Household’s Ability to Afford Health Insurance Packages in Tanzania

Abstract

Most developing countries worldwide are striving to provide universal access to quality and affordable health care services. In turn, health insurance has been promoted as one of the ways to ensure universal coverage and financial protection. This study analyzed households’ ability to afford health insurance packages in Tanzania. The study used the recent 2017/18 Household Budget Survey income data collected by the National Bureau of Statistics and premiums for health insurance packages provided by the National Health Insurance Fund. Households were categorized into four quartiles based on their income, ranging from households with the lowest income to those with the highest income. The study adopted the SDGs indicator 3.8.2 which suggests that health spending should not go beyond 10% percent of household income as the threshold to examine household ability to afford the insurance packages. It was found that most of the households with low to moderate incomes, which account for three quarters of all households, are required to spend more than the recommended 10% threshold of their incomes in purchasing health insurance packages. This is unlikely to be affordable, thus, subjecting them to catastrophic health spending. Although most of the households in the fourth quartile spend less than 10% of their incomes on insurance packages, this is a relatively small group accounting for only 25% of the households. Thus, health insurance coverage is likely to remain low, especially among poor households. It is recommended that the government should provide subsidies to health insurance schemes in order to extend coverage to the poor who cannot afford health insurance packages to enhance financial protection and health coverage.