Voluntary health insurance in Nigeria: Effects on takers and non-takers.

Interventions aiming to simultaneously improve financial protection and quality of care may provide an important avenue towards universal health coverage. We estimate the effects of the introduction of the Kwara State Health Insurance program in Nigeria on not only the insured but also the uninsured. A subsidized voluntary low cost health insurance was offered by a private insurer as well as a quality upgrade in selected health care facilities. Using propensity score matching and panel data collected in 2009 and 2011 (n = 3509), we find that, for the insured, the program increased health care utilization (36 percent, p < 0.000) and reduced out of pocket expenditure (63 percent, p < 0.000). However, the uninsured in the area with upgraded facilities did not increase their care utilization and even spent less on health care, which is problematic given that 67 percent of the population in the treatment area did not take up the insurance. Our findings suggest that while voluntary health insurance combined with investments in health care supply can increase health care use and financial protection among those that take up the insurance, attention should be paid to potential unintended effects on the - typically sizeable- group of people who do not enroll in the insurance.