There is a lot of focus on providing access to health insurance in many global health policy discussions – calls for universal access to health insurance are common.  But what does providing access to health insurance actually do?  Improving financial access to health services and reducing the likelihood of catastrophic health expenditures are important stated priorities for most health reforms but the actual ability of health insurance reforms to achieve these goals is not well understood.

A new paper by my former classmate Sebastian Bauhoff out this month in Health Economics examines this question investigating the impact of the rollout of health insurance in Georgia, a middle-income country. In Georgia, the government subsidizes the purchase of health insurance for the poor through tax financed vouchers through its Medical Insurance Program for the Poor.  Households then use these vouchers to purchase insurance from private insurance companies.  Using a regression-discontinuity study design the authors are able to evaluate the impact of the health insurance by comparing outcomes of eligible households to those not eligible for the insurance.  The paper is able to look a a wide array of outcomes, which is one of the real strengths of this paper.

They find that the health insurance program:

….reduces out-of-pocket expenditure among program beneficiaries, increases the proportion of care provided at reduced price or for free, and lowers the risk of moderate and catastrophic expenditures

Like many other similar papers of health insurance expansion, the authors find little impact of the program on self-reported health status, health system responsiveness (satisfaction), and the use of preventive health-care services and health-related behaviors.  Of course, in the long-run this might change, but it seems that we should not expect short-run effects on many of these indicators.

The impact of every new insurance scheme has to be evaluated locally – no two countries adopt identical health insurance schemes and implementation of the program will also matter, even locally within a given country, all of which will eventually influence the impact of the programs.  It is precisely for this reason that we need many rigorous examinations, such as this one, of these experiences.  This paper is an important new contribution to this literature.

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1 Response » to “What does health insurance do?”

  1. Stacyann Forrester says:


    I wasn't able to access the full paper so my comment might suffer from a lack of complete information.

    What the researchers found (reduction of out-of-pocket cost) is what I expect health insurance to do. Improvements in health is not something health insurance inherently does. Improvements in health is something that happens over time as the health system itself has time to react to the needs of the consumer. Did the authors look at whether or not the group with health insurance utilized health services more? Also when someone came into a clinic were they made aware of availability of other services? Insurance alone can't solve health system issues.

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