In recent years, both theoretical and empirical research has been
accumulated in development economics regarding the household
behaviour in response to shocks in developing countries. Especially
the impact of weather-related shocks such as droughts/floods
and the efficiency of informal mechanisms to cope with these
shocks are explored in depth in the literature. In sharp
contrast, our knowledge on the economics of health shocks in lowincome
developing countries is rather limited. Few studies have
documented that low incomes and poor health insurance coverage
account for catastrophic medical expenditures in the event of a
health shock. The current study uses different Ghanaian household
survey datasets to examine the different coping mechanisms
employed by uninsured household to protect themselves from
incidence of health shocks. It explores the impact of formal health
insurance (the National Health Insurance Scheme (NHIS)) on
households out-of-pocket (OOP) spending and catastrophic health
expenditure.