Abstract

Healthcare is a fundamental human right, and access to affordable healthcare services is crucial for a population’s well-being. Health insurance plays a pivotal role in determining the affordability of healthcare services. The primary purpose of this study is to investigate the role of health insurance in making healthcare services more affordable. The study adopted a cross sectional research design. Data for this study was gotten with the help of a structured questionnaire and analysed using both descriptive and inferential statistics.

Results from the logit regression revealed significant effects of health insurance on the affordability of healthcare services in the Buea municipality. Specifically, individuals with health insurance reported lower co-insurance and reduced financial strain when seeking healthcare services.  Low co-insurance cost shows an estimated average marginal effect of -0.2216 on the predicted probability of affordability of healthcare services. Negotiated rates exhibit an estimated average marginal effect of -0.1504.

Preventive care coverage demonstrates an estimated average marginal effect of 1.4825 on the predicted probability of affordability of healthcare services. Income levels had estimated average marginal effect of -0.0262. Policy makers and insurers should consider enhancing the benefits offered by health insurance plans. This may include reducing deductibles, co-payments, and coinsurance rates, particularly for essential healthcare services and preventive care. Such measures can further improve the affordability and accessibility of healthcare services.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The affordability of healthcare services has been gaining popularity around the world for several years. Studies have considered health insurance essential for the affordability of healthcare services. The global health insurance market size reached US$ 1,714.0 Billion in 2022. Looking forward, International Market Analysis Research and Consulting (IMARC) Group expects the market to reach US$ 2,599.8 Billion by 2028, exhibiting a growth rate (CAGR) of 7.11% during 2023-2028 (IMARC Group, 2021). Health insurance protects an insured individual against financial losses arising due to a medical emergency. It covers medical treatment expenditures such as ambulance charges, doctor consultation fees, and hospitalization, medicines and day-care procedures costs.

The pay-out is generally either made on actual expenses incurred in the hospital using original medical bills or diagnosis of diseases without submitting bills. Health insurance also provides easy access to medical treatment with a cashless facility at network hospitals of the insurer. Apart from this, health insurance also provides tax benefits for a vast array of medical conditions. Nowadays, various health insurance companies are offering coverage for domiciliary treatment, wherein medical supervision is provided at home for specific diseases.

In terms of regional trends, the report suggests that North America is currently the largest market for health insurance, accounting for a significant share of the global market. According to a report by Statista, in 2020, North America accounted for approximately 49.2% of the global health insurance market based on gross written premiums. This indicates that almost half of the global health insurance market was attributed to North America. This is primarily due to the high healthcare costs in the region and the presence of several established insurance providers (IMARC Group, 2021). However, the report also notes that the Asia-Pacific region is expected to experience the fastest growth in the health insurance market over the forecast period. This is attributed to the growing middle class in the region and increasing government initiatives to expand healthcare coverage. The global health insurance market is expected to continue growing in the coming years, driven by factors such as rising healthcare costs and increasing awareness about the benefits of health insurance. The adoption of technology is also expected to play a key role in the industry’s growth, as insurers seek to improve efficiency and enhance the customer experience.

The increasing costs of healthcare services, in confluence with the growing prevalence of diabetes, cancer, stroke and kidney failure, represent one of the key factors escalating the demand for health insurance worldwide (Anderson, Dobkin & Gross, 2012). Moreover, governing agencies of several countries are making it necessary for employers to provide health insurance to their employees. These agencies are also enforcing laws that mandate international health insurance for tourists. Apart from this, the rising geriatric population is promoting the adoption of government health insurance programs or schemes offered at low premium rates. Furthermore, growing health awareness and improving healthcare infrastructure are other factors bolstering the market growth (Chowdhury, Sium & Anwar, 2021). Besides this, various companies are providing cover for medical expenses incurred during the treatment of corona virus disease (COVID-19). They are also focusing on digitizing claim processing and policy management, which is anticipated to influence the market positively in the coming years.

Health insurance plays a significant role in the affordability of healthcare services in the developed world. In countries such as the United States, where healthcare costs are among the highest in the world, health insurance coverage can be crucial in ensuring that individuals have access to necessary medical care without incurring exorbitant costs. According to a report by the Commonwealth Fund, individuals with health insurance in the US are less likely to experience financial barriers to care and are more likely to receive preventive services than those without insurance (Collins et al., 2020). In the United States, where health insurance is primarily provided through employers, there are additional problems associated with the system. Individuals who do not have access to employer-sponsored insurance may struggle to afford coverage on their own, as the cost of premiums can be prohibitively high (Kaiser Family Foundation, 2022). Furthermore, even those with insurance may face high co-insurance costs, such as deductibles and copayments, which can deter them from seeking necessary medical care (Collins et al., 2020).

Health insurance is essential for the affordability of healthcare services in the developed world. In countries such as Canada, the United Kingdom, and France, where universal healthcare is provided, health insurance coverage is guaranteed for all citizens, ensuring that they have access to necessary medical care without financial burden (OECD, 2021). Even in countries with universal healthcare, there are problems with health insurance. For instance, waiting for non-urgent medical procedures can be long, leading some individuals to seek private healthcare services outside the universal system (Barua & Ren, 2020). In some cases, individuals may choose to pay co-insurance for medical care that is not covered by their insurance, which can be expensive and limit their ability to access other essential services.

A significant problem with health insurance in Africa is the lack of understanding and awareness among the population about the importance of having health insurance coverage (Kirigia et al., 2018). Many individuals may not understand how insurance works, or they may not be aware of the insurance options available to them. This lack of awareness can prevent individuals from seeking out insurance coverage, even if it would be beneficial for them. The consequences of these problems can be severe. Without access to affordable health insurance, individuals and families may struggle to pay for necessary medical care, leading to financial hardship and potentially negative health outcomes (Mukumbang et al., 2019). Additionally, limited access to medical care can exacerbate existing health disparities and lead to higher rates of morbidity and mortality in low-income and vulnerable populations (Kirigia et al., 2018). While health insurance can play a critical role in making healthcare services more affordable and accessible in Africa, there are significant challenges associated with the system that need to be addressed.

Health insurance has a critical role in making healthcare services more affordable and accessible in Africa, where many individuals struggle to access necessary medical care due to high costs and low income. Observations suggest that health insurance coverage is relatively low in many African countries, with less than 10% of the population having access to health insurance in some countries (WHO, 2021). This lack of coverage can lead to financial barriers to care and may result in individuals delaying or forgoing necessary medical care. One significant problem with health insurance in Africa is the cost of premiums. Many individuals and families, particularly those with low incomes, may struggle to afford health insurance premiums, even if they recognize the importance of having insurance (Mwase et al., 2019). Additionally, there are limited options for affordable insurance plans, making it difficult for individuals to find coverage that meets their needs.

Health insurance coverage in sub-Saharan Africa is generally low, with a small percentage of the population having access to health insurance (Ataguba & Bazargan-Hejazi, 2015). This low coverage can be attributed to various factors, including the limited availability of insurance options and the high cost of premiums, which make insurance unaffordable for many individuals and families. Health insurance in sub-Saharan Africa is the limited benefits that are offered under many insurance plans (Bazargan-Hejazi & Amin-Esmaeili, 2016). In many cases, insurance plans cover only a limited range of services, leaving individuals responsible for paying for additional medical expenses out of pocket. This limited coverage can lead to financial hardship for individuals and families and may discourage individuals from seeking out medical care when they need it.

Health insurance schemes in the region are often fragmented and uncoordinated, leading to duplication of efforts and inefficiencies (Mwabu, 2016). This fragmentation can make it difficult for individuals to navigate the system and can lead to gaps in coverage, ultimately resulting in higher co-insurance expenses for medical care. Another problem associated with health insurance in sub-Saharan Africa is the lack of trust in insurance providers (Ataguba & Day, 2015).

Many individuals are hesitant to enroll in insurance plans due to concerns about the reliability and transparency of insurance providers, as well as fears of fraud and mismanagement. Fragmentation and inefficiencies in health insurance schemes can lead to higher costs for both individuals and the healthcare system as a whole (Mwabu, 2016). The lack of trust in insurance providers can result in low enrollment rates and limited access to insurance coverage, which can in turn exacerbate existing health disparities and lead to negative health outcomes.

Buea Municipality, located in the Southwest Region of Cameroon, has experienced significant changes in the demand and affordability of healthcare over the years. The historical background of these factors provides valuable insights into the healthcare landscape in the region. Prior to the 20th century, healthcare services in Buea Municipality were limited and primarily provided by traditional healers and missionaries. The demand for healthcare was relatively low, mainly due to the population’s reliance on traditional medicine and cultural beliefs. Affordability was also a challenge, as accessing healthcare services often required traveling long distances to other towns or cities.

However, with the establishment of the Buea Regional Hospital in the mid-20th century, the demand for healthcare services began to increase. The hospital provided a wider range of medical services and attracted patients from Buea Municipality and neighboring regions. This led to a growing demand for healthcare facilities and professionals in the area. In recent years, the demand for healthcare in Buea Municipality has been further influenced by various factors, including population growth, urbanization, and increased awareness of the importance of healthcare. The municipality has experienced a steady rise in population due to rural-urban migration, leading to an increased need for healthcare services to cater to the growing population.

Affordability of healthcare in Buea Municipality has been a significant concern. Cameroon, like many other developing countries, faces challenges related to healthcare financing and accessibility. According to a report by the World Bank (2019), co-insurance payments account for a substantial portion of healthcare expenses in Cameroon. This places a burden on individuals and households, particularly those with low incomes, making healthcare services less affordable for many residents of Buea Municipality. In recent years, the Cameroonian government has taken steps to address the issue of healthcare affordability. Initiatives such as the National Health Insurance Scheme (NHIS) have been introduced to provide financial protection and improve access to healthcare services for the population. However, the full implementation and impact of these initiatives in Buea Municipality are still being evaluated.

Cameroon is one of the countries in sub-Saharan Africa where access to affordable health care is a major challenge for many people. The role of health insurance in making health care more affordable in Cameroon is significant, but there are also several issues that limit its effectiveness. Health insurance coverage in Cameroon is limited, with only around 3% of the population having access to health insurance (World Bank, 2021).

This low coverage is due in part to the high cost of insurance premiums and limited awareness of the benefits of health insurance among the population. The quality of healthcare services in Cameroon is often poor, with a shortage of qualified healthcare professionals and inadequate infrastructure (WHO, 2021). This can make it challenging for health insurance to provide meaningful access to high-quality healthcare services.

Check out: Insurance Project Topics with Materials