Is contributory health insurance indeed an addiction to a bad idea? A comment on its relevance for low- and middle-income countries.

Financing of health systems is an enduring concern world wide. Yazbeck and colleagues in their paper make an important point that when there is a choice between financing in which contributions from citizens take place in the form of generalised taxes versus those in which they are in the form of insurance premiums, the overwhelming evidence suggests that tax-based financing is unambiguously superior even in low- and middle-income countries. Despite the strength of their case against contributory insurance, we suggest that the path forward may be more complex than they envisage for a number of reasons. The problem of a high proportion of informal sector workers that they argue impacts contributory approaches is also an issue with taxes because of the very low numbers of people who file returns. Taxes in most developing countries are in fact largely derived from highly regressive indirect taxes which the poor are forced to pay. Additionally, in most developing countries, including large ones like India and Nigeria, the only choice on offer is continued dependence on out-of-pocket expenditures. In such a situation exploring alternatives which are superior to out-of-pocket expenditures becomes imperative. Asking citizens to wait interminably for additional tax resources to be made available would be a grave disservice to them.

Pathways to reimagining commercial health insurance in India.

In this paper we explore how India's growing commercial health insurance (CHI) segment can be reformed to deliver adequate financial protection and good health outcomes. We lay out key issues in the demand- and supply-sides of the insurance market that need to be addressed for CHI to be more aligned toward universal health coverage (UHC). On the demand side, we identify a consumer who strays far from the rational actor paradigm and therefore one whose needs require a fundamentally different approach than the one that commercial health insurance in India has so far taken. We lay out precisely the different stages involved in bringing a consumer to the insurance market and the conditions under which that consumer is likely to purchase insurance. On the supply side, we describe the many concerns that a new entrant into the commercial health insurance market must grapple with. We conclude with a set of pathways that brings the two sides of the market together to shed light on possible pathways for reform in the commercial health insurance sector in India. Despite the many challenges that this sector faces in India, we believe that there is room for optimism, and with the right amount of regulatory foresight, even room for radical transformation.