Health insurance is an important tool for achieving universal health coverage (UHC), defined as a state in which "all people have access to the health services they need, when and where they need them, without financial hardship."
Unfortunately, current health insurance coverage is
insufficient.
A recent study found only one in five people across fifty-six low- and middle-income countries (LMICs) had health insurance. Moreover, only seven of the studied countries had health insurance coverage above 50 percent, and only three countries had coverage above 70 percent.
An increase in health insurance coverage will also promote scientific and technological innovation in the health care sector, thus increasing total factor productivity and promoting economic growth further.
Expanding health insurance coverage will require increased investment in the health care sector, which is currently severely underfunded both in LMICs and globally.
A multicountry study found that in all but one of the studied countries, the share of gross domestic product (GDP) spent on health was far from the socially optimal share (i.e., the share that maximizes the welfare of the population), which was found to be 14-16 percent of GDP.
For example, in 2019, China spent only 5.4 percent of its GDP on health, Russia spent 5.7
percent, and India spent 3.0 percent.
Among the fifteen countries studied, only the United States reached the optimal share for health expenditure.
Expanding health insurance coverage is an imperative for populations around the globe.
Achieving superior coverage will require a shift in mindset to recognize that spending on health is not a waste of resources, but rather an investment that offers broad social and economic benefits.
Countries at all income levels should invest more in the health care sector and ideally increase the share of GDP dedicated to health expenditure to a socially optimal level.
Spending more on health and expanding insurance coverage will
enable countries to achieve UHC, promote socioeconomic development, and maximize the welfare of their populations. Did you enjoy today's newsletter? You can read more essays like this by becoming a Health Affairs Insider, where you can sign up for curated newsletters on health spending, health reform, social determinants of health, and health equity.
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