Shielding the Vulnerable: Exploring Health Insurance as Financial Safeguard for Slum Dwellers in Dar es Salaam, Tanzania

Abstract

This study explores the interplay between health
insurance and out-of-pocket (OOP) expenditures
among slum dwellers in Dar es Salaam, where
financial barriers significantly impact access to
healthcare. Given the economic vulnerabilities
of these populations, understanding this
relationship is crucial for designing effective
health policy interventions. Therefore, the
purpose of the research is to estimate the effects
of health insurance on OOP expenditures among
this demographic. Employing a cross-sectional
research design, the study collected data from a
sample of 400 households using questionnaire,
ensuring a robust representation of the target
population. The analysis was conducted using
the Probit model to ascertain the initial
probabilities of insurance coverage, followed by
the two-stage least squares (2SLS) method to
account for potential endogeneities and provide
a clearer picture of the impact of health
insurance on OOP expenditures. Findings from
the Probit model indicate demographic
characteristics like marital status, and education
are significant likelihood of influencing health
insurance coverage among slum dwellers.
However, the 2SLS model highlights that health
insurance reduces the burden of medical
expenses, and its effectiveness is contingent upon
the breadth of coverage and the healthcare needs
of the insured. Based on these insights, the study
recommends the expansion of health insurance
coverage in slum areas, with a focus on
enhancing the comprehensiveness of these
insurance plan.