Insurance Uptake Intention, Actual Insurance Uptake, Social Capital and other determinants in the context of a community-based health insurance program in Nigeria

In Sub-Saharan Africa, population coverage of health insurance is quite low and out-of-pocket payments account for a substantial proportion of health expenditures. This paper explores the key determinants of health insurance uptake intention and actual uptake in the context of a community-based health insurance scheme in central Nigeria. Using data sourced from household surveys of 121 households and 829 household members, we exploit variation in uptake intention at baseline and actual uptake behavior at endline.

Results suggest that social capital and past formal health care utilization are positively related to both uptake intention and actual insurance uptake. I find that although over 86 percent of the study sample intend to purchase health insurance at baseline, only 24 percent had health insurance at the endline 55 weeks later. Factors that are important for actual uptake, but not uptake intention are age and household size as younger respondents and members of larger households are less likely to be insured at the endline. This explains to some extent the gap between uptake intention and actual uptake in the sense that although most respondents are interested and intend to obtain health insurance irrespective of household size and age, actual insurance uptake is driven by the perceived total cost to the household and rationalization as to which household members are most likely to need health care services (adverse selection).

These findings underscore the need for policy interventions such as information campaigns to help improve how health insurance is perceived and understood as well as targeted incentives to encourage full participation of households.