Thematic file

MICRO–HEALTH INSURANCE

Breaking out of the disease/poverty vicious circle in developing countries


Despite progress in recent years, weak health systems in some countries make access to basic healthcare extremely difficult for the poorest communities, and prevent them from escaping from the poverty trap.

For these particularly vulnerable populations, disease is a huge risk, almost always resulting in financial distress due to medical expenses and the loss of daily wages. In very fragile or non-existent healthcare and health insurance systems, nearly all of the household income is likely to be swallowed up when someone in the family falls ill



To break this vicious circle of poverty compounded by disease, the Sanofi Espoir Foundation is supporting the implementation of participatory mutual insurance schemes that provide health coverage to very low-income families living below the poverty line. It has one a clear objective: empowering the most disadvantaged communities to improve their living conditions by themselves.

How do micro-health insurance schemes work?

Micro-insurance is intended for people in the informal sector who are excluded from traditional insurance markets. It helps them secure their incomes by giving them access to efficient social protection services. The key principles behind it are solidarity and democratic participation.

Resources are pooled so that everyone enjoys the same services in case of illness for the same level of contribution. In Madagascar, for example, the scheme established by Inter Aide is now mandatory for micro-entrepreneurs needing a loan.

For some €6 per family a year, their mutual scheme takes charge of their healthcare costs of up to € 2,000. Unlike conventional insurance, the amount contributed is not based on a subscriber’s age, gender or state of health.

They primarily provide financial protection as there is no social security system in countries where we operate.

Anne-Claire Hay Head of Inter Aids Micro-insurance sector

What services do they provide?

"They primarily provide financial protection as there is no social security system in countries where we operate,” says Anne- Claire Hay, Head of the Inter Aide micro-insurance sector. “We target micro-entrepreneurs living in precarious conditions.

Contracting a disease may force them to sell their work tools or borrow heavily." Insurance products will vary from one country to another. Each mutual scheme must consider three factors: health needs, the existing healthcare supply, and the contribution potential of its members.

The idea is to remove financial and where possible geographical barriers so as to facilitate access to care for craftsmen in major cities in India or Madagascar, cotton growers in Chad, or rice and palm oil farmers in Forested Guinea.

  • In Africa, micro-mutual schemes supported by the International Center for Development and Research (CIDR) generally support basic healthcare: free medical check-ups, prenatal and postnatal consultations, vaccinations, family planning, and health education. These services are provided in stations or health centers as the community’s first point of contact with health systems.
  • In India, where there is virtually no public health service, health expenditure is a major cause of household debt. The majority of the population turns for want of something better to resellers, charlatans and illegal pharmacies. To remedy this, Inter Aide has set up five mutual schemes that protect more than 60,000 people today in the districts of Mumbai and Pune. In addition to reimbursing hospital costs due to their high cost , the mutual scheme provides a 24/7 hotline for its members to access a network of 300 carefully selected healthcare partners that provide suitable care solutions for controlled and negotiated rates.

Difficulties

Each mutual scheme must rely on a network to ensure a good level of expertise, mobilization, and human and financial investment. But these conditions cannot always be met. Practitioners sometimes have questionable skills, and some charge prohibitive rates; there are also shortages of medicines, and healthcare can be of variable quality.

"The challenge involves stopping abuse by developing strong and lasting partnerships with local health authorities to ensure a quality offer at an affordable cost for all," said Dr. Bruno Galland, advisor on mutual health insurance scheme for Africa at the CIDR.

Another difficulty lies in how people understand the scheme. Unlike micro- credit schemes, the benefits of micro-insurance schemes are not immediately measurable and families do not see the up-front value of insurance. To address these issues, mutual schemes have set up awareness campaigns using new communication tools such as films, cartoons, posters and games, and multiplied the amount of training for health facilitators.

Today, about 250,000 people benefit from them. And they help to boost the provision of care and regulate health practices

Dr Bruno Galland Advisor on mutual health insurance scheme for Africa at the CIDR

How things stand today

"These mutual schemes are still fairly marginal in Africa but they are the only facility for offering micro-insurance to informal sector families with annual incomes that rarely exceed €1,000,” says Dr. Galland. Today, about 250,000 people benefit from them - 10% of all insured people.

And as was recently shown in a study by the University of Montreal, they help to boost the provision of care and regulate health practices. "In India, where we have been working for 10 years, the retention rate for subscribers is now 74%,” adds Anne-Claire Hay. “Micro-insurance not only allows families to get better faster, but also makes for substantial savings. In Madagascar, for example , the average amount of an insurance compensation is equivalent to one month's salary!"

 

Key figures

  • 300 health professionals (hospitals, physicians, diagnostic laboratories, and pharmacies) now form part of the Uplift network in Mumbai and Pune (India). For members, the rates are 20 to 50% lower.
  • 63 % of members use Uplift’s health services in India.
  • 1 month salary: the average compensation rate for micro-insurance schemes set up by Inter AIDEA Madagascar
  • €1.5 to 6.5 / year: the price of micro- insurance in the 10 African countries where the network is gradually being implemented.