Fitting Insurance in the Health Financing Puzzle: Consolidated Lessons of MILK’s Client Math Studies of Health Microinsurance
• Falling ill and seeking healthcare entails a wide range of costs, all of which can be significant for low income households, and all of which can contribute to a person’s decision to avoid or delay seeking care.
• Even relatively small health shocks can create a substantial financial burden for low-income households,
forcing them to turn to difficult financing tools or to avoid care; for larger cost events this burden is much
greater, and households are often forced to cobble together many different often costly resources to cover
• Microinsurance can be a valuable tool for financing the costs of illness and healthcare, though it is rarely
sufficient to cover all of these costs.
• Cashless microinsurance coverage can have great value in reducing out-of-pocket spending at the time of
a health shock, though clients often still incur substantial indirect costs and suffer lost income.
• Even where microinsurance clients spend more overall than their uninsured counterparts when the
premium cost is included, microinsurance can help smooth cash flows at the time of the shock and help
avoid the use of burdensome financing (depleting savings or using assets); it is here that microinsurance
covering small shocks tends to have its greatest financial value.
• Health microinsurance can lead to access to quality healthcare facilities and can have unique value vis-àvis
other health financing tools in providing incentives to use care faster, more often, or more regularly;
however, this value is limited by the products’ coverage.
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