health insurance coverage to the poor, further corroborates this. The MAP design directly addresses the major financial barrier faced by the poor who seek care by covering the costs to this population of the most expensive services (surgeries and inpatient services). Such a scheme mitigates unequal access to and utilization of health services by the poor. The evidence from the Life in Transition Survey, conducted by the World Bank in the Europe and Central Asia Region in late 2006, also shows that Georgia has fewer people complaining about unofficial payments in the public health system than in most of ECA countries.<sup>17</sup> The MAP may have reduced informal out-of-pocket payments.

The MAP has demonstrated a positive impact by increasing utilization of inpatient services among the poorest. However, this study does not look at the size of the overall impact, the long term impact, or the extent of the financial implications, all of which will require further investigation given the MAP is still at the early stage of implementation and has been in a state of constant flux.

Since January 2007, the government has made two major changes in response to the budget constraint caused by the dramatic increase in utilization. First, the government changed the cutoff from 100,000 to 70,000 in order to reduce the number of people eligible<sup>18</sup> Second, the government suspended the coverage for planned surgeries until September 2007 several months prior to the election. After September 2007, the government expanded MAP benefits to include a more generous package of outpatient care and has outsourced the MAP in Tbilisi and Imereti regions to private insurances companies as pilots. The government is in the process of providing similar insurance programs to teachers and other groups such as the military, law enforcement personnel and employees of state agencies.

However, these changes do not fully address some of the MAP’s design limitations. In the following discussion, we focus on four areas for further improvement of the program: eligibility criteria, benefit package design, expansion, and cost control mechanisms.

First, MAP eligibility is determined by only one criteria—a cut-off based on the proxy means test score. People with proxy means test scores above 100,000 (now above 70,000) are not eligible for the MAP and therefore are exempt from receiving free care even though they may, in fact, be very poor. This approach may help some poor but it is still far from equitable. Policy makers need to come up with solutions that soften these sharp distinctions and increase the overall equity in terms of access to healthcare services. One option is to introduce a variety of benefit packages, each with a different eligibility cut-off point. The drawback to this, of course, is that it is more administratively burdensome.

A detailed discussion on overall targeting performance based on proxy means test is beyond the scope of this study. But generally, targeting based on proxy means test alone invariably suffers from under-coverage and leakage errors. The recent Health Utilization and Expenditure Survey (HUES) shows that the MAP covers about 20% of the population in the poorest quintile while about 30% of MAP beneficiaries are from non-poor quintiles, suggesting that MAP suffers a

> 17 World Bank, “Salient Findings of the Life in Transition Survey, Europe and Central Asia Region,” February 2007. 18 Except for in the Adjara region, where the regional government budgeted additional monies in order to maintain the cut-off of 100,000.

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