Micro health insurance: Health protection for the poor

Nandakumar Rajeshirke was doubtful of health insurance when he first heard about it three years back. He had trouble understanding the need and necessity of heath insurance.

But his health insurance provider, a network of NGO’s (Non governmental organizations called UpLift India Association) had earned his trust by funding his stone carving business in Pune city.

Mr. Nandakumar finally decided to buy health insurance for his whole family at 50 rupees per person annually. Moreover he renewed the plan for several years in a row.

In 2005, his gamble paid off, Nandakumar’s wife needed a hysterectomy, a surgery that would cost a minimum of 20,000 rupees (INR) ($444), which is approximately 30%of his yearly salary.

"Without health insurance," he says, "I would have had gone to financial ruins.

Micro health insurance is gathering momentum in Asia and Africa that lack public health facilities. These health programs aim to provide quality healthcare at low premiums thereby serving the poor community. The main idea is that, the poor should also benefit from the same protection against health risks as the rich.

India is a world leader in micro health insurance with 5 to 10 million people singed up for micro health insurance across India. Less than 10 percent of India's 1.1 billion people have any sort of health insurance, and mostly only government employees are covered.

Poor people who are either self employed or working in informal jobs are excluded in employment-related health insurance plans.

David Dror, a professor at Erasmus University Rotterdam who has been studying micro health insurance in India says that the poor in India were considered uninsurable for years together.

His research on micro health insurance shows that the poor in India could afford to pay only Rs500-Rs600 rupees per year for their family's premium. This amount is very low compared to the premium rates offered by health insurance companies in India.

The micro health insurance programs in India employ a number of methods to keep costs low. Some plans offer patients to seek care at government hospitals only, which are low in costs.

Volunteers from the community are asked to handle duties like processing claims to cut costs. In some cases the volunteer buys drugs or grows a garden full of herbal medicines to help the poor patients. Even small actions, such as making identity cards that cost half a rupee (1 cent) are taken seriously.

The more limited health insurance plans cover only hospitalization expenses, while better plans offer drug and outpatient benefits.

The ultimate motive is to ensure protection for the poor against health risks just as the rich .