Every year, millions of people suffer from financial catastrophe due to out-of-pocket healthcare payments and most of them are pushed into poverty. This study investigates the impacts of community-based health insurance schemes on health-related financial shocks and poverty, using a nationally representative household survey data from Rwanda.

We address issues of selection bias in health insurance enrollment, heterogeneity in treatment effects and non-normality in the outcome variables using Extended Two-Part Model within a Bayesian estimation framework. We find that community-based health insurance schemes reduce the incidence of catastrophic healthcare spending by about 20 percentage points.

We also finding that community-based health insurance schemes reduce the headcount poverty rates and the poverty gap due to out-of-pocket healthcare payments by about 8 percentage points and by about 3 USD in 2000 prices, respectively. The estimated treatment effects are however heterogeneous across households.

Report by AfDB