Micro health insurance hedges risk for India's poorest

Nandakumar Rajeshirke was suspicious of health insurance when he first heard about the idea three years ago. He had trouble understanding why it made sense to gamble on an unforeseen illness or accident when there was no guarantee he would ever see any money in return. Nandakumar Rajeshirke was suspicious of health insurance when he first heard about the idea three years ago. He had trouble understanding why it made sense to gamble on an unforeseen illness or accident when there was no guarantee he would ever see any money in return.But his insurance provider, a network of nongovernmental organizations called UpLift India Association, had already earned his trust by supplying him with reliable microcredit to fund his stone carving business in the city of Pune. Mr. Rajeshirke decided to buy coverage for his whole family at 50 rupees ($1.10) per person annually and renewed the plan for several years in a row.In 2005, his gamble paid off. Rajeshirke's wife needed a hysterectomy, a procedure that would normally cost 20,000 rupees ($446), one-third of his yearly salary."Without insurance," he says, "I would have had to sell some things from my house or get a loan from someone at high rates." Instead of facing financial ruin, he paid 6,000 rupees ($134) total and had help navigating the long process through diagnosis, surgery, and medication.Such plans, known as micro health insurance, are gathering momentum in regions of Asia and Africa that lack public health strategies. These nonprofit programs aim to provide quality healthcare at low premiums on a community-level scale. The idea is that, with creative planning, the poor can benefit from the same protections against risk as the rich.India is a world leader in this emerging field, with 5 to 10 million people enrolled in micro health insurance nationwide. Fewer than 10 percent of India's 1.1 billion people have any sort of health insurance, much of which covers only government employees. Poor people usually work in informal jobs or are self-employed, so they are extremely unlikely to be included in employment-related plans.