Cedric Stephens | Managing individual and collective health risks

Portmore, St Catherine’s Karen Henry inspired me to write today’s article. Her letter to the editor was published in this newspaper on March 19. She wrote about the near impossibility of obtaining health insurance for self-employed and unemployed persons and those who work in the informal economy. She also argued that insurers’ practice of imposing policy provisions that exclude coverage for pre-existing illnesses is unfair. The Government, she said, had a key role to play in remedying these problems. All citizens should have access to health insurance.

Her arguments cannot be faulted. However, she omitted two points. COVID-19 and its impacts at the personal, community, and societal levels should make us more aware of the health risks that we face as individuals and collectively. Professional and other interventions based on science can help to manage those risks. Access to health insurance plus the availability of information that is focused on the prevention of health conditions can play an important part in the mitigation strategy. These services invariably involve significant and unexpected costs.

A recent report in this newspaper said that a feasibility study on unemployment insurance (UI) was being undertaken by the Planning Institute of Jamaica and that it had reached a ‘far advanced stage’. Senator Kavan Gayle, a supporter of UI, stated in his contribution to the State of the Nation debate in Parliament in January that many persons had been laid off during the pandemic because of the financial downturn. Some had to “deplete their savings and (sell) assets to survive. We need a system that acts as an automatic stabiliser by supporting spending power during periods of personal challenge or national economic downturn,” Mr Gayle said.

A CHOICE

Senator Gayle’s argument can also be applied to the points that Ms Henry raised. Only about 20 per cent of the population has access to health insurance. The Statistical Institute of Jamaica (STATIN) reported that the country’s labour force was 1.35 million persons six years ago. Jamaica’s population was 2.97 million at the end of 2021. Wouldn’t the introduction of universal health insurance (UHI) have a more beneficial impact on society than unemployment insurance if there was a choice between the two? What were the factors that led to the choice of UI instead of UHI?

United Nations (UN) Secretary General António Guterres’ October 2020 policy brief, COVID-19 and Universal Health Coverage, according to a November 2020 article written by Health & Wellness Minister Dr Christopher Tufton, “urged all countries to speed up and scale up investment in universal health coverage and stronger health systems, starting immediately”.

Jamaica, the minister wrote, “has made steps towards realising the goals of universal health coverage and recognises universal healthcare’s significance, particularly about ensuring that all Jamaicans have access to quality healthcare, and since mid-2016, has taken concrete steps towards realising that goal”.

He added: “A healthy population leads to a strong economy. Thus, a robust healthcare system, underpinned by access, equity, quality, and affordability, is essential to a country’s prosperity. Most countries with weak public-health systems share similar developmental challenges, whereas some of the most advanced and stable economies have universal health coverage. There are, however, challenges that small island developing states such as Jamaica face in financing and meeting the demands of universal health coverage.”

He identified the challenges as “resource constraints and competing budgetary priorities”.

Minister Tufton continued: “Wealthier and more economically stable countries can afford to deliver universal health coverage, whereas countries like Jamaica struggle for several reasons: limited financial, human, and technical resources, and capacity. This lack of capacity manifests itself in an inability to subsidise healthcare and to establish and properly maintain institutions to manage a national health-insurance scheme.”

Also, because 50 per cent of the economy is informal, it means that measures, such as imposing compulsory premiums on taxpayers to fund a national healthcare insurance system, are impractical and hardly feasible, he said.

Dr Tufton’s arguments appeared reasonable at the time. But after I heard about the UI study and learned about the level of support it had received, I wondered if UI would not eventually face the same resource constraints as universal health insurance. Why should UI be a budgetary priority while UHI is not?

Over the last two years, and before that, the Ministry of Health and Wellness (MOHW) should have collected a significant amount of data about the island’s health system. The studies that it conducted to examine the feasibility of UHI should have produced many terabytes of data. It is not possible, given the resource and other constraints that the Government is facing, to introduce UHI at this time. However, can’t the information that the ministry and its agencies collected be used for another purpose instead of allowing it to go to waste? Could MOHW, working in association with the insurance regulator, use some of that information as a tool to reform how health is conducted?

Free-market purists will argue that the health insurance segment of the life insurance industry should be allowed to find solutions to the problems that Ms Henry identified, free from government interference? My response: what role should the Government and its agencies play when there is evidence of market failure?

Cedric E. Stephens provides independent information and advice on the management of risks and insurance. If you need free information or counsel to help you solve a problem, write to The Business Editor business@gleanerjm.com or contact Mr Stephens directly at aegis@flowja.com. Letters and e-mails will be edited for clarity and length.