Financing Rural Insurance Coverage
103
Box 5.2
The Benefit Package in Mexico’s Popular Health Insurance Program Mexico recently confronted the benefit package design issue in its Popular Health Insurance program (OECD 2005b). The program was part of a broader reform that supported increased spending on public health and community health services. Within Popular Health Insurance, the Mexicans decided to focus the bulk of the budget (around 90 percent) on frequent high-probability treatments associated with relatively low financial risk, and the rest on infrequent low-probability events associated with potentially catastrophic financial consequences. Included in the noncatastrophic component of the insurance package are 165 drugs and 91 medical interventions judged to be essential and cost-effective, which together account for 85 percent of medical services delivered in Mexico. These are provided free of charge at the point of use. Six high-cost-treatment diseases currently are included in the catastrophic component, though the government is committed to further expansion as resources become available and after cost-effectiveness and social acceptance criteria have been met.
free of charge and financed out of general revenues. Some cost-effective interventions are more cost-effective than others; those that are less cost-effective should attract a higher coinsurance rate. Some potentially catastrophic interventions are more catastrophic than others; arguably, only those that have the most catastrophic consequences ought to be totally free or nearly so, while those that are less catastrophic should require some copayment. Keeping this differentiation relatively simple makes sense—the current system of copayments is extremely complex and not well understood by NRCMS members. It might be possible to move to just two tiers within each of categories (3) and (4), with a higher rate for noncatastrophic interventions. Given the earlier discussion, it might make sense to choose the various coinsurance rates and the dividing lines between the low and high tiers such that the bulk of NRCMS outlays go to catastrophic care. A key goal should be to keep copayments low. In Japan, Korea, and Taiwan, China, coinsurance rates for hospital care are between 10 percent and 20 percent. Since the effective coinsurance rate on inpatient care (taking into account deductibles and ceilings) is currently around 70 percent in China, moving to those much lower rates would be a major