Digital Systems, Data unlock path to Universal Health Insurance in Tanzania

Tanzania, a nation of more than 60 million people with youth making up the bulk of theworkforce, faces a sobering reality: as of June 2023, only 8 percent of the populationhad health insurance coverage through the National Health Insurance Fund (NHIF).

A country where the majority of its productive population lacks health insurance is, inessence, putting its economic engine at risk especially at a time when it is striving to transition from middle-income to a higher-income economy.

For the past two decades, Tanzania has relied on two main health insurance schemes: NHIF, which primarily serves the formal sector, and CHF/iCHF, which targets the informal sector.

Yet, overall coverage across both schemes has consistently remained low. In response, the government charted a new course with the Universal Health Insurance Act passed on November 10, 2023 and gazetted on December 1, 2023 before officially being enforced on August 14, 2024.

The legislation seeks to unify formal and informal sector schemes into a single system designed to guarantee equitable access to quality healthcare, even for those unable to pay.

The law’s objectives are twofold: strengthen financial protection for households and improve access to quality healthcare for all.

However, achieving this will require not only sound policy and financing, but also lessons from regional peers, reforms in governance, and a strong dose of innovation.

Membership is now mandatory for groups specified by law, including low-income households and workers in the informal sector.

Essential health services will be standard across all schemes, while regulations and guidelines, set to be updated continuously, including in 2025, will ensure proper coordination under a single regulatory body.

The Pre-UHC era

Despite progress, the legacy system still faces deep-seated challenges. In the formal sector, uptake has been low: while 15 percent of Tanzanians hold some form of insurance, only about 10 percent use reliable schemes under NHIF or private schemes.

Strikingly, many of these members are individuals who were already unwell when enrolling. For those in the informal sector, enrolment rates among youth and low-income earners are even lower.

Complicated enrolment and renewal procedures requiring them to visit insurer offices remain a barrier, leading many not to enrol or drop out after the first year.

Poor service experiences at health facilities have further discouraged renewals.

Affordability remains another major hurdle. Roughly 27 percent of Tanzanians live in extreme poverty, meaning unable to pay premiums.

For those who are not in the poorest group, Insurance companies often demand full annual payments upfront from informal workers, an unrealistic expectation given their unstable incomes.

High administrative costs and poorly selected provider reimbursement mechanism and expensive claims processes contribute to increasing scheme costs and hence driving premiums upward.

What must be done?

a) Identifying groups in need of subsidies

The Universal Health Insurance Act mandates both compulsory enrolment for those

who can afford to pay and government subsidies for low-income earners. Yet identifying and enrolling these groups remains complex.

The government has set up an Equity Fund to finance subsidies, but without accurate targeting, funds may be stretched thin. Here is where digital systems and data can make all the difference:

Advanced data collection, including the use of Artificial Intelligence (AI) and mobile phone records, can help pinpoint households most in need. This would allow the government to channel subsidies effectively and at lower administrative cost.

The insurance sector can borrow a leaf from the financial sector, where with mobile data analytics, a loan can be provided to individuals without any documentation.

b) Simplifying enrolment, premium collection, and eligibility

For universal insurance to work, efficiency in registration, premium collection, and eligibility verification are essential. Digital platforms can enable self-enrolment (and re- enrolment), which proved effective during the iCHF pilot in Kilimanjaro conducted by PharmAccess (I-NGO) and NHIF, where informal sector uptake increased.

Technology can also support flexible premium payment options, allowing monthly rather than annual premiums, an especially critical adaptation for workers in the informal economy.

c) Strengthening patient identification and interoperability

Integrating national IDs (NIDA), health records, and insurance numbers will reduce duplication, streamline patient management, and lower claims costs. Interoperability is a cornerstone for an efficient universal system.

d) Digitizing claims submission and provider payments

Timely provider payment is crucial for trust and service quality. Digital claims systems enhanced by AI can cut processing delays, limit fraudulent claims, reducing the financial strain on health facilities and ensuring patients receive better care.

With technology reforms, it should be possible to consider different, more efficient provider reimbursement mechanism like capitation or DRG compared with currently used fee for service model which attracts over services and prone to frauds.

e) Linking payments to service value

The current reimbursement system, heavily manual, often undermines efficiency. A digital, performance-linked payment (value based care) model would tie reimbursements to the quality of services provided, incentivizing providers to prioritize patient outcomes rather than just claims.

The integration of digital systems and data-driven decision-making including AI offers Tanzania a pathway to overcoming long-standing barriers to health insurance.

By broadening reach, reducing costs, and improving service delivery, technology can unlock the promise of universal health insurance for all Tanzanians.

The journey will not be without challenges, but with bold reforms and the smart use of digital innovations Tanzania can build a healthcare system that is equitable, efficient, and resilient one that leaves no one behind.