MR Microinsurance_2012_03_29.indd - International Labour ...

322 Insurance and the low-income market
(Uplift), by NGOs in partnership with insurers (PWDS, VimoSEWA), by an
insurance company in collaboration with the Ministry of Textiles (ICICI Lombard),
by a state Government in collaboration with cooperatives (Yeshasvini),
and by the Government with various private insurers (RSBY). 5 The RSBY and
weavers’ schemes are subsidized and the latter is the only one offering full outpatient
cover. It may seem unfair to compare subsidized schemes to market-priced
ones, but those comparisons make sense from the clients’ perspective, which is
the essence of the PACE assessment. The products serve similar target groups,
but are sold in different locations (with the exception of RSBY, which has been
rolled out across India).
The government-sponsored schemes score similarly to their Kenyan counterpart
NHIF (see Figure 15.5). Although they can provide better products at a lower
cost due to subsidies, as large-scale schemes they underperform on both access
and experience dimensions. For RSBY, access is limited to the population below
the poverty line (BPL) as identified by the ration card. More importantly, enrolment
numbers are suppressed by the fact that enrolment is often done within a
specific window of time and all family members need to be present in person.
Limited information provided to the public and limited effort to educate members
are likely explanations for low usage rates. In the case of ICICI Lombard,
access to its scheme is constrained by limited member education for a relatively
complex product. Low usage rates may suggest inadequate claims procedures,
but an emerging “cashless” system should improve service quality in the near
future. The Government of India and the insurers involved are investing
resources to make the RSBY and other government-sponsored schemes work for
low-income populations.
Improvements in the access and experience dimensions might make it difficult
for market-priced schemes to compete with RSBY and other government
schemes, at least for the poorest clients. Some households are currently still
enrolled in RSBY and other health microinsurance plans, but it seems that
schemes will in future align themselves with RSBY and reposition their products.
Organizations like Uplift, VimoSEWA and PWDS can improve access to RSBY
and make sure that their members benefit from the government system.
5 Various public and private insurers deliver RSBY; premiums vary slightly, but the product design and
core processes remain the same. For the PACE analysis, the RSBY delivered in collaboration with
ICICI Lombard is taken as a reference. For more information on RSBY and health microinsurance in
India, see Chapter 20, section 20.2.4.