Can Health Microinsurance Protect The Poor?
IS MICROINSURANCE A GOOD DEAL FOR THE POOR? Despite significant commitment of funds into microinsurance pilots in recent years, little is known about what value microinsurance products actually deliver to their low income target clientele. In fact, the conceptual parameters of client value are still very much under debate. (Magnoni & Zimmerman, 2010, Matul, Tatin- Jaleran & Kelly, 2011). Even for health microinsurance, the most studied of any microinsurance product, fundamental questions remain about whether it protects low-income people financially.
A new report from Microfinance Opportunities (MFO) contributes to that debate by examining a client-managed health insurance model implemented by Uplift India Association. MFO focused on one specific component of client value, financial value, and examined whether and how Uplift provides financial value to its members. The MFO report took as its starting point the definition of financial value as articulated by Magnoni & Zimmerman (2010): the value that policyholders obtain when claims are made.
Using a combination of qualitative and quantitative analysis, MFO concluded that Uplift does in fact provide substantial value to its health microinsurance clients. This value is obtained through claims reimbursements and also for some through lower costs of care due to Uplift negotiated price concessions at participating hospitals. Based on its findings, MFO recommends an expanded definition for financial value: Financial value of health insurance is the degree to which membership in a health microinsurance program lowers the overall costs incurred due to ill health. This Brief describes how MFO reached that conclusion. It summarizes the features of the Uplift product, the methodology MFO employed to study Uplift's value, the findings from that analysis, and the implications of those findings for Uplift and for the microinsurance field.
