Why non-take-up of social health insurance benefit is increasing

Written by Gaya:  Published in Business Times Newspaper

Friday, 03 February 2012 07:15

 

Social health insurance benefit is an important catalyst for socio-economic development in a country.  Tanzania is one of the poorest countries in the world with estimated GNP per capita of about USD 260.00 (2000 estimates) and a GDP growth rate of about 4.0 percent per annum.  The population growth rate is 2.8 percent per annum.  Agriculture is the mainstream of economy and accounts for 75 to 78 percent of the total export earnings.  The total export earnings are sufficient to meet only one third of the country’s import requirements. Social health insurance is also an important stimulus for development of the health sector in a country.  It helps to strengthen accessibility, affordability, equity and quality of health care.

In Tanzania the state of health amongst the population is poor notwithstanding the tremendous drive by the Government to remedy the situation.  The crude birth rate is around 41 per 1,000 populations and the fertility rate is 5.6.  Infant mortality rate is about 99 per 1,000 populations and the average life expectancy at birth is about 49 years (female) and 47 years (male).  HIV/AIDS prevalence rate among adults is about 10–14 percent.  There is wide disparity in the availability of health services from one part of the country to another.

The socio-political climate in the country is characterised by increased interest in privatisation and shift of the economy from socialist orientation to capitalist market orientation.  Globalisation is also taking the country by storm and the population dynamics are rapidly changing.  Rural–urban migration is rapidly rising.  All these changes demand establishment of social institutions like the social health insurance schemes to stabilize the economy. NSSF is a Social Security Organization administering several social security benefits to its members and their dependants.  The Act establishing the Fund empowers it to administer social health insurance benefit to its members.

The Tanzania population has been exposed to free medical care for several decades.  The concept of social health insurance is new to them and may not be readily understood and accepted. It is well known that the Fund is well established and has been operational for several years. And we believe that up to date the Fund has enough capacity, in terms of health manpower, to handle the demands of social health insurance scheme.

The government has put in place a number of policy initiatives and strategies to stem poverty and strengthen health care and delivery in the country.  GDP growth rate per annum is targeted to rise from 5.2 percent to 6.0 percent in the next three years and per capita expenditure on health was targeted to rise from USD 6.00 in 2001 to USD 9.00 in 2004 and thereafter to USD 12.00. There are many health institutions in the country, both public and non-public, which can be used by the Fund to operationalize the Health Insurance Scheme. 

A number of health insurance schemes have been established in the past few years. These include the National Health Insurance Fund and several private insurance schemes.  Experiences from these schemes we believe that would enable the Fund to run its social Health Insurance Benefit scheme (SHIB) more efficiently and effectively.

The rate of enrolment of beneficiaries is said to be unsatisfactory, what are the factors influencing the low rate of enrolment of social health insurance beneficiaries. Contribution rate by members is fixed.  From its inception in 1998, NSSF has collected 20 per cent of insurable earnings even though this is above the ILO's recommendation of 8 per cent of insurable earnings. The maintenance of the contribution rate at a level higher than necessary seems to have been justified on grounds that the NSSF continues to permit young insured members to withdraw their pension contributions under certain conditions. This is an assurance enough to meet the needs of the insurance scheme for its members.

 

This situation has probably created a public perception that the NSSF is a continuity of the former NPF and that their pension contributions are savings that can still be withdrawn for specific purposes. This appears to be in conflict with the basic objective of a social insurance pension scheme, where in principle all monies collected should be utilized for the explicit purpose of providing lifetime pensions and other benefits according to the enacted legal provisions. 

The consequences of this approach have been the withdrawal of large parts of the pension contributions available to the young people concerned before retirement, and the payment of lump sums instead of a periodic pension. Both of these relegate young people and other beneficiaries to the ranks of the poorest, once they have exhausted the funds so paid out. But at the same time the evasion of pension contribution is said to be increasing at increasing rate.