34] report that premium payments can be unaffordable to many households even when small and can therefore become a major barrier to enrolment. Diop [
32] however observed that the majority of households surveyed in the Thies region of Senegal had the ability to pay insurance contributions as the incidence of insurance contribution was about 1.2% of total household expenditures and about 5% of non-food expenditures. Findings from another study in Burkina Faso suggested that the low demand for community-based insurance may be due to institutional rigidities rather than to poverty per se [
13].
Previous empirical studies on equity in the NHIS either at the individual or household levels have reported a strong association between high socio-economic status and NHIS membership suggesting that the ‘poor’ are excluded from the NHIS because they cannot afford membership [
19,
20,
22,
24,
25]. However, in a recent anthropological study in the Central and Eastern regions of Ghana, Kotoh [
21] observes that “enrolment does not neatly correlate with economic status” and that the “no money to pay premium response” often cited by majority of the uninsured is a “convenient excuse to rationalise non-enrolment and non-renewal of membership”. In another study on equity in the two main cities of Ghana, Amporfu [
35] also reports that ‘the premium is likely to impose catastrophic expenditure on a small minority of the poor’.
The World Health Organisation (WHO) has recently observed that the current global coverage of financial risk protection falls far short of universal coverage [
1,
36]. In light of the global interest in achieving universal health insurance coverage especially in developing countries, Ghana needs to do more to achieve that goal by ensuring that households enrol all their members in the NHIS. This however raises a concern about affordability in the face of the numerous complaints about the NHIS contributions by households, though what constitutes affordable contributions to households have not been studied. This study examines the affordability of the NHIS contributions to households by assessing the reasons for not enrolling and by estimating the expected annual NHIS contributions for full insurance across uninsured, partially insured and fully insured households. This is aimed at understanding whether households in Ghana are ‘too poor’ to afford enrolment in the NHIS and the extent to which the NHIS contribution would be a burden on their resources. We also aimed at identifying households that cannot afford to have full insurance for their members.
The rest of the paper continues with a brief overview of the NHIS in section two, while section three deals with the methods; study design, data collection and statistical analyses. Results are presented in section four, while section five presents the discussion and conclusion.
An overview of Ghana’s NHIS
The National Health Insurance Act (Act 650) of 2003 permits the establishment and operation of three types of health insurance schemes in Ghana. They include the district mutual health insurance schemes, private commercial health insurance schemes and private mutual health insurance schemes. The private commercial schemes operate as limited liability companies, while the private mutual schemes are organised by individual groups of persons for their own benefit. Both types do not receive any financial support from the government. By Act 650, districts are to establish their own district mutual health insurance schemes (DMHIS). The DMHIS are autonomous from each other but all operate under the National Health Insurance Authority (NHIA). The new NHI Act of 2012 (Act 852) merges all the DMHIS to form a nationwide National Health Insurance Scheme (NHIS) which every resident of Ghana shall belong to [
37]. The NHIA provides subsidy from the National Health Insurance Fund (NHIF) to the DMHIS for their operations. The state sponsored DMHIS are the dominant health insurance schemes across the country and operational in all the districts of Ghana. A member of the NHIS may also belong to a private health insurance scheme as stipulated by Act 852. This study focuses on the NHIS comprising of the DMHIS because that is public and of national interest.
The NHIA has five main sources of funds for its operations. The NHI Levy which is a 2.5% value added tax (VAT) on selected goods and services which accounts for about 60% of the total revenue making it the major contributor to the NHIF. The other sources of revenue to the fund include a mandatory 2.5% deduction from formal sector workers’ social security contribution managed by the Social Security and National Insurance Trust (SSNIT), sector budgetary support allocated by the Parliament of Ghana, income accruing to the NHIF from investments made by the NHI Council and grants, fees, donations, gifts and voluntary contributions made to the Fund [
37]. The premiums paid by members is another source of funds but this accounts for less than 5% of the total inflows to the NHIS [
38].
Membership in the NHIS is at the individual level and supposed to be mandatory by law for all residents of the country. According to Act 852, all employers are also obliged to ensure that all their employees are registered under the NHIS. Individual adults aged 18–69 years in the informal sector pay annual premiums (i.e. direct premium-paying adults) as determined by the DMHIS and approved by the NHIA. The premium ranges between 7.2 Ghana Cedis (GhȻ) (US$4.8) to GhȻ48.0 (US$32) depending on the socio-economic status (SES) of the individual. However due to the difficulty in determining SES of people in the informal sector, the premium is in practice set at a flat rate and varies from district to district. Formal sector workers whose premiums are deducted from their social security contributions (i.e. SSNIT contributors) are exempted from direct premium payments to the scheme to become members. They are however not automatic members of the NHIS unless they decide to enrol with a DMHIS of their choice by paying a registration fee. In 2011, SSNIT contributors constituted only 4.3% of the total active membership of the NHIS [
38].
The NHI Act 852 exempts children under 18 years from paying the premium if at least one parent or the guardian is a valid card holder of the NHIS (this clause in the LI 1809 has been scrapped by the new Act 852 of 2012 though the legislative instrument for its implementation is not yet out). The registration of children under five years has however been decoupled from that of their parents since 2010 and therefore they can be registered even if their parents are not registered. The elderly (≥70 years), SSNIT pensioners, core poor indigents identified by communities and pregnant women (for ante-natal, delivery and post-natal healthcare services) are also exempted from paying premiums to become members of the scheme. Apart from the indigents and pregnant women, all exempt populations are required to pay a registration fee of GhȻ4.0 (US$2.7) but the fee could vary depending on the district scheme.
The NHIS has a comprehensive benefit package which covers over 95% of disease conditions in Ghana [
38]. The benefit package however excludes treatment for cancers apart from breast and cervical cancers, HIV retroviral drugs, dialysis for chronic renal failure, hormone and organ replacement therapy and few others.
Discussion
Ghana’s NHIS is relatively young and faces many pressures to succeed [
49]. Though enrolment has progressed over the years since 2004, the current active enrolment rate of 34% of the population is below expectation and a major challenge towards the attainment of universal coverage. There is every indication that the awareness level of the NHIS among households is high and the benefits of enrolment are well known [
20-
22,
50]. The question that needs critical assessment is why enrolment is just about a third of the population even in the face of the comprehensive benefit package and generous exemption policy. This paper intended to examine whether affordability of the NHIS contribution at household level is a barrier to enrolment in the face of the persistent complaints about the NHIS contribution by households. This is an effort to understand the cost of having full insurance by households and the extent to which the NHIS contribution is a burden on household economic resources.
First of all, our results show that household size, the demographic composition of the household and its socio-economic status (SES) influence whether a household would become uninsured, partially insured or fully insured with the NHIS. While the size of the household and its demographic composition have direct effects on the total NHIS contribution, the SES of the household gives an indication of its ability to pay. Jehu-Appiah et al. [
20] report of a negative effect of household size on enrolment in the NHIS. Our results show that the partially insured and uninsured households had larger household sizes and more children. Though uninsured and partially insured households could make good use of the existing premium exemption policy for children, the large numbers would still make the cost of full insurance higher. Policy to increase enrolment should aim at having special incentives to reduce the cost of full insurance for larger households.
The results of the affordability analysis suggest that about 66% of the uninsured and almost 70% of the partially insured households could afford to enrol all their members in the NHIS. Enrolling all household members in the NHIS is also not expected to exert a heavy burden on the majority of households as they would be expected to spend 5.9% of their non-food expenditures or only 2.0% of total expenditure on health insurance. This is close to the 5.0% and 1.2% reported by Diop [
32] in the study in Senegal. A recent study [
51] in Ghana suggests that about 30% of the 65% of the NHIS members who are exempted from paying premiums could indeed afford to contribute. It further adds that there were many people in the informal sector who have ‘simply not enrolled either because they do not understand the value of insurance or because they are healthy and unlikely to use services’ [
51]. For such persons it is not about lack of ability to pay but possibly lack of willingness to pay because they may not see or have the need for it even if it is affordable as reported in this study by some “healthy” households. For these households, they would choose a particular insurance decision (e.g. uninsured, partially insured or fully insured) which maximises their expected utility weighing it against the cost of enrolment [
52]. This observation is not peculiar in Ghana’s case. In the USA, Levy and DeLeire [
26] report that even for persons in the same lowest expenditure group, the uninsured spent more on housing, alcohol, tobacco and education than the insured suggesting that they could possibly have paid for health insurance. This observation is also consistent with the finding by Bundorf and Pauly [
27] which suggested that majority of the uninsured in the USA could afford to purchase health insurance.
Notwithstanding the finding that the majority (71%) of households can afford full insurance, the results also highlight the concern that enrolment in the NHIS is not pro-poor despite the premium exemption policy [
19,
20,
24]. Households in the lower socio-economic quintiles were less likely to have full insurance and likely to complain that their NHIS contributions were expensive as shown by their significantly higher expected contributions. While the NHIS contribution would be affordable to households in the rich quintiles, the same cannot be said about households in the lower quintiles. For households in the first and second quintiles to use 11.4% and 7.0% of their respective total non-food expenditure on health insurance could impose a heavy burden on them. The fact that the households (29%) identified as unafforders were found in the two lower socio-economic quintiles calls for a review of the current flat rate of premium paid by all residents in a district irrespective of their socio-economic status.
It is known that people with low health status are more likely to demand health insurance [
6,
8,
17]. This is because in voluntary insurance schemes where premiums are not related to individual risk levels, high-risk individuals see the premium as low given their high expected benefit from enrolment [
27]. This may explain why partially insured households were more likely to insure their members with chronic health conditions or those whose health status were perceived to be fair or poor. The fully insured households also reported more chronic health conditions. These observations could be situated in Nyman’s argument that people purchase health insurance because of the access motive [
53]. Thus, without health insurance, many households would not be able to gain access to expensive but most needed healthcare due to their inability to pay for healthcare. By this, it is possible that low income households which attach more value to good health would be more likely to buy health insurance because it helps them to ‘afford’ costly healthcare [
54]. Perhaps this is why some households which were identified as unafforders had managed to have full insurance for all their members.
From the health insurance literature, the decision to buy health insurance in many LMICs is influenced by attributes of the insurer, health system factors and country specific contextual factors apart from the socio-economic status of households [
4,
6,
12-
18]. This is why in addition to addressing issues relating to affordability and equity in enrolment, it is equally important to give attention to the other reasons cited by about 14% of the uninsured and partially insured households for non-membership in the NHIS. The reasons such as perceived poor quality of health services, convenience of the enrolment procedure, lack of trust in scheme officials, inadequate benefit package, long distances to health facilities, negative provider attitude and other systemic factors associated with the NHIS need equal attention to attract more members [
19,
20,
22,
54-
56]. A high proportion of the uninsured and partially insured households which made these complaints were in the fourth and fifth socio-economic quintiles. This means that many of such households could afford to enrol in the NHIS if the problems associated with the scheme are addressed adequately. In exploring how people’s perception about the NHIS influence enrolment and retention in the scheme, Jehu-Appiah et al. [
20] observe that for the poor, favourable perceptions about the scheme relating to the benefits of the NHIS and convenience of scheme administration had significant and more positive effects on enrolment than perceptions about the price of enrolment. For instance, our results show that uninsured and partially insured households lived longer distances from NHIS accredited health facilities. As explained by Durairaj et al. [
49] economically, rational people will not pay for services that are not available or are more difficult to access due to physical barriers to the extent they cannot derive the full benefits of membership.
Limitations
This study has some limitations which could affect our results. First of all, the estimation of the expected annual NHIS contributions for households did not take account of indigents (i.e. destitutes) and pregnant women who are exempted from paying the premium and registration fee to enrol in the NHIS. Such persons were not captured by the household survey but having many of them in a household could reduce the cost of full insurance. Not all pregnant women in the households may however benefit from this exemption package either because they refuse to register for it or had enrolled prior to the pregnancy and therefore do not need a new one. We did not have such data.
It is also important to acknowledge that the normative definition of affordability used for the study is subjective and may have its own methodological and theoretical challenges as well as a lack of common acceptance of what constitute affordable premium [
28,
29]. For instance, some insured households categorised as “insured unafforders” could have borrowed to finance their enrolment which they may not be able to repay or could become a heavy burden on future household resources [
28]. The consumption expenditure data used for the various measurements were self-reported by households and could suffer from recall errors which could bias the estimates, though quality control measures were adhered to during the data collection exercise. In addition to the use of the quantitative method, the issues of affordability could have been explored further by the use of qualitative methods. This would have made it possible to have a deeper understanding of the enrolment behavour of households. Finally, the lack of a more current national poverty line did not make it possible for us to assess how reliable our estimated poverty line is. Notwithstanding these limitations, the findings from the study are believed to reflect the general situation in the ecological zones the districts represented.
Conclusion
This study has shown that majority of households without health insurance could afford full insurance with a minimum burden on their resources despite the complaints about the premium and the registration fee. Households which can afford to enrol all their members but have refused to do so must be enticed with innovative approaches to increase coverage. In the medium to long term, enforcement of the National Health Insurance Act which makes membership in the NHIS mandatory for residents of the country would be a positive step towards achieving universal coverage. One way of doing so could be to make the NHIS membership cards a requirement to access important services such as the acquisition of national passports, driving license and opening of bank accounts for adults as a way of getting more households to enrol in the NHIS. This would force people to register with NHIS, either by use of own means or by applying for exemptions. While relatively easy to implement in practice, such a policy may however meet political opposition and would need a well-developed exemption system to be in place.
Consideration should also be given to some of the factors which have direct effect on the cost of enrolment. Since large household size has negative effect on enrolment, abolishing of the registration fee for children who are exempted from paying the premium would be a positive step. For low resourced households who cannot afford full insurance, effective targeting of the premium exemption policy could benefit them. For instance, expansion of the livelihood empowerment against poverty (LEAP) program which is a cash transfer intervention to provide financial assistance to the extreme poor and vulnerable households which also gives them free enrolment in the NHIS could increase coverage of the scheme. Policy should also aim at reviewing the NHIS contributions to reflect the socio-economic status of households instead of the current flat rate for all which exert a heavy burden on poor households.
Finally, attention should be given to the non-financial factors which are equally inimical to enrolment in the NHIS. Addressing any institutional and systemic bottlenecks on the part of the insurer and service providers such as improvement in physical access to healthcare, reducing waiting time at health facilities and making the enrolment procedure more convenient to clients would enhance the drive towards achieving universal coverage of the scheme.
Competing interests
The authors declare that they have no competing interests.
Authors’ contributions
AK, UE, KSH and FAA made substantial contributions to conception and design of the study as well as the acquisition of data. AK managed and analysed the data. All authors contributed to the interpretation of the data. AK drafted the manuscript while UE, KSH and FAA contributed to its revision. All authors read and approved the final manuscript.