A Fine Balance: A Case Study of the Client Value of Health Microinsurance - Uplift I.A.

Microfinance Opportunities (MFO) undertook research in February 2011 to understand the financial value of a health microinsurance product known as the HMF (health mutual fund) offered by the Uplift India Association (Uplift). MFO used a mixture of on-site interviews with key stakeholders in Pune, India, and an analysis of the program’s claims and financial data. The research included a case study that yields interesting insights into the experience and coping strategies of households responding to malaria, a serious but common disease among the local population. Taken together, the findings of the case study and the data analysis suggest that Uplift is providing substantial financial value to policyholders within certain constraints.

The case study sample of Insured households had lower out-of-pocket (OOP) costs for malaria care compared to similar Uninsured households. These Uplift households also paid less for debt financing than the Uninsured if they had to borrow to cover their medical costs. The study finds that the HMF program is providing financial protection to Insured families through claims reimbursements and access to lower-cost medical care.

Uplift’s business model is a client-managed, mutual insurance model; ultimate decision-making on claims reimbursements and other substantive matters is made by policyholders themselves. Policyholder participation was found to shape the financial value delivered via claims reimbursements by spreading them across more members with reduced average claims payments.

The report also finds that ongoing attention is needed in the area of client education if policyholders are to understand how to use the product to their maximum benefit. Finally, MFO proposes the following expanded definition of financial value for health microinsurance: “Financial value of health insurance is the degree to which membership in a health microinsurance program lowers the overall financial costs incurred due to ill health.”