Universal coverage for medical care is a topic of much discussion, in both developing and developed nations, including the United States. But in the US, a large portion – albeit not all – of the population has medical insurance. Some are covered through government programs for the poor or low-income and have to make very limited payments, others are covered under their employers but are responsible for a portion of the premium and copayments, and the rest are covered through private insurance where they pay the entire premium and any copayments. However, the majority of the populations in developing countries cannot afford the payments that Americans make towards healthcare – not that all Americans can afford it either, but we will leave that discussion for another day.
A few decades ago, user fees were implemented in many developing countries in order to generate revenue for the health sector, increase efficacy of health services by redirecting patients to cost-effective services, and improve access to health care for disadvantaged people by using revenues from urban services to subsidize rural areas. This, however, has not worked as originally intended. According to Yates (2009), the result was that the poor were not able to access health services when needed due to the high fees, which were compounded by missed work and travel expenses. Additionally, due to the high administrative costs and the failure of fees to direct patients to less costly services, little revenue has been generated with which to enhance and subsidize services.
Now, the trend is moving towards the removal of user fees. However, if user fees are removed, an alternative mechanism with which to finance health services needs to be implemented. BRAC has implemented a tiered scale of micro-health insurance in Bangladesh that seems promising.
- The General Package: In return for paying an annual premium, which is determined by family size and membership in the BRAC microfinance program, policyholders can access services at BRAC health centers by paying an additional copayment for each visit. Policyholders are offered the subsidized services of doctor consultation, free annual exam, pathology testing, discounted medications, and pregnancy delivery.
- Equity Package: In order to further subsidize health services for those who are extremely poor and vulnerable, BRAC introduced the Equity package, where premiums are paid by the non-members of the BRAC microfinance program (theses members are charged a slightly higher premium compared to members). This package includes free consultations, routine pathological testing, annual exams with essential diagnostic testing, discounts of up to 80% on essential medications, follow-up home visits, free transport to hospitals and subsidies upon referral to a hospital.
- Prepaid Pregnancy Related Care Package: This package is offered to pregnant women following the payment of a premium, except for those who are “ultra-poor”, where it is free. Policyholders can access monthly antenatal exams, a monthly supply of iron and folic acid supplementations, tetanus immunization, a safe delivery kit, discounted delivery at BRAC health centers, a post-natal home visit, and a subsidy for treatment of complications upon referral to a hospital.
- School Health Package: For an annual premium, students can access annual exams, biannual immunizations against common intestinal worms, free iron supplements for girls, and a 10% discount on pathological testing.2,3
This micro-insurance model has only been implemented as a pilot and may take several years to demonstrate benefit and sustainability. Additionally, there is limited data to demonstrate its effect on poverty level as related to decreased health care expenditures.4That being said, it seems worth further investigation into how other organizations can take a lead from this model in order to implement a micro-insurance program in their respective countries. One of the important aspects that BRAC considered was further subsidizing fees for the extremely poor. Without doing this, as Yates would say, the inequalities between the wealthy and the indigent would be further amplified, a fact that causes much concern, given that the extremely poor are the ones who are more vulnerable and need access to health services the most.
1. Yates, R. (June 2009). Universal health care and the removal of user fees. Lancet.373: 2078-2081.
2. Hogarth, R. (April 2009). Microcapital Story: BRAC provides micro health insurance in Bangladesh – lessons in financial viability (Part II of IV). Accessed 11/4/11 from http://www.microcapital.org/microcapital-story-brac-provides-micro-health-insurance-in-bangladesh-lessons-in-financial-viability/
3. Matin, I., Imam, N., and Ahmed, S.M. (Dec 2005). Micro health insurance (MHI) pilot of BRAC: a demand side study. BRAC Research Report. BRAC Research and Evaluation Division.
4. Hamid, S.A., Roberts, J.and Mosley, P. (2010) Can micro health insurance reduce poverty? Evidence from Bangladesh. Journal of Risk and Insurance, 78(1): 57-82.