Incentives for increasing rural enrollment in social health insurance schemes: a field experiment.

Health insurance is becoming more important as low- and middle-income countries transition from a focus on infectious diseases to chronic ones. Colombia¿s state-run health insurance system, established in 1993, promoted managed competition as a way to reduce costs and increase benefit levels (Giedion & Uribe 2009). The reforms established a social health insurance scheme with two major tiers: a contributory system and a subsidized program for the low-income. In the contributory system, an individual contributes based on his/her income level. Employees and employers pay contributions to a central fund based on a fixed portion of income. In the subsidized system, the government pays for each individual and eligibility is defined according to assets. However, seventeen years later, universal coverage has not been achieved and the number of uninsured continues to fluctuate between 5% and 8% (Garavito, 2009). We have done extensive research on the demand and supply side of both programs in Colombia (Trujillo et al. 2005, Trujillo and McCalla 2004, Trujillo 2003). There is some evidence that health subsidies generate net income transfers with price and substitution effects (Ruiz et al 2010, forthcoming). Insurance lowers prices, which increases health access, but this could be inefficient if limited health resources are used for excess consumption (Nyman, 2003).}