T. Barnighausen, R. Sauerborn Social Science Medicine 54(2002)1559-1587 1565 10% are nearly completely covered under private or the population remain uncovered(Ensor, 1997). South other health insurance. Today, less than 0.5% of all America has enjoyed a long tradition of social insurance. 1999a,b)Fig.. than 80% in Costa Rica, although the proportion of the The extension of population coverage in an insurance population covered in most countries is rising. The ystem can be classified based on three principles: the population group least likely to be covered is the regional, the personal, and the place of work principle growing number of urban informal sector workers (Zollner, 1963). According to the regional principle, an Donaldson gerard, 1993). In Africa, a number of insurance scheme is first established in some regions of a countries have established social health insurance country (usually the most industrialised ones),an schemes, such as Cameroon, Ghana and Kenya. Again, gradually extended to cover other (usually less devel- coverage is mostly confined to the formal workforce oped) regions. An extension of coverage according to (Bennet Ngalande-Banda, 1994) the personal principle can be either oriented at horizontal In Chinese cities, up to the market reforms in the criteria such cupation or vertical criteria such as 980s. SHI schemes covered more than 90% of the income. Similarly, extension according to the place of urban population, although only 50% of health care work principle ca along horizontal lines (e.g. costs incurred by spouses and children of the insured economic sector) or vertical lines(e.g. size of company) were covered. Today, the number of urban residents Before the introduction of the workers' health covered has dwindled to less than 50%, as more and insurance, access to insurance had depended either on more state enterprises declare insolvency and people the region of residence or on the place of work increasingly find work in private enterprises or in the Correspondingly, coverage was extended according to informal urban sector(Center for statistical information the regional or the place of work principle. By contrast, of the Chinese ministry of health, 1999: World Bank, once the principle of supraregional compulsory insur- 1997; Hsiao,1995).The or stumbling block to nce was introduced for different occupational groups in universal coverage in these cities is the growing number 1883, coverage was extended according to the personal of informal sector employees and migrants from the principle Along horizontal lines coverage was expanded countryside(both legal and illegal). The central Chinese incrementally to cover more and more occupational government currently attempts to promote a stepwise groups and-in three major shifts of expansion -to expansion of coverage in all cities from state to non-state cover the unemployed, all primary dependents and enterprises to the self-employed and-eventually and retirees(see Table 1)(Wasserrab, 1889: Lang, 1925: perhaps with the help of subsidies-to the urban poor Peters, 1978: Alber, 1989; Manow, 1999). Vertically, (Hu, 1999; Zhu, Zhou, Zhang, Ma, Gao, 1999: Bloom, coverage was expanded by increasing the income ceiling 1998). In accordance with a national policy recommen above which health insurance is no longer compulsory dation, some city governments consider offering volun- as was done, for example, in 1918 when the monthly tary enrolment in the city-wide funds to anybody not yet income limit was doubled from RM 2500 to RM 5000. under mandatory cover, if they are able to contribute as or people who fell under the law of compulsory much to the fund as do workers earning 60% of the citys urance. but who did not have access to a sickness average annual salary (see, for instance, Social health fund through their work and could not insure in a town- insurance administration office of Shenzhen city, 1999: based fund, every municipality had to provide insurance Labour office of Yichang city, 1998) through a municipal sickness fund. The German case suggests that compulsory coverage This second phase in the development of the German an be extended incrementally to achieve universality. health insurance system suggests the following lesson This 'lesson. however, cannot be drawn without some neral qualifications and without If compulsory insurance already exists for some the specific methods used in Germany can and should be people, extending it incrementally to other regions transferred to other countries and times. From an and social groups will--if a number of conditions are ethical point of view, it has to be kept in mind that the met-be a feasible way to achieve universal cover German government in adopting an incremental ap- proach towards universality was motivated by argu- ments of power rather than social justice(Rimlinger, Expanding compulsory insurance Nam. a c is a task 1971: Observatory, 2000b). If one accepts a utilitarian many LMICs face today. In Viet Na ethic that preservation of power may be a legitimate goal SHI scheme was introduced in 1993 covers civ of social policy as long as the ultimate outcome serves servants and workers in larger enterprises, but-in spite social justice, it has to be kept in mind that an of attempts to expand cover to family members, farmers, incremental approach to establishing SHI may, in fact and urban informal sector workers-more than 90% of lead to more inequity10% are nearly completely covered under private or other health insurance. Today, less than 0.5% of all people living in Germany do not have health insurance (Tennstedt, 1977; Peters, 1978; Neubauer, 1988; BMG, 1999a, b) Fig. 1. The extension of population coverage in an insurance system can be classified based on three principles: the regional, the personal, and the place of work principle (Zollner, 1963). According to the . regional principle, an insurance scheme is first established in some regions of a country (usually the most industrialised ones), and then gradually extended to cover other (usually less devel￾oped) regions. An extension of coverage according to the personal principle can be either oriented at horizontal criteria such as occupation or vertical criteria such as income. Similarly, extension according to the place of work principle can be along horizontal lines (e.g. economic sector) or vertical lines (e.g. size of company). Before the introduction of the workers’ health insurance, access to insurance had depended either on the region of residence or on the place of work. Correspondingly, coverage was extended according to the regional or the place of work principle. By contrast, once the principle of supraregional compulsory insur￾ance was introduced for different occupational groups in 1883, coverage was extended according to the personal principle. Along horizontal lines coverage was expanded incrementally to cover more and more occupational groups andFin three major shifts of expansionFto cover the unemployed, all primary dependents and retirees (see Table 1) (Wasserrab, 1889; Lang, 1925; Peters, 1978; Alber, 1989; Manow, 1999). Vertically, coverage was expanded by increasing the income ceiling above which health insurance is no longer compulsory, as was done, for example, in 1918 when the monthly income limit was doubled from RM 2500 to RM 5000. For people who fell under the law of compulsory insurance, but who did not have access to a sickness fund through their work and could not insure in a town￾based fund, every municipality had to provide insurance through a municipal sickness fund. This second phase in the development of the German health insurance system suggests the following lesson: If compulsory insurance already exists for some people, extending it incrementally to other regions and social groups willFif a number of conditions are metFbe a feasible way to achieve universal cover￾age. Expanding compulsory insurance coverage is a task many LMICs face today. In Viet Nam, a compulsory SHI scheme was introduced in 1993, which covers civil servants and workers in larger enterprises, butFin spite of attempts to expand cover to family members, farmers, and urban informal sector workersFmore than 90% of the population remain uncovered (Ensor, 1997). South America has enjoyed a long tradition of social insurance. But population coverage is highly variable. It ranges from less than 10% in the Dominican Republic to more than 80% in Costa Rica, although the proportion of the population covered in most countries is rising. The population group least likely to be covered is the growing number of urban informal sector workers (Donaldson & Gerard, 1993). In Africa, a number of countries have established social health insurance schemes, such as Cameroon, Ghana and Kenya. Again, coverage is mostly confined to the formal workforce (Bennet & Ngalande-Banda, 1994). In Chinese cities, up to the market reforms in the 1980s, SHI schemes covered more than 90% of the urban population, although only 50% of health care costs incurred by spouses and children of the insured were covered. Today, the number of urban residents covered has dwindled to less than 50%, as more and more state enterprises declare insolvency and people increasingly find work in private enterprises or in the informal urban sector (Center for statistical information of the Chinese ministry of health, 1999; World Bank, 1997; Hsiao, 1995). The major stumbling block to universal coverage in these cities is the growing number of informal sector employees and migrants from the countryside (both legal and illegal). The central Chinese government currently attempts to promote a stepwise expansion of coverage in all cities from state to non-state enterprises to the self-employed andFeventually and perhaps with the help of subsidiesFto the urban poor (Hu, 1999; Zhu, Zhou, Zhang, Ma, & Gao, 1999; Bloom, 1998). In accordance with a national policy recommen￾dation, some city governments consider offering volun￾tary enrolment in the city-wide funds to anybody not yet under mandatory cover, if they are able to contribute as much to the fund as do workers earning 60% of the city’s average annual salary (see, for instance, Social health insurance administration office of Shenzhen city, 1999; Labour office of Yichang city, 1998). The German case suggests that compulsory coverage can be extended incrementally to achieve universality. This ‘lesson’, however, cannot be drawn without some general qualifications and without considering, whether the specific methods used in Germany can and should be transferred to other countries and times. From an ethical point of view, it has to be kept in mind that the German government in adopting an incremental ap￾proach towards universality was motivated by argu￾ments of power rather than social justice (Rimlinger, 1971; Observatory, 2000b). If one accepts a utilitarian ethic that preservation of power may be a legitimate goal of social policy as long as the ultimate outcome serves social justice, it has to be kept in mind that an incremental approach to establishing SHI may, in fact, lead to more inequity. T. Barni . ghausen, R. Sauerborn / Social Science & Medicine 54(2002) 1559–1587 1565