1. A Umarani Director Tata-Dhan Academy
Action Research on Micro Health Insurance for Poor Experience of DHAN Foundation, India
A Umarani
Director
Tata-Dhan Academy

2. Health and Poverty
Human capital is essential to keep the people engaged in productive works. Health is one of the aspects to build the human capital
Morbidity is high among the low income households leading to poverty
The low income households are highly vulnerable to health risks
Two major approaches to manage risks by the communities are risk reducing (prevention and avoidance) and risk coping (reduce the effect after the event)

3. DHAN’s model
Building Social capital (SHG-Federations) as the basis for poverty reduction
Development and risk & vulnerability management are the twin approaches adopted by the SHGs and their federations
SHGs and their federations provide access to services such as microfinance, micro insurance, healthcare and education and livelihoods development services

4. Risk and vulnerability management in DHAN promoted People Institutions
Risk reduction strategies
Reproductive child and healthcare
Anaemia control programmes
Community health promotion through safe drinking water, sanitation and hygiene
Malaria control programmes
Nutrition programmes
Ensuring entitlements through Primary health centers
SUHAM (Sustainable Healthcare Advancement) hospitals – primary and secondary care
Federation clinics for primary care

5. Risk coping strategies
Risk retention – savings and credit services through self help groups
Risk transfer – most appropriate solution for uncertain health risks through micro insurance

6. People institution model of DHAN
Federation
SHGs
Cluster 1
15-20 SHGs
Cluster 2
SHG 1
SHG 2
SHG 3
SHG 21
SHG 22
SHG 23
DHAN Foundation

7. Subsidiaries of Federation
Hospital
Vocational
Institute
Federation
Producer
Company
Mutuals
DHAN Foundation

8. Subsidiaries of Federation
The SHG federation acts as an development agency
In addition to promotion of Microfinance for poverty reduction, the federation also takes up other development programmes like health, education, business promotion etc, based on the need of the Kalanjiam members
Exclusive subsidiaries are promoted as separate institutions for each of the development programmes
DHAN Foundation

9. Hospital One of the subsidiaries of Kalanjiam Federation
Exclusive governance structure with inter linkage with Federation’s.
Provides primary care
Identifies referral hospitals for secondary and tertiary care
DHAN Foundation

10. Federation Mutuals
It is one of the subsidiaries of federation for providing mutual based solutions to the risks of members; Owned and controlled by the members
Adopts three approaches to promote Micro insurance among the members
Through partnership with other insurance companies
Offers mutual based own solutions
Combination of both
DHAN Foundation

11. People Mutuals Federation 1 Federation 2 People Mutuals Federation 3
DHAN Foundation

12. People Mutuals Institution promoted by SHG federations
Separate entity (Trust) to implement the insurance programme for the members of DHAN promoted People Institutions
Promoted through collaboration between Oxfam Novib, Rabobank Foundation and Eureko Re, The Netherlands
DHAN Foundation

13. Micro Health Insurance - Models
Partner-agent model
Combination of partner-agent and mutual model

14. Partner Agent Model: Universal Health Insurance Scheme
Central Government sponsored Scheme
Implemented by all the four public sector general insurance companies
DHAN collaborates with National Insurance Company
Universal- includes all economic category-2/3 of premium is subsidized by the government for poor; covers preexisting illness also

15. iii. Procedure to claim the benefits
 Particulars
Section I
Section 2
Section 3
i. Benefits
Hospitalisation benefits upto a maximum of USD 600 (Rs.30000) in a year with a ceiling of (Rs.15000) USD 300 per illness
Life insurance coverage for accidental death of head of the family : USD 500 (Rs.25000)
Wage loss compensation for the head of the family of USD 1 (Rs.50) per day for 15 days from the 4th day of hospitalisation
ii. Exclusions
1.Any disease during the first 30 days from the commencement date of policy
2. Maternity expenses in the first year
3. Cost of spectacles, contact lenses and hearing aids not payable. Any Dental Treatment or Surgery, internal self injury and use of intoxicating drugs / alcohol, sterility, Venereal Disease not covered. Vitamin and tonics unless forming part of treatment of injury / illness are not covered. Treatments arising from or traceable to pregnancy, child birth, miscarriage, abortion or complication of any of these including caesarean section are not covered.
Intentional self injury, suicide or attempt to suicide.
Under the influence of intoxication, liquor or drugs
If the insured committing any breach of law with criminal intent
iii. Procedure to claim the benefits
1. Notice about the admission in the hospital should be immediately informed to Good Health Plan Limited (GHPL), the Third Party Administrator for National Insurance Company.
2.The claim form along with the bills should be sent to GHPL within 7 days of discharge from the hospital
3. GHPL would process and pay the eligible claims within 15 days to SUHAM/ Federation clinics.

16. Combination of Mutual and Partner Agent model
Mutual solutions are offered in addition to the partner agent model
Mutual solutions are offered only where there are community owned hospitals are established
Federations act as nodal agency and People Mutuals is the risk carrier

17. Mutual health Insurance Program features
i. Benefits :
1. Primary health care cover upto USD 60 (Rs.3000) with 25% copayment by the insured
2. Hospitalisation expenses upto a maximum of USD 100 (Rs.5000)
ii. Exclusions :
Chronic / pre - existing illnesses primary health care cost
iii. Procedure to claim the benefits:
Primary health care claims upto USD 60 (Rs.3000) per family in a year:
The insured avail the benefits on the spot and they pay only 25% of the treatment cost to the federation clinics/SUHAM hospitals. The clinics / SUHAM Hospitals would claim the benefits as detailed below:
a) The authorised bills from SUHAM/Federation clinics should be submitted to People Mutuals on a weekly basis
b) People Mutuals would process and pay the eligible claims within 15 days to SUHAM/ Federation clinics.
Secondary care claims upto USD 100 (Rs.5000) per family in a year:
a) The claim form along with the bills should be sent to People Mutuals within 7 days of discharge from the hospital

18. Premium structure for UHIS+Mutuals
Family type
Total Premium paid by the insured
Premium for NIC-UHIS
Admin cost of federation
Mutual insurance risk premium to People Mutuals
Single
375
100 25
250
Family of five
500
150
325
Family of seven
600
200

19. Back up insurance premium
Health Insurance
Mutual insurance premium
Member
Kalanjiam
Federation Mutuals
(Nodal agency)
Premium&
Member info
Claim
pay out
Insurance
Companies
Back up insurance premium
Claim pay out
People
Mutuals
(Mutual Insurer)
Member ID Card
SUHAM/Federation Hospital
Third Party Administrator

20. Insurance Literacy Members As consumers As owners
2. Governing Board of Federation Mutuals
3. Management staff of Federation Mutuals
4. Field level staff
DHAN Foundation

21. Consumer Education: Before selecting a solution/product
Consultative workshops for selecting a product/ designing a mutual solution
Risks and vulnerabilities faced by the members
Current coping mechanisms- their pros and cons
Need for a special strategy for managing uncertainties- importance of insurance
Difference between banking and insurance
Group and personal insurance schemes- Pros and cons from the perspective of consumer
Various group insurance schemes and their benefits and limitations
Selection of a particular programme from existing schemes or devising mutual solutions or a combination of both
DHAN Foundation

22. Consumer Education : After selecting a solution/product
This is done for promotion of a particular product
Features/components of the solution and reasons
Insurable and non insurable risks
Entry procedures
Claim settlement
FAQs
DHAN Foundation

23. Literacy: Members as owners
Enrollment procedures
Selection and anti selection
Claim servicing procedure
Orientation on financial management of Mutual programme
Need for Reinsurance/ Back up insurance
DHAN Foundation

24. Literacy: Governing Board of Federation Mutuals
Enrollment procedure
Selection and anti selection
Underwriting procedure
Claim settlement procedure
Financial management for mutual health programme
Roles and responsibilities of Mutuals committee
DHAN Foundation

25. Literacy: Management Staff of Federation Mutuals
In addition to all the above,
Models of micro insurance delivery- Corporate agency and Mutual solutions
Accounting and auditing
Management Information system
Financial planning
Insurance literacy to members and field staff
DHAN Foundation

26. Literacy: Field staffs
Basics of insurance and mutual solutions
Details of the specific solution/programme of the federation (features with reasons, exclusions)
Insurance literacy to members
Collecting the data
Enrollment and renewal procedures
Usage of MIS
Claim settling procedure
DHAN Foundation

27. Institutions for providing literacy
Federation Mutuals
Dhan People Academy
HRD of DHAN
Advanced Center for Skill and Knowledge for Mutual Insurance (ASKMI)of Tata-Dhan Academy
People Mutuals
DHAN Foundation

28. Reach (As on March 2012) Members enrolled Premium (in USD.)
Claims (in USD.)
1,78,081
542,971
455,924

29. Collaboration with Achmea Re Foundation
Promotional support for 45 federation mutuals for three years
Philanthropic reinsurance support at the end of third year
Technical mission team from EAF provides technical assistance

30. Prepositions for successful health insurance for poor
Health insurance is viable only when it is built upon micro finance initiatives
Social capital
Scale advantage which avoids adverse selection
Community based health care services to avoid moral hazard
Micro health insurance should focus on inclusion of primary health care and other health care related expenses, all diseases and all family members
Packaging of benefits by improving the product should ensure good and repeat enrolment
Pricing in Health insurance should ensure a right balance between viability and affordability
The reduction in health risks leads to improvement in human capital

31. Thank you