Pricing Micro Health Insurance Products Healing Fields Foundation

Introduction Relevance to Health Micro insurance Full Service model Primarily MFIs as partners –Limited membership size –Field level staff of NGO partners Activity based costing

Lessons! Full service model for Health Insurance –More complex than life & accident cover Demand creation is a huge expense! Research on Pricing: Critical success factor! –Examine stakeholder linkages, for integration –Potential innovation

Lessons! Difficulty in finding potential NGO partners –Lengthy timelines –Top executive involvement –Prefer voluntary enrollment –Competing products with unclear messages leading to confusion Education on HI and health needed for better results Demand for composite plans

Lessons!

Mapping Costs

Lesson from UMASIDA - Tanzania “In the beginning the premium was Tshs 600/= (US$1) per month covering my father, mother, my wife and two of my children. This, I think, was fair enough. Suddenly, without much explanation, the premium shot up to 1,000/= (US$1.45). At that point, most members stopped paying and the doctor stopped providing services. Many people later resumed. Then suddenly the premium increased to 2,100/= (US$2.63). This was annoying for it was done without much explanation. I dropped out at that point. I think the premium should be at 1,000/= because we are poor people who the donors are trying to help.”

Lessons Pricing: Way to go! –Research community (willing to pay between per year) –Outline service and product needs –Integrate and Innovate! –Map all direct/indirect costs –Premium financing (SHG member monthly savings is < Rs. 30/-)

Healing Fields Foundation’s Experience

Ecosystem Healing Fields Foundation ecosystem –Insurer: HDFC Chubb –Health care providers and –Self Help Groups (SHGs) managed by NGOs 15 NGO Partners 18 networked hospitals. 13,000 lives (2600 families) during pilot

Benefit Package Members pay 363/- per annum to cover a family of five. Rs 285 for Health Insurance Rs 35 for Personal Accident Benefit Rs 33 for Service Tax to GOI Rs 10 to Healing Fields as registration fee 20,000 hospitalization cover for a family of five. Includes, Pregnancy cover Coverage for listed 43 illnesses only, governed by DRG 25% co-payment by patient Wage compensation for a maximum of 15 days per year at Rs 50/- per day.

Benefit Package Personal Accident Coverage 25,000 each on insured member & spouse On death of member Rs 5000 to each school going child towards education and Rs 5000 to each unmarried girl child towards marriage Hospitalization With listed, rated network providers Cashless admission Availability of Healing Fields Hospital Facilitator/ Case Manager Second medical opinion by Healing Fields, doctors OP discounts (25% - 100%)

Learning Utilization: Expected Loss ratio: 56% Expected Hospitalization utilization: 3% Expected OP utilization: 40% Average claim settlement days: working days

Conclusions An effective and viable health insurance model is the holistic Full service. A great product with poor delivery mechanism is as good as not having a product at all. For insurance companies to become involved in micro insurance there will need to be innovation - new types of intermediaries, specialized underwriting, and new products.

Conclusions Startup costs are quite high, mostly into creating demand. The cap set on commissions for servicing health insurance must be higher than servicing life policies. Integrated composite products will help acheive scales

An Experience… Shobarani - Ibrahimpatnam

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