Community-based health insurance

The economic security of households in India is threatened due to health shocks as most opt for private health care that they can ill-afford. Particularly in rural India, there is a heavy reliance on high-interest debt financing to pay off healthcare bills. Affordable health insurance premiums could help mitigate this situation. Micro-health insurance experiments were conducted in India under the aegis of the EU-funded project 'Developing efficient and responsive community based micro health insurance in India' (CBHI INDIA) to provide more equitable healthcare access and financial protection.

The Kanpur Dehat and Pratapgarh districts in Uttar Pradesh and Vaishali in Bihar were the study sites chosen on the basis of least education, dense population and largest gender disparities. The target groups were involved in designing the insurance and the benefit packages. The enrolment rates during the first and the second waves were 23% and 24% respectively. No association was found between socioeconomic status and gender on CBHI enrolment. Women with more education were more likely to enrol and those who made insurance claims or were well-informed about CBHI were more likely to renew.

Overall, results showed no impact on either enhancing access to healthcare or reducing their related expenditure. Site specific estimates showed no discernible impact in Kanpur Dehat and Vaishali for either utilization or healthcare expenditures. In Pratapgarh however, we found CBHI membership led to a decline in utilization of outpatient care. The most likely explanation is that the provider-payment system, which pays designated healthcare professional a fixed annual fee, incentivises the reduction in the quality of care offered and/or to charge more for services and drugs as compared to the uninsured who pay per visit. Overall, analysis suggests that these CBHI schemes were not functioning as anticipated. This is reflected by the dropout rates: only 17% of individuals who enrolled in 2011 renewed their membership a year later.

Though CBHI scheme outcomes were disappointing, developing insurance schemes that are adapted to meet local needs would be successful with some adjustments. Greater attention needs to be paid to the management aspects: both financial and administrative. Community funded schemes such as the CBHI by design offer a shallow risk pool, resulting in the insured and service providers to be inadequately incentivised to move the scheme forward. Monitoring aspects of the scheme need to be considerably strengthened to promote good governance and accountability of the healthcare service providers.