Socioeconomic inequality in premiums for a community-based health insurance scheme in Rwanda.

Abstract

Community-based health insurance (CBHI) has gained popularity in many low- and middle-income countries, partly as a policy response to calls for low-cost, pro-poor health financing solutions. In Africa, Rwanda has successfully implemented two types of CBHI systems since 2005, one of which with a flat rate premium (2005-10) and the other with a stratified premium (2011-present). Existing CBHI evaluations have, however, tended to ignore the potential distributional aspects of the household contributions made towards CBHI. In this paper, we investigate the pattern of socioeconomic inequality in CBHI household premium contributions in Rwanda within the implementation periods. We also assess gender differences in CBHI contributions. Using the 2010/11 and 2013/14 rounds of national survey data, we quantify the magnitude of inequality in CBHI payments, decompose the concentration index of inequality, calculate Kakwani indices and implement unconditional quantile regression decomposition to assess gender differences in CBHI expenditure. We find that the CBHI with stratified premiums is less regressive than CBHI with a flat rate premium system. Decomposition analysis indicates that income and CBHI stratification explain a large share of the inequality in CBHI payments. With respect to gender, female-headed households make lower contributions towards CBHI expenditure, compared with male-headed households. In terms of policy implications, the results suggest that there may be a need for increasing the premium bracket for the wealthier households, as well as for the provision of more subsidies to vulnerable households.