Institutional Options for Delivering Health Microinsurance

Abstract

Health insurance entails the transfer of health risks in return for a premium payable in advance. This succinct description suggests that the arrangement entails flows of funds and information in two directions: from the client to the insurer and from the insurer to the client. The party with the most control of these flows of funds and information can influence the business process to its advantage. This notion that one party would seek an advantage over another implies that conflicts of interest can occur between insurers and insured. But is this the case in health microinsurance provision? And if so, does the institutional option (model) for delivering health microinsurance have an influence on such conflicts of interests and efficiency in the provision of insurance? This chapter looks at these questions by offering a basic typology of the different business process options identified in health microinsurance provision. Such a typology will help identify conflicts of interest and remedy inefficiencies in the smooth bi-directional flow of funds and information. This chapter first summarizes the main types of health microinsurance providers and then analyses their relative effectiveness in meeting the needs of the low-income market over the long term.