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Healthcare Costs Push Almost 100 Million People Into Extreme Poverty Every Year

By Max Lawson for Oxfam India

When I first arrived in Kenya, it was some time before I could get a car. Instead, I was moving around by taxi. I met my driver Micah on the first day, and he helped me hugely, taking my kids to school, and helping me navigate Nairobi, where Oxfam International recently shifted its base too. He has become a family friend now, and his kids, June and Phillip often come at my place to play with my boys.

As a taxi driver, Micah earns about $30 a day at most, so after working six days a week, the maximum amount he takes home is around $720 a month. This means he is far from the poorest of the poor. He lives with his family in a working-class area, but not in one of the slums in the city. He also owns some land outside Nairobi in the Rift valley, where he has some cattle and grows some crops to support his income.

Three weeks ago, his 104-year-old grandmother was attacked by thieves in her home in the far west of Kenya. She ended up in intensive care for three weeks. Sadly, she died. The family was then landed with a bill of 5.4 million Kenyan Shillings, or 54,000 dollars. This is the equivalent of six years of Micah’s earnings. The hospital refused to release the body until they were paid, while charging him for every day when the body was being held in the morgue.

To pay this bill he has leased his land to someone else for six years. He has also taken out a loan on his car, as well as borrowed money from family and friends to be able to release the body for burial. Sadly, these stories are all too familiar in Kenya and other developing countries. Often in our reports, I have quoted the figure that every year 100 million people are forced into extreme poverty by the catastrophic impact of health costs. There are 100 million stories like Micah’s every year.

This week I was in Indonesia for the World Bank and IMF meetings. On Wednesday night, I was chatting to a taxi driver there. His name was Eddie. He has two boys of similar age as Micah’s children, a wife and an elderly mother living at home. I asked him what he felt about President Joko Widodo, who is up for re-election next year. He said he thought Widodo was brilliant.

I asked why, and the first thing he said was that the President has introduced universal healthcare. He only has to pay a small amount each month to have his whole family covered. His wife recently had some problems with her back, which required surgery and an MRI, costing around 60 million rupees, or approximately $5,000, which she got from a public hospital. He did not have to pay a thing. He described how good it felt to no longer have to worry about the cost of getting sick.

The original architects of the welfare state in the UK and the United States spoke about ‘freedom from fear’. Universal health coverage is not just about the money saved by the poor; it is also about freedom from fear. Freedom from worrying about how you will afford to look after your children if they fall sick. Freedom from going bankrupt without any notice. Eddie is better off financially, and he and his wife no longer have to worry. His life is more secure now, and he is happier as a result.

Politicians in rich countries in the 20th century and politicians like President Joko Widodo understand that this is a profoundly progressive and popular thing to do for your people. The Indonesian health service still faces major challenges, but the commitment of the government to securing good health for everyone is clear. Steps like this mean a lot to ordinary people.

Oxfam’s Commitment to Reducing Inequality index (CRI) 2018 released this week. It got quite a bit of media coverage in different countries, and we ended up in quite a debate with the Government of Singapore in particular which was fun. They came in the bottom ten, partly because of their actions as the notorious tax haven, and partly because they are one of few countries without a comprehensive minimum wage. They were not happy.

It is possible for governments to do the right thing and provide health care for all their citizens. I hope the Government of Kenya realises this. Until then, fear of sickness will be the everyday experience of hundreds of thousands of Kenyan families.

 Mickey Mouse Tax Cuts

With the mid-terms approaching in the United States, the campaigning is hotting up. One group that I have been following for a while who I really think are brilliant are called the Patriotic Millionaires. They are a group of rich Americans who came together in 2010 to oppose tax cuts on the rich.

Proud “traitors to their class,” members of the Patriotic Millionaires are high-net-worth Americans, business leaders, and investors who are united in their concern about the destabilising concentration of wealth and power in America. The mission of the Patriotic Millionaires organisation is to build a more stable, prosperous, and inclusive nation by promoting public policies based on the ‘first principles’ of equal political representation, a guaranteed living wage for all working citizens, and a fair tax system:

They have filmed this short video of an heiress to the Disney fortune speaking about her opposition to tax cuts. It is brilliant. She also gives away some important Disney secrets too.

Max Lawson is the Head of Inequality Policy, Oxfam International and is based out of Nairobi, Kenya. He can be reached via Twitter @maxlawsontin 

This story was originally published by Oxfam India.

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