The Financial Impact of Formal Health Insurance Schemes: Evidence from Uganda


With only one licensed health insurer targeted at the informal segment, Uganda relies heavily on out-of-pocket payments for health care financing. Financial consequences are severe in the short and the long-term. Medical bills are larger than people’s ability-to-pay, one feels less financially secure and uses other (expensive) measures to cover health care expenses. Many households are forced to borrow from the community for which the long-term impact can be disastrous. Community loans ask high interest rates on monthly terms and, accumulated, this reduces one’s ability to cope with future shocks. The sale of assets as a last resort also occurs in many cases. To this end, the study investigates the effects of Microcare’s health insurance scheme on rural and urban households in Uganda. Furthermore, the vulnerability of the poor against the most common illness, malaria, is investigated. As evidenced by the data on household level in Uganda, access to insurance does increase financial risk protection, leaving the poor with stabilized expenditure levels from which sustainable growth can be realized.






CGAP Working Group on Microinsurance


Microfinance Gateway

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