Determinants Of Choice Of Health Insurance Plan Among Rural Households In Kenya.

Abstract

In Kenya, health insurance coverage is low with approximately 17 percent of the country’s population having a form of prepayment health insurance cover. Health insurance coverage has largely remained an urban phenomenon with rural households excluded from the insurance market. Only 12 percent of household living in the rural areas are covered by health insurance against 27 percent of urban household. This study aims to understand the determinants of health insurance choice among rural households. The study builds from the utility maximization framework where individuals choose a set of alternative that produce the highest utility. Using the Kenya Household Health Expenditure and Utilization Survey 2013, multinomial model is estimated. The results show that household income, wealth and employed status significantly increases the likelihood of health insurance ownership. Also, education, age, marital status and access to information significantly contributes to health insurance ownership and choice. However, individual who indulge in smoking are less likely to insure against illness with any form of health insurance. Policies targeted at improving living standards, education levels and health insurance awareness are likely increase health insurance demand among rural households.