Health Insurance Benefit Packages Prioritized by Low-Income Clients in India: Three Criteria to Estimate Effectiveness of Choice

Social Science & Medicine, Vol. 64, No. 4, 2007

13 Pages Posted: 26 Sep 2007

See all articles by David M. Dror

David M. Dror

Micro Insurance Academy (MIA)

Ruth Koren

Tel Aviv University - Professor Sackler Faculty of Medicine

Alexander Ost

affiliation not provided to SSRN

Erika Binnendijk

Erasmus University Rotterdam (EUR)

Sukumar Vellakkal

Public Health foundation of India (PHFI)

Marion Danis

Head Section on Ethics and Health Policy

Abstract

We applied a decision tool for rationing choices, with a predetermined budget of about US$11 per household per year, to identify priorities of poor people regarding health insurance benefits in India in late 2005. A total of 302 individuals, organized in 24 groups, participated from a number of villages and neighborhoods of towns in Karnataka and Maharashtra. Many individuals were illiterate, innumerate and without insurance experience. Involving clients in insurance package design is based on an implied assumption that people can make judicious rationing decisions. Judiciousness was assessed by examining the association between the frequency of choosing a package and its perceived effectiveness. Perceived effectiveness was evaluated by comparing respondents' choices to the costs registered in 2049 illness episodes among a comparable cohort, using three criteria: 'reimbursement' (reimbursement regardless of the absolute level of expenditure), 'fairness' (higher reimbursement rate for higher expenses) and 'catastrophic coverage' (insurance for catastrophic exposure). The most frequently chosen packages scored highly on all three criteria; thus, rationing choices were confirmed as judicious. Fully 88.4% of the respondents selected at least three of the following benefits: outpatient, inpatient, drugs and tests, with a clear preference to cover high aggregate costs regardless of their probability. The results show that involving prospective clients in benefit package design can be done without compromising the judiciousness of rationing choices, even with people who have low education, low-income and no previous experience in similar exercises.

Keywords: micro health insurance, social insurance, insurance for the poor, community based health insurance, health financing

Suggested Citation

Dror, David M. and Koren, Ruth and Ost, Alexander and Binnendijk, Erika and Vellakkal, Sukumar and Danis, Marion, Health Insurance Benefit Packages Prioritized by Low-Income Clients in India: Three Criteria to Estimate Effectiveness of Choice. Available at SSRN: https://ssrn.com/abstract=1016681

David M. Dror (Contact Author)

Micro Insurance Academy (MIA) ( email )

New Delhi, NCR
India
+41 78 790 6789 (Phone)

HOME PAGE: http://https://en.everybodywiki.com/

Ruth Koren

Tel Aviv University - Professor Sackler Faculty of Medicine ( email )

Ramat Aviv
Tel-Aviv, 6997801
Israel

Alexander Ost

affiliation not provided to SSRN ( email )

No Address Available

Erika Binnendijk

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Sukumar Vellakkal

Public Health foundation of India (PHFI) ( email )

4 Institutional Area
Vasant Kunj
New Delhi, Delhi 110070
India

HOME PAGE: http://www.phfi.org

Marion Danis

Head Section on Ethics and Health Policy ( email )

Warren G. Magnuson Clinical Center
Bethesda, MD 20895-1156
United States

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