Health Insurance Schemes Financing and the Healthcare Insurance Uptake in Kenya
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Date
2025-04
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Publisher
Kenyatta University
Abstract
Health insurance financing schemes are crucial to the health of the population because they facilitate access to health care, insulating individuals from out-of-pocket expenditure and catastrophic expenditures. However, most of the health insurance financing schemes have reported a very low retention rate, with about 57 percent not renewing their financial subscriptions in subsequent years. Consequently, there has been a decline in the uptake of health insurance where about 17 percent of the population are members to any health insurance financing scheme. This leaves over 80 percent of the population exposed to out-of-pocket expenditure and the majority of whom are incurring catastrophic expenditure. Subscription to health insurance schemes is used in many countries as a means of enabling health uptake and prevention of households from falling to poverty through catastrophic expenditures. In addition, through health insurances subscriptions, health insurance schemes are well financed to resources-pull for adequate health finance. However, the health insurance uptake is noted to be low in Kenya. This established the effects of various forms of health insurance schemes financing on health insurance uptake in Kenya to determine their effect on health insurance uptake. The specific objectives of the study included establishing the effect of direct private health insurance schemes financing on health insurance uptake in Kenya, determined the effect of employment-based health insurance schemes financing on health insurance uptake in Kenya, and also established the effect of social health insurance scheme financing on health insurance uptake in Kenya. The study equally investigated the intervening effect of government policy on the relationship between health insurance scheme financing and health insurance uptake in Kenya. The study was underpinned on Moral hazard theory, Information Asymmetry Theory, purchase behavior theory and expected utility theory. The study used correlation research design using time series data and targeting all the insurance companies that provide health insurance schemes and the national health insurance fund. Autoregressive Distributed Lag model was adopted spanning from 1980 to 2023. This period coincides with the period where the uptake of health insurance is not to have declined. Secondary data was obtained from certified financial statements of the health insurance companies and economic surveys. The study also assessed several assumptions related to estimation techniques, including heteroscedasticity, multicollinearity, normality, and linearity tests. The findings established that direct health insurance scheme financing has a positive and significant effect on health insurance uptake in Kenya. The results also showed that employment-based health insurance scheme financing had no effect on health insurance uptake in Kenya both in the short term and in the long run. Equally, social health insurance scheme financing was found to have a positive and significant effect on health insurance uptake in Kenya. Government policy had moderating effect on the relationship between health insurance schemes and health insurance uptake in Kenya. The study has recommended that the government should put proper system to increase direct private health insurance scheme financing. The government should also institute policy to consolidate different health insurance schemes financing with different premiums for effectiveness and equity.
Description
A Research Proposal Submitted to School of Business, Economics and Tourism in Partial Fulfillment of the Requirement for the Award of Degree of Master of Business Administration (Finance Option) of Kenyatta University, April 2025.
Supervisor
Jeremiah Koori