Abstract:

The AIDS-pandemic in Sub-Saharan Africa puts increasing pressure on the buffer capacity of low and middle income households without access to health insurance. This paper examines the relationship between health expenditures/shocks and access to health insurance for the purpose of initiating a policy discussion about the potential impacts of a unique subsidized low-cost private health insurance program in Namibia. It uses a unique dataset based on a random sample of 1,769 households and 7,343 individuals living in the Greater Windhoek Area in Namibia. In addition to a socio-economic and a bio-medical survey, the study includes medical testing for HIV-infection. This allows for an explicit analysis of HIV-related health shocks. In particular, the paper investigates the relationship between health shocks, insurance status, and health seeking behavior and examines the possible mitigating effects of insurance on income loss and out-of-pocket health expenditures.