1. HEALTH INSURANCE Definition. Health insurance is defined as insurance against the risk of incurring medical expenses among individuals. Health insurance covers a small but growing portion of the population in most developing countries Important element of insurance include  risk-sharing  prepayment.  Premiums Plans vary in the extent of and mechanisms for insurance coverage for drugs.

2. Forms of Health Insurance. The main forms of Heath Insurance are 1.Public/Social health Insurance 2.Private health insurance

3. 1.Public/Social health Insurance Compulsory universal coverage under a social security (publicly mandated) system financed by employee and employer contributions to nonprofit insurance funds with public and private ownership of sector inputs. health services are paid for through contributions to a health fund. The most common basis for contributions is the payroll, with both employer and employee commonly paying a percentage of salary. The health fund is usually independent of government but works within a tight framework of regulations.

4. Public/Social health Insurance………. Premiums are linked to the average cost of treatment for the group as a whole, not to the expected cost of care for the individual. Hence there are explicit cross-subsidies from the healthy to the less healthy. In general, membership of social health insurance schemes is mandatory, although for certain groups (such as the self-employed) it might be voluntary.

5. 2.Private (Risk-rated) health insurance Is a mechanism for pooling contributions from a group of individuals who have similar characteristics that are expected to be related to the use of health service, and for paying for part of all of defined health services costs incurred by members. This type of insurance then pools the contributions within these risk-stratified populations.

6. In general, within each risk pool, premiums are the same for all persons regardless of income or ability to pay. The characteristics that influence contribution rates may be related to family size, health status, age, employment etc. Payments from the pool may be directly made to providers of services or as re-imbursements to insured members for (part of) the health costs incurred.

7. Because poor people often have larger families, and worse health than do higher income people, private health insurance premiums for the poor

8. Health insurance in Tanzania According to MoHSW (2003) health insurance policy has a relatively longer history in Tanzania (since 1993) than other health financing schemes currently running in the country, NHIF was established by the Act of Parliament No. 8 of 1999 and began its operations in June 2001. The scheme was initially intended to cover public servants but recently there have been provisions which allow private membership.

9. Health insurance in Tanzania………….. The public formal sector employees pay a mandatory contribution of 3% of their monthly salary and the government as an employer matches the same. This scheme covers the principal member, spouse and up to four below 18 years legal dependants. There has been a steady increase in coverage from 2.0% of the total population in 2001/2002 to 7.1% in 2011(NHIF, 2013). On the other hand, there has been a commitment to expand the insurance coverage in the country; however the insurance schemes are highly fragmented

10. Public Health Insurance Schemes in Tanzania There are four health insurance schemes which are publicly owned, namely 1.National Health Insurance Fund (NHIF), 2.Social Health Insurance Benefit (SHIB) established as a benefit under the National Social Security Fund (NSSF) ; 3.Community Health Fund (CHF) and 4.Tiba Kwa Kadi (TIKA).

11. Private Health Insurance Schemes/Agencies. Recent statistics shows that there were about 7 private firms as indicated in the Tanzania Insurance Regulatory authority (TIRA) which are providing health insurance,these are; – Strategies Insurance – Jubilee Insurance – AAR Insurance – Labedan Insurance – Resolution Insurance – Milembe Insurance – MIC Global Risks LTD

12. NATIONAL HEALTH INSURANCE FUND (NHIF) Historical Background. The National Health Insurance Scheme (NHIF) is the outcome of a 1990-1992 study on the long-term options for financing health services in Tanzania. It was established by an Act of Parliament: Act No. 8 of 1999. The scheme commenced its operations on 1st July 2001 by members and their respective employers starting to contribute

13. Historical background…………. The plan was give members access to a pre- established package of services. public or private institution has been accredited by the Insurance Fund (NHIF) to provide service. Currently, contributions are from government employee salaries Public facilities are providing health services to members. 13

14. Principles in establishing the NHIF Strengthening cost sharing in government health facilities by providing anopportunity for formal sector employees to contribute Providing health insurance to employees in the formal sector especially after the introduction of user-fees 14

15. Principles in establishing the NHIF……….. Allowing free choice of providers to civil servants -- who were previously restricted to government health facilities Enhancing health equity among employees in the health sector Providing an environment for the growth and participation of the private sector 15

16. NHIF Coverage The scheme is compulsory; it covers all public sector employees. However on the first two years of operations the Fund covered only Central Government employees. The membership base was extended to cover all public servants in 2002 16

17. NHIF Coverage…… Coverage was to all formal sector employees The membership includes principal members their spouses and up to four children and/or legal dependants. Where both a couple (man and woman) are both workers in the public service have equal rights to register four different children or dependants. 17

18. NHIF Coverage…… The scheme has no option for opting out. The Minister of Health has been empowered to determine any other category of workers to become members of the scheme. The scheme may eventually include optional members. 18

19. Powers of the Board of Directors NHIF The NHIF Act section 30 (j) empowers the Board of Directors to:- Determine the benefit package to members review and make improvements to the benefit package, accredit providers/ the hospitals or health facilities are d by the Fund review of the rates used to reimburse the health care providers. Provide facilitative loans to health providers Eg Cash, equipment, supplies 19

20. Conditions to the Accredited providers The drugs prescribed should be from the list of essential drugs. The prescriptions should be generic where available; In-patient services include accommodation, medication, examinations, investigations and surgery which ranges from minor to super specialized surgery. 20

21. Conditions to the Accredited providers…….. The Fund benefit package is progressive subject to actuarial assessment that is done every year and the actuarial valuation that is done every three years. The Fund has already increased the number of benefits offered both to beneficiaries and enhanced reimbursement to providers In order to access higher-level health facilities a referral letter from lower levels is required. 21

22. Benefits and Packages provided by NHIF Basically NHIF benefits and packages include – Registration & consultation fees, – Medical cost, – Investigation fees, – Inpatient Care Services, – Surgical Services, – Dental Services, – Optical Services, – Physiotherapy, – Health Care for Retirees, – Medical/Orthopaedic appliances and others.

23. Benefits associated with Health Insurance HI helps prevent people from falling into poverty due to health care costs – i.e. catastrophic expenditure due to accidents or disease – since SHI combines prepayment and risk pooling with mutual support. HI may be more acceptable than tax funding in some countries as a framework for developing risk pooling and social solidarity. – This may be the case particularly in countries with a high current dependence on user fees. – This is due to the more transparent flows of funds and the link between payments and entitlements. – It therefore seems more compatible than tax funding in terms of personal responsibility and compatibility with the wider market economy.

24. Benefits…………………. HI can mobilize additional resources for the health system, such as funding from employers. HI can provide a stable source of funding for health care, which is separated from the general government budget and independent of budget provision. HI does not compete directly for a share of the public budget.

25. Benefits…………………. HI is more just and more equitable than out- of-pocket spending and commercial insurance. HI can help to strengthen patients’ rights as customers of health care providers. HI can improve transparency of prices, costs and expenditure. Provides assurance of health services when member gets sick

26. Benefits…………………. The SHI framework encourages the development of explicit purchasing arrangements and greater provider autonomy, which can increase efficiency in health care. Employers and employee representatives have incentives to monitor spending if they are part of the social insurance management setup. Increase accessibility of health services to the individuals Helps to improve the quality of health services at facilities

27. Identity cards and forms Under section 15 (1) of the NHIF Act, the Fund is obliged to issue an identity card to every registered member. for the identity card to be issued, members are required to properly fill NHIF registration forms the employers certification is compulsory before being sent to the Fund offices. Fund is required to produce identity cards Cards are distribute to employers so that they can be handled over to members. 27

28. Identity cards and forms:. The Fund devised a special NHIF “sick sheet” to be used with the employers’ identity cards whenever members required to access services from the accredited health facilities. No beneficiary can have access to health care services without the NHIF Identity card. 28

29. Premiums/contributions: The contribution rate provided in the Act establishing the Fund is 6% of the monthly employee’s gross salary (met equally by both employer and employee i.e. 3% each). The Act provides for a penalty of 5% to the Employer who delays in remitting contribution to the Fund. The employers are required to remit contributions at the Accountant Generals Office (Ministry of Finance-Treasury) and then the submitted to NHIF 29

30. Provider payment mechanism Today, providers are reimbursed through a fixed fee per service; But, the Fund Administration is expected to :- – gradually move to capitation a the volume of business and – Gradually address the needs to increase the benefit package in its complexity of medical issues. 30

31. Accreditation Phases The Fund has gone through three phases in the accreditation process. In the first phase, all 2,937 public health facilities were automatically accredited through Government circular of 18th September 2001. This accreditation considered the fact that Tanzania is one of the countries with the best health service networks in Sub-Saharan Africa. 31

32. Phase II of accreditation. Members were frustrated when they could not obtain prescribed medicines, which should have been covered in the benefits package because of stock-outs in public facilities. In order to alleviate this problem the Fund entered in the second phase of accreditation. The second phase-involved the Faith Based and NGO’s health facilities where the problem of out of stock rate is low. A total of 519 more health facilities have been accredited in this phase. 32

33. Phase III : Involved private The third phase involves private for-profit health facilities. This was part of the strategy to minimize problems drug shortages and the government emphasis to strengthen public private Partnership (PPP) in service delivery. Already 36 pharmacies have been accredited in all regions. Claims Processing: During the first year of the Fund 33

34. Claims Processing During the first year of the Fund operations the reimbursement rate to health service providers was very low – below 50 percent, currently the re-imbursement rate has risen to an average of 70-85 percent. This has to a great extent been a result of a massive education programme given to health service providers conducted throughout the country. This campaign has increased the capacity of health service providers to lodge claim forms correctly and timely 34

35. Challenges Associated with Health Insurance(General). SHI constitutes an administrative challenge, requiring capacities and infrastructure that may be in short supply. People may not understand and accept the concept of health insurance. Thus health insurance needs to be explained to many people, especially in developing countries and among poorer and less educated communities.

36. Challenges…………… There may be limited enthusiasm for solidarity and mutual support. It may require more administrative effort to register workers in the informal sector and to collect contributions from them. Functional responsibilities for pooling and purchasing may be duplicated, unless there are synergies with other schemes and mechanisms.

37. Challenges…………… The capacity to provide services of appropriate quality is required. SHI schemes may worsen existing inequalities in financial protection, especially during their initial development, if formal-sector employees are covered first. Special mechanisms may be needed to cover the poor who are unable to pay contributions.

38. Challenges(NHIF Tanzania). The Fund is expected to operate (i.e., manage all costs of reimbursement, planning, monitoring, tracking membership and services, defining standards for and accrediting facilities, continually refining service standards and benefits packages, responding to enormous inquiries from members and providers, main source of funding for the Fund) with only 8% of the Fund’s total income. The insufficient Fund to effectively run its operations, including staffing, opening of Zonal Offices and other administration activities. 38

39. Challenges(NHIF Tanzania)……… The Fund is obliged under the legislation (sect 15 (1) of the NHIF Act) to issue identity card to every registered member. This process has been delayed by the low rate – of submission of properly filled NHIF membership forms (requiring 3 photographs for each beneficiary). 39

40. Challenges(NHIF Tanzania)……… The number of pharmacies accredited is small since Part I pharmacies in the country are very few, and some pharmacies are reluctant to register fearing they will not be paid the market price (as they do to non members). Accrediting Part II pharmacies (drug outlets) in villages is a challenge because most of these stores lack qualified staff and are thus limited by law in the types of drugs they can dispense. 40

41. COMMUNITY HEALTH FUND AS A COMPLEMENTARY FINANCING OPTION IN TANZANIA Definition. Community Health Fund (CHF) in Tanzania is a voluntary pre- payment scheme, which offers a client (household) the opportunity to acquire a “health card” after paying contribution. A household can be an individual or a family A health card is renewed after every 12 months.

42. 42 Background  CHF in Tanzania started as a pilot scheme in 1996 in Igunga district.  The scheme was a result of studies conducted in 1990-92 on willingness and ability to pay.  Implementation experience of Igunga was evaluated in 1998 then used to roll out the scheme to nine more districts.  In2001, the policy decision was reached to cover all districts through an Act of Parliament.

43. 43 CHF Concept & Design in Tanzania  It is a voluntary scheme.  It is district based.  CHF entails pre-payment for health care and risk sharing.  Provision of user fee for non-members  Exemption mechanism for poor and vulnerable groups.

44. 44 Concept & Design Cont….  The scheme operates in partnership between communities and the Government.  The Government provide “Matching Grant” to CHF scheme at district level.  Communities can pay contributions during harvest time and enjoy services throughout the year.  Council Health Service Board and Community Health Committees manage the Fund.  CHF scheme is not intended to replace the government funding.

45. 45 Objectives of CHF according to Act No.1 of 2001  Mobilize financial resources from the community for provision of health care services to its members.  Provide quality and affordable health care services through sustainable financial mechanism.  Improve health care management in the communities through decentralization.

46. 46 Expected Results  A sustainable financial mechanism.  Adequate medical supplies and equipment at health facilities.  Improved quality of health care services  Adequate, skilled and motivated health providers  Improved community participation.

47. 47 Implementation Status of CHF Achievements by 2011  Operational guideline for introduction and management of the scheme is in place.  92 DC’s have been sensitized and adopted CHF Legal Instrument.  69 DC’s have launched the scheme and are in various stages of implementation.

48. 48 Achievements Cont…..  Between July 2004- June 2006 the total of Tshs 800,000,000/= was requested and paid as matching grant.  Capacity building have been done to districts  Improved infrastructure of health facilities  Supportive supervision have been performed accordingly.

49. 49 Achievements Cont…..  The mobilized financial resources are used for health care improvement e.g. rehabilitation.  The introduction of new CHF management tools and software (CHF TRACK).  Contract between MOH&SW and individual councils on expenditure framework of the matching grant.

50. 50 Concerns and Challenges (a)Low enrollment of members  Membership ranges from 4%-20% in councils Inadequate Management skills (b)Inadequate Management skills  CHF is expanding faster (to more districts) than management skills.  Improper record keeping in some councils.

51. 51 Concerns and Challenges Cont…. ( c) Supervision conducted to councils revealed the following:  Inadequate community awareness on CHF  Inadequate community involvement and ownership.  Poor quality of care and lack of accountability to the community.  Leakages or loss of fees collected.  Misuse of membership cards.

52. 52 The Way Forward 1.Extend the use of New CHF management tools and software to all councils in phases 2.Enhance monitoring and evaluation at all levels 3.Harmonize premium country wide 4.Continue to improve advocacy program at all levels 5.Strengthen planning and management skills through on the job training and other training opportunities

53. 53 The Way Forward Cont… 6.Strengthen coordination by use and maintaining Zonal and Regional Coordination Centres 7.Provision of required materials and equipment to councils 8.Ensuring the involvement of all key stakeholders in CHF promotion and implementation process

54. 54 The Way Forward Cont… 9.Assist councils in reviewing and improving the benefit package overtime 10.In built incentive package in CHF promotion program.