Africa Leapfrogged the Bank. Now It Can Leapfrog the Insurer

Over winter break, while catching up with my cousins, we discovered something curious. Over the past few months, one of our uncles had contacted each of us separately, asking for $30 to help his cow, which was supposedly struggling through a complicated birth and needed a vet. The requests were spaced just far enough apart to avoid suspicion. By our count, the cow had delivered five times in three months. If true, my uncle had quietly solved world hunger. We laughed. But beneath the humor was something familiar. This was not the first urgent request, and it would not be the last time we sent the money anyway. Many Africans in the diaspora know this script well: a health emergency, a small but immediate cash need, and the implicit understanding that family shows up. Remittances are not trivial flows. They total over $100 billion annually across Africa and, in many countries, exceed foreign direct investment. In effect, they function as an informal insurance system, filling gaps left by weak formal health financing. But once the money arrives, it enters a household with competing priorities. Hospital bill or school fees? Painkillers now or savings for the next emergency? In environments where formal insurance is scarce and liquidity is fragile, every dollar carries multiple obligations. The trust that holds this system together is real. But it is also fragile, and it is no substitute for a product that actually works. So what happens when it comes to our health; the most important thing we all have? How do families protect themselves against the shocks and emergencies of health? 

Why Insurance Has Failed Africa

Imagine being offered a product that asks you to hand over money every month, money you may not have, for a promise that will only pay out if disaster strikes, only if you can navigate the paperwork, and only if the clinic approves that they actually have your file on record. Now imagine that product being sold to someone who earns $8 a day, in cash, in a small business in Nairobi. This is the story of health insurance in Africa. It is a story of spectacular, predictable failure, and one that even its architects are beginning to admit.

The numbers confirm what any market vendor already knows. Health insurance penetration across Africa is among the lowest in the world. Analysis of over 35 countries on the continent showed an average of just 7.9% coverage across the continent. In large and small countries alike, for example Nigeria and Zambia, the rate is below 2% in informal sectors. Even in Kenya, routinely celebrated as East Africa's most sophisticated health market, only about 18% of the informal market is actually enrolled. These are not statistics about poverty. They are statistics about product-market fit, or rather, the complete absence of it.

The structural reasons are not mysterious. First, more than 80 to 90% of workers across many African economies are employed informally, without fixed salaries or predictable monthly income. Asking this population to commit to recurring premiums is not a policy failure. It is a design failure. You cannot sell a fixed-cost product into a variable-income economy and then blame the buyer when adoption stalls. Second, health insurance has a trust problem that goes beyond affordability. When premiums are paid consistently but claims are delayed, disputed, or simply denied, the product stops feeling like a safety net and starts feeling like a gamble the house always wins. In much of Africa, that perception is not paranoia. It is accumulated experience. Third, African governments have consistently underinvested in the foundation on which any insurance system must stand: In 2019, health spending averaged just 5.3% of GDP across the continent, well below a global average of 10%.

The human cost of this failure is not abstract. In 2019, over 95 million Africans experienced what economists coldly call catastrophic health spending, meaning a medical bill that consumed more than 10% of household income in a single blow. For 152 million people, a health crisis meant crossing the line into poverty: selling a motorbike, withdrawing a child from school, borrowing at punishing rates from a neighbor, or simply not going to the clinic at all and hoping the fever breaks on its own. Fifty years of trying to transplant a western insurance model into this reality has produced these numbers. Perhaps it is time to try a different product altogether.

The Airtime Moment

Here is what Africa did not do with telecommunications. It did not wait for everyone to open a bank account and set up a monthly direct debit before buying a phone. It sold prepaid airtime, scratch cards, top-ups, pay-as-you-go bundles, and watched mobile penetration explode across a continent that had never had the landline infrastructure, the conventional model supposedly required. By 2024, mobile money platforms like M-Pesa were processing over $314 billion annually across seven African markets alone. The leapfrog was not accidental. It was the result of matching a product's payment structure to how people actually earn and spend money.

What if we applied the same logic to healthcare? A prepaid health pass system would allow individuals, businesses, and diaspora families to purchase credits covering specific bundles of primary and non-surgical care: a clinic visit with basic labs, a maternity and child care package, monthly chronic disease check-ups for a diabetic parent. No monthly premium. No insurer who vanishes when you actually need them. Just a tangible credit, bought when you have cash and redeemed when you need care, as familiar and immediate as buying airtime on a Monday morning.

The concept is already taking shape in pockets across the continent. Microinsurance and community health platforms are experimenting with low-cost, condition-specific coverage, products targeting malaria, maternal care, and chronic disease management at price points that match the daily realities of informal workers. These models work precisely because they are not selling probability. They are selling access. That distinction, between paying for an unlikely payout and paying for guaranteed care, is the entire argument.

Two Reasons This Can Scale

The pass model has structural advantages that traditional insurance has never managed to replicate. The most personally familiar to many Africans in the diaspora is what might be called the leakage problem.

Africa receives over $100 billion annually in remittances, more than it receives in foreign aid or foreign direct investment. But when money is sent as cash, it enters a household economy with many competing claims: hospital bills, school fees, groceries, and yes, occasionally, the local drinking den. Even when the original request is entirely genuine, the cash rarely arrives ringfenced for the purpose it was sent. The sender has no visibility. The recipient has no accountability. And the healthcare need, which was real, goes unmet or underfunded.

A health pass changes this dynamic entirely. Instead of wiring cash and hoping loved ones make it to the clinic, a relative in London or Houston purchases a specific healthcare credit, one that can only be redeemed at an accredited clinic for an agreed bundle of care. The money does not pass through a household budget. It goes directly to a healthcare interaction. For the diaspora, this is not a new financial instrument. It is a solution to a problem they have been living with for decades.

There is a second advantage that is perhaps the most underappreciated: prepayment may actually address the supply side of the healthcare market, not just the demand side. Many African private clinics operate on razor-thin working capital because out-of-pocket payments are volatile and insurance reimbursements, when they come at all, can take 90 days to arrive. A prepaid system with instant digital settlement gives providers guaranteed, predictable revenue. That is the financial foundation a clinic needs to stock medicines, retain qualified staff, and invest in reliable equipment. The pass does not just buy care. It finances the conditions required to deliver it.

What It Needs to Work

The infrastructure for this system is not a future aspiration. It already exists. M-Pesa and its equivalents have demonstrated that digital payment rails can reach the most informal corners of African economies. What is required now is three things working in concert: platforms that process pass redemptions on top of existing mobile money systems; provider networks willing to honor standardized care bundles at agreed quality levels; and regulatory frameworks that protect consumers and align prepaid healthcare with broader universal coverage goals. These are not trivial requirements, but they are orders of magnitude simpler than what Rwanda and Ghana attempted, and achieved, with their national insurance schemes, which required fiscal capacity and state coordination that most African governments cannot currently replicate. A pass system can begin with 50 accredited clinics in Nairobi. It does not need to start everywhere at once.

The Honest Caveat

To be sure, a prepaid health pass is not technically insurance, and it should not be mistaken for one. It cannot shield a family from the financial ruin of a cancer diagnosis, a surgical emergency, or a prolonged hospitalization. These catastrophic events are precisely what risk pooling exists to cover, and a pass does not pool risk. But here is the strategic logic that critics often miss: in markets where insurance has become synonymous with money that disappears, attempting to sell invisible risk protection first is a fool's errand. Fifty years of that approach has left 97% of the continent uncovered. The pass does something more immediately achievable. It solves for the high-frequency, low-cost healthcare interactions that constitute the vast majority of what African families actually need, while building the digital data and institutional trust that make more comprehensive coverage thinkable over time. You don’t build a bridge where no one’s trying to cross. You want to see people gather on the river bank first.

The Choice

Africa's healthcare crisis is accelerating: rising chronic disease burdens, persistently high maternal mortality, and government health budgets that have barely moved in a decade. Waiting for traditional insurance to eventually find its footing risks condemning millions to the impossible arithmetic of choosing between medicine and school fees, clinic visits and rent.

Healthcare passes may not be a silver bullet. No single product ever is. But they represent something rarer in African health policy than a grand vision: a starting point that matches the economic reality of the people it is meant to serve. The lesson from mobile money was never that the technology was perfect. It was that when a solution meets people where they are, adoption can be transformative.

The choice before Africa's health sector is not between flawed passes and perfect insurance. It is between accessible imperfection and inaccessible perfection. One of those options has been tried for fifty years. It is time to try the other.

As for our uncle and his extraordinarily productive cow: we are still deciding whether to believe the story. But the next time one of us gets that call, we would rather send a health pass than send a prayer.

Kelvin Chege (MBA ’26) is originally from Nairobi, Kenya. He holds a BSc in Electrical and Electronic Engineering from Jomo Kenyatta University of Agriculture and Technology and, prior to HBS, worked at McKinsey & Company in Nairobi, advising clients on strategy and digital transformation.

Joel Adu-Brimpong is a Ghanaian American MD/MBA candidate at Stanford University and a policy student at Harvard Kennedy School. He works at the intersection of medicine, technology, and health system strategy. His background includes digital health and care transformation at Cleveland Clinic and Stanford Healthcare, early-stage healthcare and life sciences ventures, and precision medicine research in obesity and cardiovascular disease at the National Institutes of Health. His work focuses on building digital infrastructure and behavioral systems that enable high-value care at scale.