Analysis of Private Health Insurance in Sri Lanka: Findings and Policy Implications

Research team

Ravi P. Rannan-Eliya


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Private health insurance (also known as voluntary health insurance) has been available in Sri Lanka for three decades. While it has not been of major importance as a financing mechanism in the health sector, the recent development of the insurance sector generally and the expansion of private health services have led to an increased level of interest by policy-makers in private insurance. The 1992 Presidential Task Force on Formulation of a National Health Policy for Sri Lanka (1993) proposed the vigorous promotion of private health insurance as a means both of increasing resource mobilization for the health sector, and reducing the burden on the government’s limited health care resources. Subsequently both the government and donors, the latest of which was the Asian Development Bank, have commissioned reports on the potential role of health insurance in Sri Lanka. Much of this analysis has not been based on actual empirical research.

This paper presents some recent empirical analysis of private health insurance schemes in Sri Lanka. It places the findings of this analysis in the context of what is known from the operation of health insurance markets in other countries, and what would be expected from economic theory. It finally discusses the implications of the findings for both public policy, as well as the insurance companies themselves.

Table of Contents:


Development of Insurance in Sri Lanka

As assessment of PHI in Sri Lanka