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Health Microinsurance: An Inclusive Approach
November 21, 2016
By Gayle Gatchalian, Senior Associate, Knowledge and Communications
Unexpected illness is often the cause of many low-income households falling deeper into poverty. They often dip into meager savings, sell off assets, borrow from friends or family, or reach out to informal money lenders. If they have a business, they may decapitalize it to be able to pay for the expenses that often go beyond the obvious: our research with low-income households in various countries also reveals that there are certain “hidden” non-medical expenses associated with illness. These include loss of income, transportation, special food and bribes paid at the hospital. These expenses are significant and can amount to almost 70 percent of total treatment expenses.
Low-income women face additional barriers beyond cost. They have more difficulty accessing healthcare compared to men due to lower rates of literacy or less mobility. They also face additional health risks due to pregnancy and childbirth. Invariably across all countries, we have observed that women don’t prioritize their own health, putting the wellbeing of their children and their work first. When they feel unwell, they tend to ignore the symptoms, rely on home remedies or use over-the-counter drugs to control the symptoms. Only when the pain becomes unbearable do they seek medical treatment. They experience more aggravated health conditions as a result, leading to prolonged prolonged treatment and ultimately, a higher financial burden.
Health microinsurance provides a critical financial safety net for low-income families and prevents them from becoming vulnerable to the risks of health calamities. We launched our flagship microinsurance product Caregiver in 2006 with network member Microfund for Women. Since then, we have worked with our network members in Peru, Egypt, Morocco, Uganda and India to develop similar health insurance products that respond to the different health financing needs of their low-income clients, especially women. With support from Agence Française de Développement, we have documented our learnings and experiences launching Caregiver in these markets in a new publication launched at the 12th Microinsurance Conference in Colombo, Sri Lanka last week: “Health Microinsurance: An Inclusive Approach.” We outline our research-driven approach for developing inclusive microinsurance products, consumer education and distribution models. The publication also highlights some of the key questions institutions must ask to understand better understand their country context, target clients, their own strategy and capability as well as those of potential partner insurers. We also share guidelines for making the pilot successful and scale up, sustainable. We put special emphasis on the monitoring and evaluation aspect of the business and tracking of key performance indicators which are critical to achieving product sustainability. Case studies from our work in Jordan, Morocco, Uganda and Egypt capture some of the key learnings.
While we have exclusively introduced Caregiver with financial institutions thus far, this product can also be offered by non-financial institutions such as mobile network operators, non-government organizations, cooperatives, corporations, factories and the like. We look forward to introducing Caregiver to new markets with these diverse institutions and developing innovative distribution models using the new digital finance platforms to increase insurance penetration and maximize value for low-income women.
This project benefits from the Agence Française de Développement support. The analysis, views and opinions expressed are those of the author and do not necessarily reflect the position of the Agence Française de Développement.