Assessing efforts towards universal financial risk protection in low- and middle-income countries

Understanding the effect of the takeover of an informal sector health insurance scheme by a formal sector scheme on universal coverage (UC) in terms of risk pooling and purchasing in Tanzania.

During the past ten years, Tanzania has made efforts to expand health insurance coverage. However, health insurance remains highly fragmented, with a variety of schemes in existence. Overall coverage is low, reaching less than 10% of the population nationally. In the absence of health insurance, households are typically required to make high out-of-pocket payments, limiting access to care for the poorest groups.

The largest health insurance scheme, the National Health Insurance Fund (NHIF), is compulsory for public servants and began operations in 2001. The NHIF is administered by an independent body answerable to the Ministry of Health and Social Welfare (MOHSW). However, given that over 90% of the population in Tanzania work in the informal sector, this fund has a limited reach. The Community Health Fund (CHF), a voluntary pre-payment scheme, is the largest scheme targeting the informal sector. With support from the World Bank, the MOHSW rolled out the CHF in 2001, managing it at the district level (now in 72 of 92 rural districts across the country). A third insurance scheme known as “Tiba kwa Kadi” (TIKA) intends to operate on a similar basis as the CHF but is implemented in urban councils. TIKA has so far been rolled out in 18 urban councils, and is in the process of a national roll out.

Still, low enrolment rates remain one of the biggest challenges for CHF/TIKA, with national coverage estimated at less than 4%. In early 2009, discussions were held between the NHIF management and the MOHSW regarding the NHIF taking over the management of CHF/TIKA. The initial emphasis of the NHIF will be on increasing the enrolment rate of CHF/TIKA and improving financial sustainability and management systems.

The main goal of the study is to assess to what extent the NHIF’s management takeover from CHF/TIKA (hereafter termed ‘the reform’) has enhanced progress towards universal coverage (UC) in terms of risk pooling and purchasing, and to explore the reasons for the progress or lack of progress in order to inform future policy.

The study will begin by exploring whether the initial motivation for the reform was driven by a desire for progress towards universal coverage. It will also assess whether existing management and financing structures support or impede the reform, and document any changes made to these structures over time. Among other things, it will also assess whether the reform has led to greater risk pooling through higher levels of insurance coverage among the informal sector and the greater pooling of funds among the informal sector and/or among the informal and formal sectors.

While it is unlikely that major changes will occur during the study period, the proposed research will provide a picture of whether the foundations are in place for progress in terms of universal coverage, and will offer valuable lessons for informing future policy.


Project description

Programme: Assessing efforts towards universal financial risk protection in low- and middle-income countries

Research title: Understanding the effect of the takeover of an informal sector health insurance scheme by a formal sector scheme on universal coverage (UC) in terms of risk pooling and purchasing in Tanzania.

Thematic Research Area: Health Financing

Grantee Country: Tanzania

Grantee Institution: Ifakara Health Institute

Programme coordinator: Dr Josephine Borghi

Start date: Autumn/ Winter 2010

Status of grant: Completed

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