Social Protection for the Informal Sector… …A Local Infrastructure.

Looking for the opportunities for an inclusive social security system in the current Indian situation… 1 Billion people without social protection Only 100 millions people have some kind of social protection 94% of the total labour force is part of the informal economy sector Small/micro businesses, Rural agriculture, 92% two years ago. GoI has money for financing social protection , is interested in equitable basis, wants a certain visibility of the action. Gvt Health Expenditures to evolve from 1% to 3% of GDP Co financing strategies per product or for BPL. NGOs, MFIs, SHG Federations, Cooperatives, Trade unions, Gram panchayats are the only organizations reaching the informal sector. Only 10 million people have access today to some social protection through such entities Free insurance market, innovative microinsurance, lack of information balance

Challenges How to bring social protection to the informal sector through an inclusive mechanism? How to ensure an effective risk management system that involves developing local ownership and responsibility? How to build communities management capacities or resilience when facing micro or macro risks? How to finance a social protection sustainably even in the health domain?

Risks Health, Lifecycle Accidents, Death, Monsoon failure, Fires, Floods Frequency Epidemic, Riots, Floods, Landslide Tsunamis, Earthquakes, Cats Ask participants to group and to do an inventory of health problems that occurred in their lives in the past year. Simple Medium Complex and Expensive Ask them to count the population. Costs

Risks and mitigation strategies Education, Information, Prevention Savings Assets accumulation, small pooling Frequency Insurance Local Pool ReInsurance, Big Pooling Ask participants to group and to do an inventory of health problems that occurred in their lives in the past year. Simple Medium Complex and Expensive Ask them to count the population. Costs Costs

The basic social security product for basic rights Individual benefits requiring a whole group solidarity Solidarity sustainability requiring individual responsibility

Indian CHALLENGE: Setting up a sustainable social security system in a context of free and competitive insurance market

Social Security Markets logics between responsibility and solidarity Profit Logic Tough not to exclude Tough to sustain financially Social Logic

Which entity to enroll while respecting individual freedom and social inclusion? Which group type includes a sample of the whole age pyramid of the population? Which group of individual may decide to contribute together and get it done? Which group size can control its individuals when they have a claim ? Which group type may be able to consider social security as another type of infrastructure to be handled with a subsidiarity Principle?

From Self Help Group to Village Social Security Fund: Exploring the analogy from finance to insurance Inclusive risk management Ownership Small size and subsidiarity Governance responsibility Solidarity building

Subsidiarity principle VSSF Subsidiarity principle Agregator VSSF Insurer VSSF Agregator VSSF How to manage the risks before. Everybody wants drugs because they often spend on it. How to reduce the bill? Is it insurance? Costs Frequency

VSSF is the decision point & offers various solutions

Enrolment Strategy

Health Products choice 1: Village Mutual + high insured layer 2: Insurance only Everybody or Nobody, No exclusion, no age limit, Pre existing diseases covered Co financing from government for the BPL Various quality of service for various contributions under study.

Model Operations Highlights 1-Village Security Fund En-bloc Enrolment 7- Social Protection Service Provider 6- Risk Bearer / TPA 2- Implementing Organization 3- Federal Organization Social Security Fund 3- Federal Organization Social Security Fund 4- Co financing Partners

Model Organizational Highlights Coordinates Resources 2- Collecting/Servicing Field Agents Choose, elect and Mandate 3- Representative to Federal Security fund Joins and Mandates Tender and Contract 3- Federal Social Security Fund Representatives 1-Village Social Security Fund Consolidates, request co-contributions 6- Risk Bearer 7- Social Protection Service Provider 4- Co financing Partners

Public Private People Partnership 4- Co financing Partners Choose, contract, control at their level 2- Collecting/Servicing Agents (NGOs, MFIs..) 3- Federal Organization Representatives 6- Risk Bearers (Insurer…) Transparency, Audits, profit sharing 7- Social Protection Service Provider (hospitals…) 1- Communities

SWOT

Roles… Participation, Solidarity, Health risk Governance, Administration services, Negotiation with HCP Policy Advocacy, Data Consolidation Negotiation framework, negotiation with insurers toolbox sharing, Contribution, claim Control, Communication, negotiation with HCP Data Consolidation Negotiation framework, negotiation with insurers training, reporting,

Contact GTZ HSS New Delhi B5/1 Safdarjung Enclave +91 11 4603 6677 FX Hay: fxavierh@gmail.com Nishant Jain: nishant.jain@gtz.de