Determinants of Enrolment in Voluntary Health Insurance: Evidences from a Mixed Method Study, Kerala, India

Abstract

Background & Objectives: Financial burden on households due to healthcare is high in India but only small segments of the population are covered with health insurance. This study has two objectives: 1. to investigate the factors affecting enrollment in voluntary health insurance, and 2. to examine the characteristics of enrollment in terms of income-related inequality and adverse selection problem.

Data and Methods: This is a cross sectional study. Mixed method approaches - qualitative and quantitative methods were used. In-depth interviews were conducted among officials of insurance companies, insurance consultants (insurance agents), insured and uninsured people. Subsequently, household surveys among insured and uninsured were carried to examine the significance of the determinants on enrollment.

Results: In addition to income, education and health risk, the level of awareness of people about insurance and the significant role of insurance consultants matter in the enrollment in voluntary health insurance. The enrollment in health insurance is characterised by income-related inequality in enrollment, and ii) no adverse selection.

Conclusion: We identified several demand and supply side factors negatively and positively affecting the enrollment. This study suggest that, in addition to developing a competitive insurance market with the availability of attractive health insurance products and ensuring reimbursement about eligible claims, appropriate policy measures such as promoting people’s awareness on insurance and introducing better incentive structures for insurance consultants are needed to increase enrollment in health insurance.

Keywords: health insurance, enrolment, inequality, adverse selection, awareness, insurance consultant

JEL Classification: I11, D1