Info-Box: Micro Health Insurance

• Micro health insurance (MHI) is an emerging concept in many low-income countries all over the world
• Poor people are most vulnerable to health risks and less protected against the consequences
• MHI is the provision of health insurance services to low-income people, it operates on the basis of the same principles as conventional insurance, such as pooling of risks. Small and irregular income, lack of experience with insurance services, lack of access to public and/or private healthcare are examples for the conditions of the low-income sector targeted by micro health insurance
• Due to its connection and embeddedness with the local people, the benefits of risksharing can reach remote areas and poor people
• Micro health insurance can help to cope with catastrophic health care costs and thus to avoid dropping below the poverty line
• Moreover, micro health insurance units are even more important to their members, because they can improve access to health care services, may improve the quality of services and are an element of community empowerment and raising of health awareness
• Micro health insurance is a risk management institution for low-income population (mostly working in the informal sector) that cover the costs of certain predefined illness-related losses (=limited benefit package) to a certain extent (=limited coverage)
• The key features of micro health insurance are that the premium is prepaid on a regular basis before the illness-related event occurs
• The premium is affordable to low-income population, like any insurance, micro health insurance units apply risk pooling between good and bad risk