Action Research on Micro Health Insurance for Poor Experience of DHAN Foundation, India

1. Action Research on Micro Health Insurance for PoorExperience of DHAN Foundation, India A Umarani Director Tata-Dhan Academy

2. Health and Poverty • Human capital is essential to keep the people engaged in productive works. Health is one of the aspects to build the human capital • Morbidity is high among the low income households leading to poverty • The low income households are highly vulnerable to health risks • Two major approaches to manage risks by the communities are risk reducing (prevention and avoidance) and risk coping (reduce the effect after the event)

3. DHAN’s model • Building Social capital (SHG-Federations) as the basis for poverty reduction • Development and risk & vulnerability management are the twin approaches adopted by the SHGs and their federations • SHGs and their federations provide access to services such as microfinance, micro insurance, healthcare and education and livelihoods development services

4. Risk and vulnerability management in DHAN promoted People Institutions Risk reduction strategies • Reproductive child and healthcare • Anaemia control programmes • Community health promotion through safe drinking water, sanitation and hygiene • Malaria control programmes • Nutrition programmes • Ensuring entitlements through Primary health centers • SUHAM (Sustainable Healthcare Advancement) hospitals – primary and secondary care • Federation clinics for primary care

5. Risk coping strategies • Risk retention – savings and credit services through self help groups • Risk transfer – most appropriate solution for uncertain health risks through micro insurance

6. People institution model of DHAN Federation 150-200 SHGs Cluster 1 15-20 SHGs Cluster 2 SHG 1 SHG 2 SHG 3 SHG 21 SHG 22 SHG 23

7. Subsidiaries of Federation Hospital Vocational Institute Federation Producer Company Mutuals

8. Subsidiaries of Federation • The SHG federation acts as an development agency • In addition to promotion of Microfinance for poverty reduction, the federation also takes up other development programmes like health, education, business promotion etc, based on the need of the Kalanjiam members • Exclusive subsidiaries are promoted as separate institutions for each of the development programmes

9. Hospital • One of the subsidiaries of Kalanjiam Federation • Exclusive governance structure with inter linkage with Federation’s. • Provides primary care • Identifies referral hospitals for secondary and tertiary care

10. Federation Mutuals • It is one of the subsidiaries of federation for providing mutual based solutions to the risks of members; Owned and controlled by the members • Adopts three approaches to promote Micro insurance among the members • Through partnership with other insurance companies • Offers mutual based own solutions • Combination of both

11. People Mutuals Federation 1 Federation 2 People Mutuals Federation 3 Federation 4

12. People Mutuals • Institution promoted by SHG federations • Separate entity (Trust) to implement the insurance programme for the members of DHAN promoted People Institutions • Promoted through collaboration between Oxfam Novib, Rabobank Foundation and Eureko Re, The Netherlands

13. Micro Health Insurance - Models • Partner-agent model • Combination of partner-agent and mutual model

14. Partner Agent Model: Universal Health Insurance Scheme • Central Government sponsored Scheme • Implemented by all the four public sector general insurance companies • DHAN collaborates with National Insurance Company • Universal- includes all economic category-2/3 of premium is subsidized by the government for poor; covers preexisting illness also

16. Combination of Mutual and Partner Agent model • Mutual solutions are offered in addition to the partner agent model • Mutual solutions are offered only where there are community owned hospitals are established • Federations act as nodal agency and People Mutuals is the risk carrier

18. Premium structure for UHIS+Mutuals

19. Health Insurance Back up insurance premium Insurance Companies Federation Mutuals (Nodal agency) Member ID Card Premium& Member info Claim pay out Third Party Administrator Mutual insurance premium Kalanjiam Claim pay out Premium& Member info SUHAM/Federation Hospital Member People Mutuals (Mutual Insurer) Claim pay out

20. Insurance Literacy • Members • As consumers • As owners 2. Governing Board of Federation Mutuals 3. Management staff of Federation Mutuals 4. Field level staff

21. Consumer Education: Before selecting a solution/product • Consultative workshops for selecting a product/ designing a mutual solution • Risks and vulnerabilities faced by the members • Current coping mechanisms- their pros and cons • Need for a special strategy for managing uncertainties- importance of insurance • Difference between banking and insurance • Group and personal insurance schemes- Pros and cons from the perspective of consumer • Various group insurance schemes and their benefits and limitations • Selection of a particular programme from existing schemes or devising mutual solutions or a combination of both

22. Consumer Education : After selecting a solution/product • This is done for promotion of a particular product • Features/components of the solution and reasons • Insurable and non insurable risks • Entry procedures • Claim settlement • FAQs

23. Literacy: Members as owners • Enrollment procedures • Selection and anti selection • Claim servicing procedure • Orientation on financial management of Mutual programme • Need for Reinsurance/ Back up insurance

24. Literacy: Governing Board of Federation Mutuals • Enrollment procedure • Selection and anti selection • Underwriting procedure • Claim settlement procedure • Financial management for mutual health programme • Roles and responsibilities of Mutuals committee

25. Literacy: Management Staff of Federation Mutuals In addition to all the above, • Models of micro insurance delivery- Corporate agency and Mutual solutions • Accounting and auditing • Management Information system • Financial planning • Insurance literacy to members and field staff

26. Literacy: Field staffs • Basics of insurance and mutual solutions • Details of the specific solution/programme of the federation (features with reasons, exclusions) • Insurance literacy to members • Collecting the data • Enrollment and renewal procedures • Usage of MIS • Claim settling procedure

27. Institutions for providing literacy • Federation Mutuals • Dhan People Academy • HRD of DHAN • Advanced Center for Skill and Knowledge for Mutual Insurance (ASKMI)of Tata-Dhan Academy • People Mutuals

28. Reach (As on March 2012)

29. Collaboration with Achmea Re Foundation • Promotional support for 45 federation mutuals for three years • Philanthropic reinsurance support at the end of third year • Technical mission team from EAF provides technical assistance

30. Prepositions for successful health insurance for poor • Health insurance is viable only when it is built upon micro finance initiatives • Social capital • Scale advantage which avoids adverse selection • Community based health care services to avoid moral hazard • Micro health insurance should focus on inclusion of primary health care and other health care related expenses, all diseases and all family members • Packaging of benefits by improving the product should ensure good and repeat enrolment • Pricing in Health insurance should ensure a right balance between viability and affordability • The reduction in health risks leads to improvement in human capital

31. Thank you