Financing Micro Health Insurance: Theory, Methods and Evidence

Healthcare for all at affordable prices is still a major but universally elusive goal. Everyone spends money on healthcare, and it is the most impoverishing consumption item. Thus, most governments (and the United Nations) promote Universal Health Coverage — each country's unique blend of tools for healthcare financing, including taxes, subsidies and market controls.

Most people in low- and middle-income countries (LMICs) have no health insurance of any kind. And most LMIC governments lack the political will, information, or resources to require their citizens to buy health insurance themselves or to subsidize insurance for all who cannot afford the price. This book deals with financing voluntary and contributory health insurance for resource-poor and rural groups in LMICs.

This book addresses three issues. The first is how to catalyse demand for health insurance and develop insurance literacy among the largely illiterate and innumerate target population, using training programs to build an enabling consensus, allowing locals to create and administer such schemes. The second involves the process of developing simplified methods for risk assessment, which can help to underwrite risks, price the micro health insurance schemes, and ensure proper implementation. The third issue is formulating a compelling business case which would make this health insurance affordable, financially sustainable, and operationally scalable.

This book develops insurance education and financial literacy for students of economics, business administration, insurance, development studies, and social work to prepare them for practical work as implementers, policymakers, or evaluators. A supplementary section for teachers and students includes comprehension questions.

Readership: Students of economics, business administration, insurance, development studies, and social work, policymakers, and implementers of micro health insurance.

Dr David M Dror is an acclaimed international expert in microinsurance with over 35 years' experience in social protection and health financing. He served as Senior Social Security Specialist for the International Labour Organization (UN-ILO) from 1982 to 2003, advising on social and health insurance systems worldwide. Dr Dror has been Hon. Professor of Health Insurance at Erasmus University Rotterdam (2004–2014). He has been working in India since 2005 and has professional experience in numerous countries across Asia and Africa, including Bangladesh, Nepal, Philippines, Rwanda, South Africa, and Vietnam.

In 2007, he established the Micro Insurance Academy (MIA) in New Delhi. Under his direction, MIA has conducted research into key pain-points of catalyzing demand for microinsurance, providing technical assistance toward implementation of microinsurance projects in the informal economy in India (multiple states), Nepal, Tanzania and Vietnam, covering several risk categories — health, crop, livestock and climate change. MIA also provides insurance education, as well as consultancy services in microinsurance.

Dr Dror was named "Personality of the Year" in 2009 by the Asia Insurance Industry for "groundbreaking research and study which has helped boost understanding of how the world's poorest communities can benefit from microinsurance". In 2011 and in 2014, he received the Global Citizen Lifetime Achievement "Karmaveer Puraskaar" Award for Social Justice and Citizen Action, from the Indian Confederation of NGOs. Dr Dror holds a PhD (Summa cum Laude) from Université Claude Bernard Lyon 1, France, and DBA (Magna cum Laude) in International Health Services. He has published over 90 peer-reviewed publications. His paper "Climate Cost of Cultivation: A method to quantify the added cost to farmers of climate-change, illustrated in rural India" (co-authored with Jangle N and Mehra M in 2016) was awarded Best Paper by the 20th Asian Actuarial Conference (November 2016, Gurgaon, India).