Effect of the National Health Insurance Scheme on Healthcare Utilization and Out-of-Pocket Payment: Evidence from GLSS 7

The Ghana National Health Insurance Scheme (NHIS) was established in 2003, Act, 2003 (Act 650), but was later replaced with the National Health Insurance Act, 2012 (Act 852) to get rid of the then "cash and carry" system of paying for healthcare. The aim of the scheme was to reduce the cost of healthcare provision and increase access to healthcare. This paper investigates the effect of the National Health Insurance Scheme (NHIS) on healthcare utilization and out-of-pocket payment, from the providers' perspective. The study uses data from the seventh round of the Ghana Living Standards Survey (GLSS 7) conducted in 2016/2017 and employs the estimation method of Propensity Score Matching (PSM). The findings are that enrollment onto Ghana's National Health Insurance Scheme (NHIS) increases healthcare utilization by 26% and decreases out-of-pocket payment by 4%. However, about 48% of the population are still not enrolled, citing various reasons. Even those who enrolled, about 30% had dropped out for several reasons. The study identifies age, income, education, sex, and location of residence as the main determinants of enrolling onto the NHIS. I show that the National Health Insurance Scheme increases healthcare utilization and reduces out-of-pocket payment in Ghana. A number of Ghanaians have either not registered or registered but have stopped enrolling citing no money, no need for NHIS, and no confidence in the system' as reasons. Any policy to invigorate the public confidence in NHIS and increases enrollment should be targeted at the young, poor, less educated, males, and rural dwellers.