The challenges of pursuing private health insurance in low- and middle-income countries: lessons from South Africa

South Africa’s apartheid history of legislated discrimination on the basis of race has left a legacy of massive income inequalities – with, at 0.63 in 2011, one of the highest Gini coefficients in the world (World Bank, 2017) – and inequalities in access to social services. It has also left an indelible imprint on the health sector, where private health insurance was developed to serve white workers, whereas the public health sector served the majority black population and lower-income whites.1 Since the first democratic elections in 1994, there has been considerable commitment to addressing these inequalities. However, progress has been limited: income inequalities have in fact been growing and inequalities within the health sector are increasingly related to class rather than race. The development of private health insurance, and policy related to it, has been heavily influenced by the social and political context. Medical schemes (the name given to private health insurance organizations in South Africa) were introduced at the turn of the 20th century, under British rule, for white mineworkers, and restricted to white South Africans until the 1970s. The number of schemes grew rapidly from the 1940s, alongside the growth of private providers. The apartheid government actively promoted privatization of health care financing and provision during the 1980s, deregulating medical schemes in 1988. Following transition to a democratic government in 1994, there were concerted efforts to re-regulate medical schemes, but in spite of