Action Research on Micro Health
Insurance for Poor
Experience of DHAN Foundation, India
A Umarani
Director
Tata-Dhan Academy
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)
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
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
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
People institution model of DHAN
Federation
150-200 SHGs
Cluster
1
15-20 SHGs
SHG 1
DHAN Foundation
SHG 2
Cluster
2
SHG 3
SHG 21
SHG 22
SHG 23
Subsidiaries of Federation
Vocational
Institute
Hospital
Federation
Producer
Company
DHAN Foundation
Mutuals
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
DHAN Foundation
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
DHAN Foundation
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
1. Through partnership with other insurance companies
2. Offers mutual based own solutions
3. Combination of both
DHAN Foundation
People Mutuals
Federation 1
Federation 2
People
Mutuals
Federation 3
DHAN Foundation
Federation 4
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
DHAN Foundation
Micro Health Insurance - Models
• Partner-agent model
• Combination of partner-agent and mutual model
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
Particulars
Section I
Section 2
Section 3
Wage loss
Life insurance compensation for
coverage for
the head of the
Hospitalisation benefits upto a maximum of USD 600
accidental
family of USD 1
i. Benefits (Rs.30000) in a year with a ceiling of (Rs.15000) USD
death of head of (Rs.50) per day
300 per illness
the family : USD for 15 days from
500 (Rs.25000) the 4th day of
hospitalisation
1.Intentional
1.Any disease during the first 30 days from the
self injury,
commencement date of policy
suicide or
2. Maternity expenses in the first year
attempt to
3. Cost of spectacles, contact lenses and hearing aids suicide.
not payable. Any Dental Treatment or Surgery, internal 2.Under the
ii.
self injury and use of intoxicating drugs / alcohol,
influence of
Exclusions sterility, Venereal Disease not covered. Vitamin and
intoxication,
tonics unless forming part of treatment of injury / illness liquor or drugs
are not covered. Treatments arising from or traceable to 3.If the insured
pregnancy, child birth, miscarriage, abortion or
committing any
complication of any of these including caesarean
breach of law
section are not covered.
with criminal
intent
1. Notice about the admission in the hospital should be immediately informed to Good
iii.
Health Plan Limited (GHPL), the Third Party Administrator for National Insurance Company.
Procedure 2.The claim form along with the bills should be sent to GHPL within 7 days of discharge
to claim the from the hospital
benefits 3. GHPL would process and pay the eligible claims within 15 days to SUHAM/ Federation
clinics.
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
Mutual health Insurance Program features
i. Benefits :
1. Primary health care cover upto USD 60 (Rs.3000) with 25% copayment by the insured
2. Hospitalisation expenses upto a maximum of USD 100 (Rs.5000)
ii. Exclusions :
Chronic / pre - existing illnesses primary health care cost
iii. Procedure to claim the benefits:
Primary health care claims upto USD 60 (Rs.3000) per family in a year:
The insured avail the benefits on the spot and they pay only 25% of the treatment cost to the federation
clinics/SUHAM hospitals. The clinics / SUHAM Hospitals would claim the benefits as detailed below:
a) The authorised bills from SUHAM/Federation clinics should be submitted to People Mutuals on a weekly basis
b) People Mutuals would process and pay the eligible claims within 15 days to SUHAM/ Federation clinics.
Secondary care claims upto USD 100 (Rs.5000) per family in a
year:
a) The claim form along with the bills should be sent to People Mutuals within 7 days of discharge from the hospital
b) People Mutuals would process and pay the eligible claims within 15 days to SUHAM/ Federation clinics.
Premium structure for UHIS+Mutuals
Mutual
Total
insurance risk
Premium for Admin cost
Family type Premium paid
premium to
NIC-UHIS of federation
by the insured
People
Mutuals
Single
375
100
25
250
Family of
five
500
150
25
325
Family of
seven
600
200
25
375
Health Insurance
Federation Mutuals
(Nodal agency)
Back up insurance premium
Insurance
Companies
Claim
pay out
Premium&
Member info
Third Party
Administrator
Kalanjiam
Premium&
Member info
Member
SUHAM/Federation
Hospital
Claim
pay out
People
Mutuals
(Mutual Insurer)
Insurance Literacy
1. Members
• As consumers
• As owners
2. Governing Board of Federation Mutuals
3. Management staff of Federation Mutuals
4. Field level staff
DHAN Foundation
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 uncertaintiesimportance 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
DHAN Foundation
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
DHAN Foundation
Literacy: Members as owners
1.
2.
3.
4.
Enrollment procedures
Selection and anti selection
Claim servicing procedure
Orientation on financial management of
Mutual programme
5. Need for Reinsurance/ Back up insurance
DHAN Foundation
Literacy: Governing Board of Federation
Mutuals
1.
2.
3.
4.
5.
Enrollment procedure
Selection and anti selection
Underwriting procedure
Claim settlement procedure
Financial management for mutual health
programme
6. Roles and responsibilities of Mutuals committee
DHAN Foundation
Literacy: Management Staff of Federation
Mutuals
In addition to all the above,
1. Models of micro insurance deliveryCorporate agency and Mutual solutions
2. Accounting and auditing
3. Management Information system
4. Financial planning
5. Insurance literacy to members and field staff
DHAN Foundation
Literacy: Field staffs
1. Basics of insurance and mutual solutions
2. Details of the specific solution/programme of the
federation (features with reasons, exclusions)
3. Insurance literacy to members
4. Collecting the data
5. Enrollment and renewal procedures
6. Usage of MIS
7. Claim settling procedure
DHAN Foundation
Institutions for providing literacy
1. Federation Mutuals
2. Dhan People Academy
3. HRD of DHAN
4. Advanced Center for Skill and Knowledge for
Mutual Insurance (ASKMI)of Tata-Dhan
Academy
5. People Mutuals
DHAN Foundation
Reach
Members
enrolled
1,78,081
(As on March 2012)
Premium
(in USD.)
542,971
Claims (in USD.)
455,924
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
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
Thank you