1 Microinsurance as a tool to extend Social protection High potential of linkages Valérie Schmitt Diabaté ILO / STEP, october 2007

2 Linkages between SSS and CBSP (ISSA, AIM, ILO) sept Country reports (on linkages between “large” and CB SP institutions): –Argentina, Burundi, China, Colombia, Ghana, India, Laos, Philippines, Rwanda, Uruguay. Available on GIMI Experience in Senegal Linkages : empirical and conceptual work

3 What is a linkage? To extend SP, –various actors (State, SS institutions, CB schemes, MF networks, cooperatives, private insurance companies, HC providers …) –and various methods (social insurance, microinsurance, social assistance …) –none of these methods has emerged as a panacea Build strategies of extension that use respective advantages of these methods & actors, develop synergies –This is the basic idea behind the concept of linkage

4 5 types of linkages can be identified Financial linkages Operational / administrative linkages Governance linkages Linkages in the health service provision Policy planning linkages

5 Financial linkages Purpose: –Enhance the benefit package (and protection) –Cross subsidies between schemes, national solidarity –Equity (same basic package provided to the whole population) –Financial sustainability (joint pooling between schemes) Means: Mobilization of several sources of funding: –Contributions of the insured, employers (transporters), private sector (CSR) (ex: TATA in India, food-processing industry in Senegal), other schemes (cross-subsidies), State’s budget allocation, International solidarity (Global social trust) Ghana Colombia

6 Financial linkages Colombia’s subsidized health insurance scheme combines tax subsidies and the transfer of contributions from statutory schemes to stabilize the financing of health care for the poor and for vulnerable groups Assurance sociale Contributive scheme Subsidized scheme Employers & workers 15 millions insured persons Contributions = 12% salary Transfert of 1/12 of contributions = 24% of funding State 69% of funding 19,5 millions insured persons Couverture: 28% en 1992, 80% en 2007, objectif 100% en 2009 Subsidized scheme implemented in 1993 Financed and regulated by the State, management outsourced to mutuals, insurance co, cajas de compensación …

7 Financial linkages The GLOBAL SOCIAL TRUST Network –People in OECD countries, contribute on a voluntary basis a modest monthly amount (say 1 to 5 euro per month) to a GLOBAL SOCIAL TRUST –The trust invests these resources to build up basic social protection schemes in developing countries; and sponsors concrete benefits for a defined initial period until the basic social protection schemes become self-supporting A Global Social Trust project has been operational in Ghana –Funds are transferred from Luxembourg to provide a cash benefit supporting health check ups for indigent pregnant women and mothers with children under the age of five

8 Operational / administrative linkages Purpose: increased efficiency Means: 3 models 1 st model: A scheme with a 2 levels structure including –a centralized management capacity (with trained staff, IT systems, high quality procedures and tools) –Local based satellites or agencies that can facilitate some of the administrative processes (registration, collection of premiums, information …) Example: KaSAPI –In the Philippines community based organizations market voluntary membership in the statutory scheme, register workers and collect contributions on behalf of Philhealth, the statutory scheme It is also the case of the partner-agent model in India –I.e. an agreement between a private or public insurance company and a local organization that plays the role of an agent: Participates in the product design Sells insurance to the target population, collects premiums …

9 Operational / administrative linkages 2 nd model: Automatic affiliation of all members of an organized group (trade union, cooperative, etc.) to a scheme –The contributions can be deducted from the production sales or the taxes paid by workers  avoids having to collect premiums among the members ; some redistribution since contributions can be linked to sales figures –Coverage of a large percentage of population –Limited adverse selection –Expensive marketing campaigns avoided Example: –India (dairy cooperatives. Ex AMUL) –Senegal (transportation workers: affiliation per “garage”; the premium will be charged at each trip)

10 Operational / administrative linkages 3 rd model: Joint development and sharing of trained technical management teams or outsourcing of management functions Groups Trade unions Groups SCHEME M IMF IMC / TPA IMC / TPA: Claims settlement, Contracting with HC providers, or developt of a network of acredited HC providers, Monitoring & reporting Examples: Senegal, India Groups of farmers Federations SCHEME Scheme: Enrolment, Premium Collection, Sensitization, Fight against frauds, Moral hazard …

11 Governance linkages Purpose: participation of the members, transparency in the decision making Means : Important that large scale schemes planned in countries like Senegal or India keep the participatory nature of the Mutual health organizations Example: –In India, the Yeshasvini Co-operative Farmers Health Insurance Trust (a scheme with 2 millions farmers affiliated in 2007) is governed by a board of trustees; it allows representatives of both the government and the cooperative sector to attend its board meetings

12 Linkages in the health service provision Purpose: adequacy between HC supply and benefit package in terms of HC services available, quality level, price structure, procedures (cash less system, letters of agreements, etc.) Means: 2 models

13 CBSPHC Centralized structure HP RH NH MoH Federation CBSP Linkages in the health service provision CBSP External providers (ex: TPA) H H H H 1st model: India Context : private “unregulated” HC providers. CB schemes outsource the development of a network of accredited hospitals to professional structures (TPAs). 2 nd model: West Africa Context: structured network of public health care providers, poor quality and availability. Negotiation at the local level is not sufficient (CBSP/HC providers). Important to develop a national contracting policy at the national level (guidelines on the price structure, quality / availability …).

14 Policy planning linkages Purpose: provide a basic SP package to the whole population, avoid lack of coherence between schemes that can lead to differences in access to health care Means : important to develop linkages between operators (CBSP, HI, social partners, etc.) and policy makers to develop –adapted social protection extension strategies –adapted legal frameworks –appropriate guidelines for design and operation of SP schemes –… and in this way to create a coherent and equitable system of SP at the national level Examples: master plans in Cambodia and Lao PDR, Indian SS bill & guidelines based on the study of existing experiences, UEMOA project, SNPS in Senegal …