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Voluntary Health Insurance Serves the Healthy and Wealthy

Voluntary health insurance schemes tend to enhance access to healthcare for those who are not much in need.

STUDY'S AUTHOR:

Elena SeleznyovaSenior Research Fellow, Centre for Comprehensive Social Policy Studies, HSE Institute for Social Policy.
 

Voluntary Health Insurance (VHI) can perpetuate health inequalities by enhancing access to healthcare mainly for those with financial means, high qualifications and few health problems, according to Seleznyova's paper "Voluntary Health Insurance as a Factor of Better Access to Healthcare for Residents of Moscow." Patients with fewer resources, lower education and income levels, and poorer health often stand no chance of joining a VHI scheme.

Generally, VHI coverage is low in Russia: just 3.4% of the country's adult population held a VHI policy in 2014, according to the HSE's Russian Longitudinal Monitoring Survey (RLMS).

In Moscow, the proportion of people with VHI coverage is higher at 12.7%, according to the Moscow and Muscovites (MIM) survey conducted in 2015 by the Institute of Humanitarian Megacity Development. Seleznyova's findings concerning VHI coverage are based mainly on data from the latter survey, which used a sample of 3,016 people representative of Moscow's adult population, including residents of Troitsky and Novomoskovsky districts, and with different sociodemographic characteristics.

Families Pay for Elderly Care

The study found that employer-sponsored VHI in Moscow covers mainly those who can pay and have low demand for medical services, rather than those who really need medical attention but cannot afford to pay for it.

Thus, the proportion of VHI policy holders among working-age Muscovites is double that of older people: 15.3% versus 6.5%. In addition to this, younger policy holders are more likely (68.8% of cases) to have their insurance premiums paid by the employer, while pensioners' VHI is often paid for by the family (42.1%).

The chances of having employer-sponsored VHI are inversely related to having health problems, i.e. the better a person's health, the higher is their likelihood to be insured at their employer’s expense. This is consistent with insurance companies' approach of issuing policies to healthier people with lower probability of an insured event. Obviously, this approach can limit access to healthcare for those who need it most.

VHI Can Perpetuate Social Stratification

The researcher further found that families with different per capita household incomes have different access to VHI: only 8% of respondents in lower income groups (first and second quintiles) hold VHI policies, in contrast to 21% in the highest income group (fifth quintile).

Ironically, people with lower per capita incomes are more likely to pay for their own health insurance. According to Seleznyova, this finding may reflect the fact that migrants without Russian citizenship and thus without access to free health insurance are forced to purchase VHI. As for wealthy locals, they are more likely to have their VHI covered by the employer.

Employee Benefits Depend on Status

The likelihood of having VHI correlated with salary: highly-paid employees are usually offered more generous benefit packages, often including VHI. This employee category has the highest proportion of VHI policy holders at 25%.

The likelihood of holding a VHI policy is also associated with employee qualifications. The greatest proportion of VHI holders can be found among senior management (26%), followed by highly-qualified employees (19%). In other categories, such as employees with medium-level qualifications, line workers, etc., fewer than 10% have VHI policies.

Highly-skilled employees are more likely to have their VHI paid for by their employer (77% of cases), while senior managers tend to pay for their own VHI policies (40%). The proportion of employer-sponsored VHI policy holders stands at 62% among medium-skilled employees and at 46% among line workers.

Who and Why Is More Likely to Have VHI

The main factor making it more likely for a Muscovite to have VHI coverage is their place of residence, i.e. administrative district within Moscow. Compared to residents of the Central District, people living in the New Moscow (Troitsky and Novomoskovsky districts), Northwestern and Eastern districts, and in Zelenograd are more likely to hold VHI policies. Education also makes a difference: highly educated Moscow residents are twice as likely to purchase VHI than Muscovites with less education.

People who rate their health as poor are twice as likely to have VHI compared to those who rate themselves as healthy.

Another important factor is per capita income: other things being equal, wealthy Muscovites are more likely to be insured.

Busy people with tight schedules often have VHI — perhaps because it gives them more flexibility, compared to free healthcare, to make time for a medical appointment.

In summary, lack of access to free healthcare, as well as poor health, may prompt a Moscow resident to buy VHI, while family income, education and employee benefits are contributing factors.

Private Employers More Likely to Sponsor VHI

The researcher constructed a regression model to examine employer-sponsored VHI. Of all employment characteristics, such as skills level, salary, type of industry, etc., salary was the main predictor of having employer-sponsored health insurance. Highly-paid employees and those employed by private companies have a higher chance of having health insurance as part of employee benefits.  

Employee education and place of residence also have been found to play a role in corporate health insurance. Other things being equal, employers are more likely to sponsor VHI of employees with higher education and those living in the Eastern Administrative District.

To assess the impact of having VHI on access to medical services, the researcher compared relevant answers given by insured and uninsured respondents. Muscovites with VHI coverage were less likely to report problems with access to care and more likely to visit a doctor when they had health problems. In income-based quintiles 2 to 5, none of the insured respondents reported failing to visit their doctor due to problems with making an appointment, while the proportion of respondents without VHI who chose to self-treat due to problems with making a medical appointment varied from 1.5% to 7.9% depending on the quintile.

In addition to this, VHI policy holders with low or middle incomes and good or satisfactory health tend to be more confident about their ability to maintain good health.

These findings suggest that the main audience for VHI schemes are well-resourced individuals with high incomes, education and net worth, and fairly good health; thus, Seleznyova concludes, VHI can contribute to health inequalities.

August 15, 2016