Cheap Insurance Brings Big Benefits

Cheap Insurance Brings Big Benefits

Most Rwandans now have access to basic health insurance. Photo: <a href="">Paul Evans (Flickr)</a>
Most Rwandans now have access to basic health insurance. Photo: Paul Evans (Flickr)

Rwandan Sunny Ntayomba marveled when he met a U.S. student and learned that many Americans lack heath insurance. Rwanda, one of the world’s poorest countries, insures 92 percent of its population thanks to a new government program described by the New York Times.

Health insurance has bettered Rwandans’ prospects for economic development by providing a safety net against unexpected medical bills. This fallback is a small but important guarantee while Rwanda's poor climb up the economic ladder out of poverty.

This guarantee is more important than you might imagine, according to several World Bank surveys, which indicate that improving health could be a key catalyst for reducing poverty. In one study, Dying for Change, interviewees identified illness as the most common cause of poverty — even more important than losing their job. In another, interviewees reported that poor health and an inability to access medical care perpetuated their poverty.

The program makes insurance available for a mere $2 a year, reports the New York Times. While this price is still steep for the truly indigent, for most it’s a steal. The annual premium is less than it would cost to seek treatment for diarrhea, pneumonia, malaria, malnutrition, or an infected cut.

The insurance plan covers these ailments but little else because the government has purposefully prioritized affordability. This strategy has worked well. Life expectancy has risen from 48 to 52 despite the country’s ongoing AIDS epidemic writes the Times. If only rich Rwandans could afford to join, it's likely this leap wouldn't have been possible.

This pioneering program is impressive as it serves the poor while improving their prospects of shaking off poverty. But the program’s success is far from certain as it relies on a sustained government commitment and inflows of foreign aid.

Still, in spite of the program's shaky prospects, this African nation deserves a nod for an accomplishment that has eluded much richer states.

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