Divergent Trajectories: Healthcare Insurance Reforms in East Asia ...

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Illan Nam, Colgate University, Feb 2011Draft in progress, please do not quote or citeattachments among voters. Conversely, in countries where party systems are moreinstitutionalized, have nationalized presence, and stronger partisan attachments, partieshave weaker incentives to propose universalizing social policy initiatives; such policiesentail higher fiscal costs, are likely to meet resistance from stakeholders whose interestthey threaten, and, in a more stable electoral environment, the political payoffs – theextent to which parties can attract more voters – may not be fruitful enough to justify itscosts. Under these circumstances, social policies that selectively target groups of citizensmay be more cost-effective strategies for solidifying or carving out incremental gainsamong a voter base.Secondly, I argue that policy initiatives that enhanced solidarity or redistributionbetween lower- and higher-income workers depended upon the willingness of higherincomeworkers to pool their income and health risks with less-privileged citizens. Ingeneral, in these developing democracies, formal sector workers (a category that,generally speaking, encompasses highly-skilled manual and white-collar groups)benefited from higher-quality healthcare insurance and services, while informal sectorworkers had poorer terms of insurance and access to healthcare. Whether moresolidaristic reform efforts succeeded depended upon whether privileged workers werewilling shoulder the costs of greater risk pooling. I argue that this willingnessimportantly was influenced, in part, by growing labor market insecurity during the 1990s,to which the more privileged workers also grew susceptible, but even more so by howlevels of inequality in a society mediated formal sector workers’ perceptions of sharedinterests in solidaristic social protection. Levels of equality shaped the perceptions of6

Illan Nam, Colgate University, Feb 2011Draft in progress, please do not quote or citedistance that privileged workers felt between themselves and their less privilegedbrethren and influenced their willingness to mobilize for more equitable reforms.CASE SELECTION: SOUTH KOREA, THAILAND, AND CHILEThis project seeks to theorize about welfare reform outcomes, specificallyfocusing upon healthcare insurance reform, in a universe of middle-income developingdemocracies in East Asia and Latin America that includes South Korea, Taiwan,Thailand, the Philippines, Indonesia, Venezuela, Argentina, Brazil, Chile, and Uruguay.During the past twenty years, many of these countries initiated healthcare insurancereforms, along with efforts in other social policy areas such as pensions, education, andsocial assistance programs. For many of these countries, the proposed health insurancereforms represented bold and ambitious efforts to change systems inherited from priorauthoritarian periods and attempted varying degrees to introduce mechanisms of greatersolidarity and redistribution to their existing systems.From among this group, I examine in closer detail the trajectories and outcomesof health insurance reform in three countries, South Korea, Thailand, and Chile. In allthree,the proposed reforms attempted to introduce meaningful changes to both axes –universality and solidarity – although their success varied considerably. Korea achievedsignificant gains towards both universality and solidarity. Thailand substantiallyexpanded coverage for a quarter of its population with a new national program, althoughit failed to merge this program with already existing programs that covered formal sectorworkers. Finally, Chile passed legislation that improved access to those who weremarginalized in the existing system; however, efforts to implement greater redistributionbetween lower-income and higher-income segments did not succeed.7

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