Oxfam's EU Advocacy office in Brussels

By Hilary Jeune, Oxfam’s EU Policy Advisor

Today Oxfam published a new report warning that health insurance schemes – being promoted by some donor agencies including the EU and governments in developing countries – are excluding the poorest and most vulnerable people.

This timely report comes as the European Union -a major donor- is debating its 2014-2020 budget, where health has been identified as a priority in the overseas aid pot. On its part, the European Commission is finalizing its action plan on health that covers national, regional and global priorities. As negotiations on both fronts continue, civil society is calling on the EU institutions to allocate 20% of the Development Co-operation Instrument (DCI) to health and education.

Most insurance schemes are a lose-lose situation. They fail to reach the poorest people and yet collecting insurance premiums costs a huge amount to administer without raising any significant amounts of cash.

This misguided preoccupation with insurance is also leaving other funding methods largely unexplored. Improving tax collection, for example, could raise up to $269 billion a year, giving developing countries the potential to double their health budgets.

Gabon, for example, raised $30 million for health with a tiny levy on the profits of companies that handle remittances and a tax on mobile phone operators.

At the same time, global action to tackle tax dodging by multinational enterprises could save developing countries an estimated $160 billion a year – more than four times the amount spent on health care by all the governments in Sub-Saharan Africa combined.

For the African countries that have introduced health insurance, low levels of enrollment are proving to be a major and recurring challenge. Ghana’s National Health Insurance Scheme has been labelled a success but excludes 64 per cent of the population and the vast majority of these are poor people. Ten years after it was introduced in Tanzania, only 17 per cent of the population has health insurance and Kenya’s National Hospital Insurance Fund covers only 18 per cent of Kenyans, despite the fact it was established nearly 50 years ago.

We’re calling on the World Bank, whose annual meetings take place in Washington later this week, to encourage governments to look for fairer ways to fund Universal Health Coverage (UHC), within the framework of President Jim Kim’s new strategy to end extreme poverty and boost shared prosperity.

Achieving universal and equitable health care for all will continue to require significant development assistance from donors, at least in the short to medium term. European governments must deliver on their commitment to provide 0.7% of national income as overseas aid in order to reach the Millennium Development Goals by 2015, including increasing aid for health. Aid must be delivered in a way that supports democratic country ownership, empowering developing country governments and their citizens, Providing aid directly to developing country governments -the so called budget support-, rather than specific projects, offers one of the best chances for poor countries to tackle poverty and escape aid dependency.

In short, countries should focus on finding home-grown health financing solutions that are universal and equitable. At the same time donors need to stop pushing unproven insurance schemes which in many cases are actually reinforcing inequality.

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