Objectives
The purpose of the study is to quantitatively analyze the role of health insurance in the determinants of catastrophic health payments in a low-income country setting.

Methods
The study uses the most recent publicly available household level data from Zambia collected in 1998 containing detailed information on health care utilization and spending and on other key individual, household, and community factors. An econometric model is estimated by means of multivariate regression.

Results
The main results are counterintuitive in that health insurance is not found to provide financial protection against the risk of catastrophic payments; indeed, insurance is found to increase this risk.

Conclusions
Reasons for the findings are discussed using additional available information focusing on the amount of care per illness episode and the type of care provided. The key conclusion is that the true impact of health insurance is an empirical issue depending on several key context factors, including quality assurance and service provision oversight.