The Impact on Employer Operating Costs of Low-Cost Health Insurance Including an HIV/Treatment Benefit

Project Description

Namibia, like South Africa, has an active health insurance industry that provides risk pooling for the expenses of private medical care. In 2006–2007, a number of large Namibian employers agreed to subsidize such policies for their uninsured workers. Employers make a contribution to the premium as part of the employment package. Employees then contribute the remainder of the premium from their pay. Because of the relatively large premium contribution required from the employees, few lower-wage workers have elected to participate. Instead, they pay out of pocket for private care or seek care in the public sector.

The goal of this study was to identify and quantify the costs and potential impacts to the employer associated with providing complete health insurance coverage, including antiretroviral therapy, to workers not previously covered by health insurance. By lowering economic barriers to treatment, health insurance for workers should have benefits for the employer, such as reducing the costs associated with absenteeism and employee attrition related to disease and death.

Findings indicate that antiretroviral treatment (ART) appears to be reducing workforce attrition and attrition-related costs for Namibian employers. However, we cannot say this is a result of new low-cost insurance policies. The observed downward trend in attrition appears to precede the purchase of the low-cost insurance plans, and may be the result of an effective roll-out of ART in public facilities traditionally used for major medical care by uninsured employees.

One unequivocal conclusion of this study is that Namibian employers are losing fewer workers than they did a few years ago, and the benefit is even greater if compared to the likely increase in AIDS-related attrition that would have occurred over this period. Whether the benefit is coming from low-cost health insurance or public treatment, we cannot say. But employers are seeing savings which may motivate them to share in the costs of ART through purchase of low-cost insurance or some mechanism for sharing the public treatment costs now being incurred by the government and donors.

Project Details

Principal Investigator Rich Feeley
  • Amsterdam Institute of International Development
  • PharmAccess Namibia
Country(ies) Namibia
Dates of Research 2006–2009