Description:
Background The achievement of the global agenda on universal health coverage (UHC) is pivotal in ensuring healthy lives and promoting the well-being of all. However, achieving healthy lives and wellbeing of all has been hampered by the challenge of health care fnancing. As such, healthcare fnancing, through health insurance is gaining popularity in developing countries such as Kenya, in their pursuit to achieve universal health coverage. The primary purpose of health insurance and delivery is to improve health. However, there is a paucity of evidence on the efectiveness of health insurance in improving the health outcomes and health status of the Kenyan population. Therefore, this study aimed to analyze the impact of health insurance on health outcomes in Kenya. Methods The study utilized the most recent nationally representative Kenya Integrated Household Budget Survey (KIHBS) 2015/16 dataset in order to analyze the impact of health insurance on health outcomes. The instrumental variable 2-stage least squares (IV 2SLS) and control function approach (CFA) estimation techniques were used to cater for potential endogeneity and heterogeneity biases present in ordinary least squares (OLS) estimators. Results Health insurance enrolment leads to a reduction in mortality, thereby improving the health status of the Kenyan population, despite low levels of insurance uptake. However, the insured population experienced higher chronic illnesses and out-of-pocket (OOP) expenditures raising concerns about fnancial risk protection. The fact that health insurance is linked to chronic illnesses not only reinforces the reverse causality of health insurance and health status, but also that the efects of potential adverse selection strongly drive the strength and direction of this impact. Conclusions We conclude that health insurance enrolment reduces mortality and hence has a benefcial impact in promoting health. Health insurance coverage therefore, should be promoted through the restructuring of the National Hospital Insurance Fund (NHIF) fragmented schemes and by consolidating the diferent insurance schemes to serve diferent population groups more efectively and equitably. The government should revisit the implementation of a universal social health insurance scheme, as a necessary step towards UHC, while continuing to ofer subsidies in the form of health insurance to the marginalized, vulnerable and poor populations.