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Pricing micro health insurance products, experience from the field

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This is a power point from Healing Fields, an Indian Based NGO working with low income people. For insurance companies to become involved in micro insurance there will need to be innovation - new …

This is a power point from Healing Fields, an Indian Based NGO working with low income people. For insurance companies to become involved in micro insurance there will need to be innovation - new types of intermediaries, specialized underwriting,...


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  • 1. Pricing Micro Health Insurance Products Healing Fields Foundation
  • 2. 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
  • 3. 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
  • 4. 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
  • 5. Lessons!
  • 6. Mapping Costs
  • 7. 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.”
  • 8. Lessons
    • Pricing: Way to go!
      • Research community
      • (willing to pay between 200-300 per year)
      • Outline service and product needs
      • Integrate and Innovate!
      • Map all direct/indirect costs
      • Premium financing
      • (SHG member monthly savings is < Rs. 30/-)
  • 9. Healing Fields Foundation’s Experience
  • 10.  
  • 11. 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
  • 12. 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.
  • 13. 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%)
  • 14. Learning
    • Utilization:
      • Expected Loss ratio: 56%
      • Expected Hospitalization utilization: 3%
      • Expected OP utilization: 40%
    • Average claim settlement days: 13-15 working days
  • 15. 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.
  • 16. 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
  • 17. An Experience… Shobarani - Ibrahimpatnam
  • 18. Thank You [email_address]

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