Evaluating the Impact and Effectiveness of Community-Based Health Insurance Policy Among Informal Sector in Lagos State Using Donabedian Model

Understanding Health Insurance

Health insurance is one of the health financing mechanisms put in place to mitigate the effect of catastrophic out-of-pocket payment experienced by the vulnerable members of the societies when they fall sick. The combined pulling of resources to cater to the needy in the time of emergency constitutes the cardinal goals of the health insurance scheme. Thus, health insurance like every other insurance scheme is a way of paying for health care that protects you from paying the full cost of medical services when you are injured or sick. In the opinion of Marcinko (2006), health insurance represents a pre-payment arrangement that benefits the contributors whenever injury or sickness arises. The coverage of health insurance could include damages resulted from accidents, hospital bills, sudden death, disabilities, and dismemberment. Health insurance is of different types, it can be National or mandatory health insurance in which there is a legal obligation for the community members to make a compulsory donation to the pool and this is based on the principle of social solidarity (Collins, Saya and Kunda, 2016). This type of health insurance is often used interchangeably as national or social health insurance. In the National Health Insurance, the collection of premiums is usually through the payroll deduction by the government and covers exclusively those working within the formal sector. We equally have private health insurance in which the company organised for its employees which can voluntary or mandatory. Health insurance could also be voluntary and community based. This is usually managed by the members of the community for-not-profit basis. It is often referred to as community-based health insurance (United Nation Health Committee Report, 2012). The former is often times employment based and is reserved for the high-income groups (Chawla & Berman, 1996). The latter is based on three principles, which are self-reliance, prepayment and community cooperation (Hsiao, 2001). Evidence from the foregoing shows that health insurance is very significant because it helps people to solve health problems on time and also assist them to get treatment in the event of chronic health situations that could lead to death when one is unable to afford the huge out-of-pocket payment expended at the hospitals.