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

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.