MR Microinsurance_2012_03_29.indd - International Labour ...

Innovations and barriers in health microinsurance
involving potential clients. Furthermore, low-income individuals require flexible
payment arrangements to help them finance premiums.
5.4.2 Improved supply: Products and processes
Currently, universal health care is out of reach for many countries. Marketbased
solutions are not reaching scale and may not meet all needs due to
exclusions of populations, limitations of coverage, and constraints on the
infrastructure and distribution of healthcare providers in many geographical
areas. These factors leave the poor without reliable access to necessary health
services or dependable financial risk management solutions. As discussed in
this chapter, numerous challenges are restricting HMI programmes’ ability to
supply valuable products, and overcoming these challenges will require careful,
multi-pronged intervention.
Private-sector activity, by commercial insurers in particular, has been
limited to date partly because of the perceived complexity of designing and
administering comprehensive (e.g. outpatient and in-patient) products. Context-specific
solutions must be sought, using carefully constructed benefit
packages. Until products are developed that meet client demand while remaining
financially viable, a scale adequate for risk-pooling will not be attained.
Furthermore, many HMI programmes lack sufficient financial support due to
investor concerns about reaching scale, and, ironically, struggle to reach scale
due to this same lack of financial support. Additional obstacles to scale include
inadequate health infrastructure and insufficient data and technical expertise,
highlighting the need for more market research and capacity-building
assistance.
Since HMI is characterized by frequent transactions and small margins,
efficient claims and policy administration processes are essential to success. Thus
far, experience with third-party arrangements has not been satisfactory (see Box
20.5), and more innovation is needed in obtaining and implementing third-party
support. Appropriate pricing, reinsurance cover and fraud controls also require
significant attention and investment, particularly for community-based programmes.
Though commercial insurers may have a better grasp of these
insurance concepts, they lack an understanding of how to best reach the lowincome
market. Furthermore, HMI programmes face these challenges in
environments that often lack stable political systems and supportive regulatory
treatment of HMI programmes.
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