Regulations of private health insurance : operation and its outcomes on enrollment and health services utilization of beneficiaries in Dar es Salaam

Abstract

Regulation is often seen as a potential solution to addressing the many problems which take place in the private production, financing and delivery of health services. For Private Health Insurance (PHI) markets to be able to meet public health objectives of equity, affordability and universal access to healthcare, and avoid insurance adverse effects of moral hazard, adverse selection and risk selection, their regulation needs to be effective (AI-Khatib, 2007). In this context, this study was conducted to explore the effectiveness of the existing regulatory framework of the PHI market and its outcomes in terms of succeeding to avert risk selection, adverse selection and moral hazard. Consumers' involvement in regulation of the PHI market in Dar es Salaam was also explored. A cross-sectional analytical study using both qualitative and quantitative methods was conducted with 200 beneficiaries and seven representatives from both the regulatory authority and five private health insurance companies being interviewed. Information on how the PHI market operates with the existing regulatory framework and factors affecting effectiveness was obtained. The results indicated that regulation of the PHI market was done by the Tanzania Insurance Regulatory Authority in the same way as for other insurance markets with no regulations specific to health insurance. Apart from licensing and finances, there were no regulations on coverage, enroIlment, premiums, benefit packages or provider payment mechanisms. The capacity of the authority to regulate the PHI market was found to be low in terms of lack of sufficient resources including personnel and expertise. Risk selection, adverse selection and moral hazard were

Vlll found to be practiced in the market and consumer involvement in regulation was found to be low. The findings provide information that may be used to guide regulators and policymakers on issues that require regulation in the existing PHI market in order to attain equity, affordability and increase access to healthcare. Further studies on how to involve consumers' more in regulations are also required to ensure they are adequately protected.