Analysis of the Impact of Rural Households Membership in the Micro Health Insurance on the Utilization of Health Services in Tanzania

This paper analyses the utilization of health services among the members of micro health insurance schemes in rural areas in Tanzania. Most literature on health insurance in rural areas in developing countries, including Tanzania, had analyzed socio-economic determinants of the households’ demand for health insurance plans. Little attention has been given to the outcomes of purchasing the health insurance plans as the determinants of membership in the schemes. This is the research knowledge gap that this study seeks to fill. In order to examine the effect of households’ membership in the micro health insurance schemes, on the utilization of health services, the matching estimator method has been adopted. In addition, the data from Tanzania Demographic and Health Survey of 2011 were used to analyse the outcome of households’ membership in the health insurance schemes on the utilization of health services. The findings revealed that the membership in the micro health insurance plans increased the utilization of the health services among the poor households, but not for the non-poor. Moreover, the insurance schemes did not provide protection against catastrophic health spending among the rural households in the episodes of illness. The reasons are that the households had to incur additional expenditures when visiting the health facilities in episodes of illness and that the plans provide limited range of benefits to households. Thus, it is recommended that poor households should be encouraged to enrol in the micro health insurance schemes. Moreover, the health facilities should provide adequate supplies so as to minimize out of pocket spending for households in the episode of illness.