A STUDY ON MICRO HEALTH

INSURANCE IN BANGLADESH

Micro Health Insurance in Bangladesh 1

 A Report On

Micro Health Insurance (MHI) in Bangladesh

Prepared for

Nazreen Tabassum Chowdhury

Lecturer

School of Business

University of Asia Pacific

Prepared By

Group Name: The Doers

Name Registration No.

Nusrat Saragin 10202024
Mahmuda Yesmin 10202001
Sharmin Sultana 10202022
Sazzad Sakib 10202035
Najmul hasan 10202045

August, 2013

UNIVERSITY OF ASIA PACIFIC (UAP)

Micro Health Insurance in Bangladesh 2
 Letter of Transmittal

August 22, 2013

Nazreen Tabassum Chowdhury

Lecturer

Department of Business Administration

University of Asia Pacific

Dhanmondi, Dhaka-1205.

Subject: Submission of a report on Micro Health Insurance (MHI) in Bangladesh.

Dear Madam,

This is a great pleasure for us to submit the report on Micro Health Insurance (MHI) in
Bangladesh which we have been assigned to work on. As a requirement of the course FRL -
305, we have tried our level best to show our skills and potentiality to prepare this report.

So, we therefore, hope that you find it in order. We beg your kind advice and suggestion for
any mistake.

Sincerely yours,

Nusrat Saragin

Mahmuda Yesmin

Sharmin Sultana

Md. Sazzad Sakib

Najmul Hasan
 ACKNOWLEDGEMENT

We would like to take this opportunity to convey our heartfelt appreciation to them whose

blessing and cooperation was important to complete this report. At first, we would like to pay

our gratitude to the Almighty Allah who gives us the power to prepare this assignment.

We are greatly indebted to Ms. Nazreen Tabassum Chowdhury, Lecturer, DBA, University of

Asia Pacific, for her whole-hearted cooperation and supervision towards us during the

practical orientation. Her suggestions and comments to make this report was really a great

help for us.

Lastly, we would like to give many special thanks to all seniors and faculties, University of

Asia Pacific, for giving us good advice, suggestion and for inspiring us in some cases.

Micro Health Insurance in Bangladesh 4

 CONTENTS

TITLE PAGE

1.0 Introduction .. 07

2.0 Origin of the Study .. 08

3.0 Limitations of the Study ... 08

4.0 The Concept of Micro Health Insurance........................................................................... 09

5.0 Health Care and Insurance in Asian nation ...................................................................... 10

5.1 Health Care ............................................................................................................10

5.2 Health Insurance ................................................................................................... 11

6.0 Legislation and Regulations............................................................................................. 15

7.0 Overview of Micro Health Insurance in Bangladesh .......................................................16

7.1 BRAC Micro Health Insurance Program ..............................................................17

7.2 Grameen Kalyan.................................................................................................... 20

7.3 Society for Social Services.................................................................................... 21

8.0 Challenges of providing Micro Health Insurance to the poor............................................22

9.0 Scope of Micro Health Insurance (MHI) in Bangladesh................................................... 24

10.0 Recommendations........................................................................................................26

11.0 Conclusion....................................................................................................................27

References .. 28

Micro Health Insurance in Bangladesh 5

 Abstract

For quite 3 decades microfinance has been one in all the key development interventions in

Bangladesh. These models of innovative monetary services like credit and savings in

conjunction with business parts like capability building are enjoying instrumental roles in

financial gain smoothing and consumption smoothing of the low-income folks. However,

health shocks square measure unpredictable and eventually will entice poor and close to poor

households indefinitely into vicious impoverishment cycles. This study is aimed to introduce

the conception of Micro Health Insurance in Bangladesh.

The health care system in Bangladesh is especially urban-based, elite-biased and curative

oriented. Although nearly seventy fifth of the population lives in rural areas, the general

public and personal health care development has targeted primarily in urban areas. The

quality and therefore the level of health care provided by the general public sector is

insufficient attributable to low investment, government officials management, and therefore

the lack of kit, facilities, and trained medical professionals. The strengthening of public sector

health care by ordered Bangladeshi governments has not improved the supply of health care

services for the agricultural poor and specifically for poor ladies in rural areas.

With around three, 100 persons per single bed and twenty three doctors per one hundred

people, solely the higher and middle categories and people with political influence have

access to the general public health care system. The poor square measure unable to penetrate

the paperwork and therefore the deliberately biased system. Thus, they need access to public

health care solely in theory. This study identifies a possible demand for insurance and scope

for providing such services through the prevailing wide network of microfinance

establishments.

Micro Health Insurance in Bangladesh 6

1.0 Introduction:

Micro Insurance has been described as the The protection of low income people against

specific perils in exchange for regular premium payments proportionate to the likelihood and

cost of the risk involved (Churchill 2006). Microfinance trade has shown up as a good tool

in reducing vulnerability and financial condition in Asian country over the previous

few decades (Khondokar 2005). With the scope provided to borrow and

savings victimisation microcredit and micro savings mechanism, Microfinance (MF)

is answerable for making money and social capital that are tried quite winning in reaching the

low income segment; to defend them with a social safety-net that may enhance their

living normal. However, it limits the financial condition alleviation mechanism inside the

formation of economic and social capital solely however cannot directly address the

others indicators of financial condition like health, education; that if not taken care of

then the end result of the financial condition reduction efforts won't be adequately be

successful. Eventually in recent times, what has emerged and well-debated

among the event pioneers is to style some sort of safety-net program, if

possible, together with MF that may defend the low-income households from

the vulnerability of health shocks. Thus, small Health insurance (MHI) is what has

appeared as a possible strategy of such safety-net program. Health reasons area unit

held answerable for concerning 1/3rd cases of MF defaults resulting in any

indebtedness in Bangladesh. Pauly et al. (2008) in their studies showed that in

Bangladesh proportion of total out-of-pockets payment on medical expenditure

accounted for by lower financial gain households was sixty nine for all-time low eightieth of

the households in line with World Health Organization wealth primarily

based imputed financial gain. Even, the commercial insurance market has not been able

to accommodate an oversized number of poor-households as its shoppers which can ensue to

Micro Health Insurance in Bangladesh 7

high premium structure being unaffordable to the poor home. This review paper aims to

discuss the scope of incorporating MHI as a crucial safety-net tool to be

offered by Microfinance establishments (MFIs) in Asian country, for the low financial gain

households against health shocks.

2.0 Origin of the Study:

So much study is needed to collect information about health insurance because health

insurance concept is not so much familiar in our country where its a well known concept in

our neighbour country India. They continuously advertise about their many insurance

schemes but in our country it is not absent. So we visited some insurance companies directly

and tried to collect information as much as they served. But we depend largely on internet

where vast information is available. So we classified internet surfing as our primary sources

of information and visiting in insurance companies as secondary sources of information.

3.0 Limitations of the Study:

While we were preparing this report we face some limitations. These are mentioned below:

Health insurance information are really not so much popular in the perspective of

Bangladesh. So we had to work hard to collect information as accurate we could,

Limitation of time was also a concerning factor,

Both primary and secondary data are very limited,

As we are preparing the report on this sector for the first time, some mistakes or lack of

information may found in our report. But we tried to provide exact information as much

as we could and we wish that mistakes will be considered.

Micro Health Insurance in Bangladesh 8

4.0 The Concept of Micro Health Insurance:

Micro-insurance are often outlined as the protection of low-income individuals

against specific perils in exchange for normal financial payments (premiums)

proportionate to the chance and value of the chance concerned.(Churchill Definition,

2006). The idea of Micro-insurance emerges as a scope for low financial gain

people, notably in rural individuals to get some variety of insurance theme which will would

like them to pay a daily yearly premiums and reciprocally at later period can guarantee them

to receive a pay-out in an incident of a disaster, crop related failure or health issues, death

or different sorts of shocks. The importance of the idea of micro-insurance has emerged a lot

of recently thanks to its relevance for the low-earning teams as against the

conventional insurance schemes on the market to the final community as a full. Since

poor are a lot of prone to occurrences of events like that of death, illness, injury and accident

due to their vulnerable economic circumstances, the expected price of feat a general

insurance theme would be high enough to encourage them to urge enrolled into

such industrial schemes. Thus, micro-insurance, with its low-value products is

anticipated to protect variety of low-earning teams against catastrophic events with a

comparatively low-premium designed and considerably beneficial package. Pauly et al.

(2008) discusses that a risk indisposed households can voluntarily purchase insurance if it are

often offered to them at a premium whose excess over expected expenses is smaller than the

risk premium they might be willing to pay. Thus, it are often taken that micro-insurance

demands coming up with of merchandise at comparatively reasonable premium-

cost that's targeted specifically to the low-earners that ought to be channelled

through economical community organizations as against the industrial.

Micro Health Insurance in Bangladesh 9

 5.0 Health Care and insurance in Asian nation:

5.1 Health Care:

A rough estimate of this annual worldwide health care expenditure (public and

private) amounts to US$2,000 billion. On average, developed countries pay US$1,500 per

person on health care, compared to US$287 in developing countries. the amount of health

care spending in Asian nation at three.5% of its total GDP6 or US$58 per person

is significantly lower than several developing countries; a considerable a part

of this disbursement is non-public, out-of pocket expenses. A Ministry of Health and

Family Welfare study over that solely thirty fourth of health expenditure

was supported by the govt., sixty fourth by the general public and a couple of by NGOs.7

Despite such a high share of expenditure by non-public people, the supply of health care

is inadequate in terms of quality and access. This highlights the

necessity for different finance, including the supply of a lot of comprehensive health care

insurance. The present state of health care in Asian nation incorporates a colonial bequest.

At the time of independence in 1971, the country inheritable a health system

introduced throughout British era and perpetuated throughout Pakistani rule. The system

was primarily urban-based, elite-biased, and curative-orientated. The Asian

nation Government continued with a similar system. Even though nearly seventy fifth of

the population still lives in rural areas, health care development is

mainly urban. Bangladesh is split into six Divisions, sixty four Districts, 460 Upazilas,

and 4403 Unions. Each Union has on a mean three Wards; and four to

five villages represent a ward. On a mean, a Ward incorporates a population of seven

thousands folks and is that the lowest body tier of the Government.

The structure of the health service follows this body structure. The Ministry of

Micro Health Insurance in Bangladesh 10

 Health and Family Welfare is to blame for policy, coming up with and deciding at the

macro level. Below this area unit 2 major implementation wings: the board General of

Health Services and also the board of planning. The Director General of Health

Services is to blame for implementation of all health programs of the govt., and

provides technical steerage to the Ministry. The board of planning is

responsible for implementing planning programs and provides planning connected

technical help to the Ministry. Government health care services area unit provided

through a five-tier system. The amount and sophistication of the health service facilities

go up with the increase within the level of body hierarchy, as shown in Table 1.

Table 1: Health Care Administrative Levels in Bangladesh

Level Of Care Administrative Number of Population Covered

Unit Facilities

1.Tertiary Division 33 Teaching & 10-15 million by all

Specialized units
Hospitals

2. Second Referral District 64 District Hospitals 1-2 million by each

unit
3. First Referral Upazila 553 Upazila Health 200,000-450,000 by
Complexes each unit

4. First Level Facility Union 4,068 HFWCs 21,000 by each unit

5. First Contact Ward Community Based 7,00 by each unit
Staff
6. Informal Contact Village TBA (Dais) & 1,000-1,500
Kobiraj

5.2 Health Insurance:

Following independence in 1972, the Asian nation Government nationalised all insurance

companies within the country. The freshly created Jiban Bima (Life Insurance)

Micro Health Insurance in Bangladesh 11

 Corporation took over all the assets and liabilities of the life business, whereas the

Sadharan Bima (General Insurance) Corporation did a similar for the non-life

business. AN ordinance passed in 1984 allowed the formation of

personal insurance firms. As shown in Table two, presently there

are sixty Insurance firms and firms in Asian nation divided into 2 classes, Life and

General (Non-life).

Table 2: Number of Insurance Companies in Bangladesh

Bangladesh Insurance Companies Number of Operators

Public Sector Life Insurers 1

Private Sector Life Insurers 16
Total Life Insurers 17

Public Sector General Insurers 1

Private Sector General Insurers 42

Total General Insurers 43

The Bangladeshi insurance sector remains underdeveloped compared to it of neighbouring

countries. Insurance disbursement as a proportion of gross domestic product in Asian

nation at 57% is additionally among the lowest within the region. Per capita insurance

premiums in 2003 were US$2.1, compared to US$2.9 for Islamic Republic of Pakistan,

US$14.5 for state and US$16.4 for India. The Insurance Act in Asian

nation permits solely life assurance firms and composite insurance firms to

supply insurance, and thus the non-life insurance companies that area

unit providing insurance area unit in breach of the law. K M Mortuza Ali conducted a survey

of the life and non-life insurance firms in Bangladesh in mid-2002. 10 life

assurance suppliers and twenty non-life insurance suppliers responded. Out of those, 3 life

Micro Health Insurance in Bangladesh 12

assurance firms had introduced restricted health insurance product, one life

assurance company was curious about introducing health insurance, whereas six

others explicit that they may contemplate insurance as a future possibility.

Seven of the twenty non-life insurance firms had introduced restricted insurance

products as of Gregorian calendar month 2002. Of the rest, 2 explicit they might not have an

interest in health care infrastructure. The remaining eleven cited an absence of demand for

such product for his or her decision, backing up the unremarkably command opinion that the

shortage of public awareness is main reason for the underdeveloped state

of insurance in Asian nation. All twenty insurance companies believed the govt. ought

to develop a legal framework to standardize operational procedures and introduce quality

assurance in health care service provision. One can conclude from Alis results that a lot

of problems associated with insurance have to be compelled to be resolved before

insurance firms are ready to enter this market on an oversized scale. The non-

public insurance market in Asian nation is comparatively underdeveloped compared to

life insurance. The Governments current accelerated privatization program is anticipated to

stimulate growth within the insurance sector. Theres additionally a general belief that within

the coming years, the method of economic process can bring foreign insurers to the country.

Before this can happen though, the regulative surroundings bearing on the

insurance business should be drastically improved. There area unit variety of innovative

community-based insurance schemes in Asian nation, largely pass NGOs. the

foremost notable of those area unit Gonoshashtho Kendra, Sajida Foundation, Shakti,

and capital of Bangladesh Community Hospital.

Micro Health Insurance in Bangladesh 13

 Gonoshashtho Kendra

Gonoshashtho Kendra (GSK) was the primary organization to introduce HMI in Asian

nation. GSK operates a health microinsurance theme supported the insureds ability to pay.

GSK was established in 1972 by Dr Zafarullah Chowdhury. In 1971, throughout the

Liberation War against Islamic Republic of Pakistan, Dr. Zafarullah and a couple of young

Bangladeshi doctors United Nations agency were learning within the United Kingdom of

Great Britain and Northern Ireland managed to lift funds from Bangladeshi

doctors everywhere the globe to help the liberty fighters. They enraptured to the

conflict space and started a 480-bed military hospital for the wounded on the Indian

border. Once the war, in 1972, the hospital was transferred to given land at

Savar, AN Upazila of Dhaka, with six tents And an outpatients clinic beneath a jackfruit.

GSKs original aim was to supply health care applicable to the wants of the agricultural poor.

Over the years, it's widened its work to embrace programs that embody education, nutrition,

agriculture, environment, immunizing

agent analysis, flavourer healthful plant analysis, financial gain generation and occupation

training. GSK additionally seeks to satisfy the various development desires of the poor

and landless.

Since its origin, it's trained over four,000 paramedics, of whom a hundred and sixty area

unit at the moment used at the GSK centre in Savar and ten sub-centres established round

the country to supply health care to 180,000 low-income folks. Sixty percent of the

paramedics area unit ladies. Theyre trained in curative and primary health care programs

and practice of medicine of all types. In 1981, GSK started Gono prescription {drugs,

prescribed drugs} to provide affordable drugs. It been a good success and now provides five-

hitter of all medicine consumed in Asian nation. Its costs area unit regarding hr below those

of multinationals, that in some cases has crystal rectifier to lower costs as a results

Micro Health Insurance in Bangladesh 14

of competition. The industrial plant employs four hundred folks. Half its profits area

unit earmarked for GSKs social comes. GSK currently additionally operates a 100-bed

hospital in Dhanmondi space (and higher social class area) of the capital, Dhaka. the

most beneficiaries area unit slum dwellers and domestic employees within the town. Many

middle-class town dwellers additionally use its services. The hospital has all the

fashionable diagnostic and treatment facilities, and a awfully trendy internal organ unit

capable of performing arts internal organ by-pass operations is within the coming up

with stages.

GSK is controlled by a public trust, of that Dr. Zafarullah is one in every of the four trustees.

The Trust employs someone, 500 regular employees, with a further one, thousand part-

time employees members. Regarding half its budget is self-generated. A very

important principle is that GSK ne'er provides away its product and services freed

from charge. They need to be procured, but cheaply.

6.0 Legislation and Regulations:

The law regulation the insurance business in Asian nation is that the Insurance Act of 1938.

Introduced beneath British people era, it's additional or less remained identical,

with solely some amendments revamped the following decades. The sole reference within

the Act to health insurance could be a definition. The regulatory agency in Asian nation is

staffed by bureaucrats who have restricted information or expertise in insurance. Its presence

has very little impact within the insurance sector or on the standard of insurance merchandise.

As a result, insurance regulation in Bangladesh is nearly non-existent.

Micro Health Insurance in Bangladesh 15

7.0 Overview of Micro Health Insurance in Bangladesh:

Bangladeshi microfinance NGOs came into the health micro insurance scene within

the late Nineties and early 2000s. Throughout the Nineties, the flagship organizations like

Grameen Bank and BRAC were pre-occupied in their diversification programsIT, mobile

telecommunication, renewable energy, bank, university and shopper productsand little or

no resources were applied to the health micro insurance apart from some studies

and many pilot schemes. vital players in health micro insurance are Gonoshashtho Kendra,

Sajida Foundation, Shakti, capital of Bangladesh Community Hospital, BRAC, Grameen

Kalyan, Nari Uddug Kendra, Dushtha Shasthya Kendra, Integrated Development Foundation

and Society for Social Development. Most decision themselves health card systems and

use risk pooling to hide an outsized range of individuals. 2 giant microfinance NGOs, ASA

and Proshika, haven't entered health micro insurance; they state that they are doing not have

the resources to supply the service. Although HMI has not been incorporated into the govt of

Bangladeshs National Health Policy, the Ministry of Health and Family Welfare has

shown nice interest within the concept and is considering the inclusion of HMI programs as a

technique of extending existing government health service reach. Within the non-government

sector, the provident societies, and mutual and cooperative organizations supply a

vital choice for micro insurance. There is additionally a sense among alternative non-NGO

health service suppliers that a legal framework should be developed to facilitate

the growth of organisation provided health care services and introduce standardised

operational procedures and maintain quality assurance. the categories of service offered by

health micro insurance schemes in People's Republic of Bangladesh embrace

preventive care, like academic programs on cleanliness, food preparation, AIDS

prevention and ante partum care; and first care, e.g., medical exams, consultation with

certified doctor, and prescription for medicines. Lab tests, like x-rays, and major medical

Micro Health Insurance in Bangladesh 16

care level like surgeries also are accessible. The organizations lined during this study

provide a whole coverage of all services.

7.1 BRAC Micro Health Insurance Program:

BRAC (Bangladesh Rural Advancement Committee) was got wind of in 1972 as a non-profit

development organization to supply relief to individuals whose lives were dominated by

extreme poverty, illiteracy and sickness. Since its beginning, BRAC has adult to become one

in all the largest NGOs within the world, operating in sixty five,000 villages all told sixty

four districts of Bangladesh, employing over thirty five,000 regular workers and sixty

one,750 full-time and part-time lecturers BRAC features a vary of health and development

services out there to thirty one million individuals within the country through thirty

seven health centres. it's supported by thirty three,000 volunteers and treated five.7 million

rural poor in 2004.

The BRAC Health Program focuses in the main on the community, with a selected specialize

in women and kids, although a man arent specifically excluded, and is enforced through

three tiers.

The primary tier may be a cadre of part-time community medical experts, known

as Shashtho Shebikas (SS), largely ladies and therefore the front-line staff of BRACs

Health Program. They go door-to door to teach community members

on essential health matters, offer treatment for basic ailments, essential health

commodities, and facilitate to form health-empowered communities.

The second tier may be a cadre of health paramedics, all women, known as Shashtho

Kormis (SK). a comparatively new innovation of the BRAC Health Program, these

paramedics oversee the work of the SS, offer pregnancy-related care, and hold health

education forums where the communitys health issues area unit addressed .

Micro Health Insurance in Bangladesh 17

 The third tier may be a network of clinical facilities, known as BRAC Shushasthos.

The Shushasthos offer technical and clinical backup to the SS and SK, United Nations

agency refer patients that they can't treat to those centres. The Shushasthos

provide treatment and diagnostic services, have comprehensive laboratory labs,

outpatient facilities, and in-patient services, all supported of qualified nurses and

physicians. There are 98 Shushasthos operational in ninety two Upazilas within

the country.

In a shot to seek out ways that of higher finance its clinics, in Gregorian calendar

month 2001, BRAC initiated pilot project on health micro insurance in Madhabdi Upazila of

Narshingdi District. BRAC MHIB was formally launched in Gregorian calendar

month 2001, once BRAC signed a 3-year agreement with the ILO. With this support, the

project was scaled up within the initial pilot space and extended to

another space, Phulbari Upazila in Dinajpur District. The project is intended to attain 3

primary goals: 1) contribute to womens empowerment; 2) increase access to BRACs

existing health care initiatives for poor ladies and their families; and 3) increase awareness

of preventative health care together with HIV/AIDS and sexually transmitted diseases

(STDs).

Micro Health Insurance in Bangladesh 18

 BRAC Publicity Material

QUALITY HEALTH CARE AT LOW COST

Micro Health Insurance in Bangladesh 19

7.2 Grameen Kalyan:

Grameen Kalyan (GK) could be a member of the Grameen Samogri (Family) the Grameen

Bank group (see Box 2). Over the years, evaluations of Grameen Banks micro-credit

program revealed that health problem and also the value of health care act as major obstacles

to borrowers breaking out of the poorness cycle. A study undertaken by Dr. David Gibbons

and Helen of Troy Todd in 1992 found that when ten years of Grameen borrowing, fifty

eight of the members had raised themselves out of poorness, compared

with solely eighteen of non-borrowers. Of the forty second of

borrowers WHO didn't improve their socio-economic condition, hour had told a

serious health problem at intervals the family that drained family resources

Once GK was established in 1996, the pre-paid health card system evolved into this

GK insurance theme and also the card still remains as a part of the new theme. this

scheme is double-geared towards GB borrowers and their families, yet on eligible villagers.

Eligible villages area unit those who area unit set at intervals associate eight kilometre radius

of a GK health centre, which is generally established near a GB branch covering

roughly identical operational space. Insurance fits in with the philosophy of the organization.

Health micro insurance plays a important role in GK activities. It serves the twin purpose of

ensuring the participation of the target cluster yet as acting as a supply of revenue for the

program. The theme employs a wage scale fee structure, as shown in Table eight. Non-GB

villagers pay slightly higher premiums and copayments than GB members. However, no

distinction is created in terms of service and edges once they're listed within the health set up.

The health set up conjointly provides free preventive care, birth prevention and health

education services to all or any, regardless of subscription to

Micro Health Insurance in Bangladesh 20

the insurance theme. Every HMI set up covers up to 6 members of a cardholders family. For

families with quite six members, an associational fee of US$0.34 is charged for

every further member. Non-cardholders pay US$0.85 for a medical consultation and

full worth for drugs and pathology tests. GK attempts to cross-subsidize its members by

having higher valuation structure for non-GB cardholders and non-cardholders. Receipts area

unit issued for all money received by the clinics.

7.3 Society for Social Services

The Society for Social Services could be a non-governmental, non-profit, non-political

voluntary development organization established in 1986 within the Tangail

district. Its registered below the Department of welfare and additionally with

the NGO Affairs Bureau. The health program is a part of independent agency NGO. SSS

was based by a bunch of development staff out to promoting the socioeconomic condition of

the poor through need-based provisions of microcredit, health, and education facilities.

The independent agency Health Program began in earnest in January 1996, and at intervals a

year, a 20-bed hospital was established during a rented two-story house within the city of

Tangail. In January 2004, a 52-bed hospital was opened with

technical and monetary help provided by the charity Terre des Hommes (TdH),

Netherlands. At present, the health program operates one urban hospital and sixteen rural

clinics, serving 531 villages of eighty three Unions set in vi Upazilas (sub-districts) of

Tangail.

The independent agency uses a health care card system that functions similar to associate

degree HMI theme in its technique of operation. The health care card carries the name

Micro Health Insurance in Bangladesh 21

address and photograph of the cardholder and the names of the beneficiaries, and it's to

be created to receive treatment at the clinics. Health cards are purchased at any independent

agency clinics or at the hospital at any time throughout

the year. All payments are in money and receipts are issued for all money received by the

clinic.

Enrolment is obligatory for all independent agency borrowers living within the four sub-

districts of Tangail in which the hospital and sixteen clinics are set. Theyre referred to

as Samity members. Samity members ar needed to pay US$0.34 annually for a health

card, just like a premium below HMI programs, and also are needed to pay a registration fee

of US$0.51, love a copayment, on every visit to the hospital or clinic. Associate

degree independent agency employee can even be a part of the program by buying a health

care card at a price of US$0.17 annually and paying the US$0.51 registration fee

on every visit to the hospital or clinic.

8.0 Challenges of providing Micro Health Insurance to the poor:

There are variety of challenges that considerably hinders the provision of formal insurance

theme to the low financial gain households. So far commercial insurance suppliers haven't

done abundant to achieve bent on sectors outside the formal economy. It appears that ancient

formal insurance merchandise have been designed with the centre and high financial gain

category in mind. On the opposite hand, despite their nice would like for a few style of social

protection, the poor lack the capability to access formal insurance. Even the massive and

made MFI in Bangladesh like BRAC, Grameen, ASA square measure still back in terms of

providing formal insurance schemes for his or her shoppers at a major scale. Matin et al.

(2005) attracts attention on the demand for such insurance merchandise for low-income

Micro Health Insurance in Bangladesh 22

households from the attitude of any grass-root organization significantly BRAC. However,

inadequacy in health infrastructures and poor provision of health services (including doctors

convenience, practical equipments, stock of medicines) could produce obstacles to supply

insurance theme with assured quality of care in an exceedingly giant scale. Lack of adequate

health infrastructure and quality of services can result in consumer discontentedness and

thence loss of interest in deed or revitalising such insurance packages.

A typical insurance theme should influence the matter of knowledge asymmetry within the

styles of Adverse Selection and Moral Hazard which will be even more difficult once the

target cluster is low financial gain communities associated with the informal sector. It's

seemingly that the insurance underwriters could realize themselves at a grip of losing an

oversized quantity of cash than that's expected owing to the prevalence of adverse choice and

financial loss . In context of marketplace for MHI when it comes regarding facing the claims

from the insured shoppers, adverse choice may end in the shape of many deceitful cases

rising out of a various claims resulting in creation of ethical Hazard within the long-term.

Aside from these striking challenges things like Flexibility in premium collection, Low

Renewal rate and high group action price and unfavourable revenue-cost ratio imposes

important obscurance in an exceedingly made implementation of MHI program by the

insurer.

Models explaining the delivery mechanisms of small insurance

a) The Provider-driven Model: It's once the care supplier themselves square measure

the micro-insurers and thence burdens all the responsibilities concerning operation,

implementation of service, coming up with varied schemes(life or health insurance).

b) The Full-service Model: It's conjointly just like the primary one with the exception that the

small insurance supplier is accountable of the look and delivery of products to the members,

Micro Health Insurance in Bangladesh 23

and delivers services through contracts with external suppliers of health services, completely

different medical clinics, public hospitals, etc.

c) The Community-based Model: This can be seen among rare prevalence, where the

policyholders or members square measure accountable, managing the operations and owning

the method, and dealing with external care suppliers to supply services to them

d) The Partner-Agent Model: during this model, a partnership is created between the micro

non depository financial institution and an agent (an organization, Microfinance Institute) and

in some cases a third-party care supplier. The agent is accountable for the delivery and selling

of merchandise to the shoppers.

9.0 Scope of Micro Health Insurance (MHI) in Bangladesh:

In a developing country like East Pakistan, health service provision for the poor has

continually been a challenge, since still thirty per cent of population lives below the

impoverishment line3. Thus, guaranteeing a high quality health service continues to be

needed in mass creativeness therefore on reach the target of the MDG by 2015, though there

have been enhancements within the health indicators over the amount of few years such as

the recent accomplishment current created in kid survival(MDG Goal 4) in 2010.However,

AN analysis report4 of UNDP on health indicators associated with MDG reveals that despite

positive changes in achieving the goals however challenges remain in terms of up overall

health standing of the poor. The report place forwards the very fact that East Pakistan still

lacks adequate biological process standing of girls and kids, conjointly maternal health

improvement and combating against bound chronic diseases like protozoal infection, TB,

AIDS still needs progress. Thus, though positive changes square measure noticeable,

however accelerated growth in terms of achieving MDG goals is what's demanded at current

times once solely four years are ahead to succeed in the dateline of 2015 for meeting the

Micro Health Insurance in Bangladesh 24

targets of 2015. A huge gap in access to health services for the bulk of the population in East

Pakistan estimated at eighty seven % of the population by United Nations agency (ILO

2008) that results in extremely low health indicators of the population, notably deplorable

high levels of maternal and babe mortality.

It is inevitable that an outsized proportion of monthly financial gain of households (whether

poor or rich) square measure flown away on medical expenses in recent times once getting

medical facilities or check-ups square measure extremely dearly-won and on the far side

reach of most low-income households.

Health expenditure comes into four distinct levels: Primary, Secondary, Tertiary and ruinous

events, every serving health associated hazards at different levels and totally different for

various diseases.

In Bangladesh, most primary care is free at public hospitals and there is solely a nominal

registration charge for patient and patient care in secondary facilities. The study of EQUITAP

(2005) conjointly depicts that the share of total owed (OOP6) payments is seventieth or a lot

of in Bangladesh that goes on medicines solely. This is often according to the larger

prevalence of self-medication in poorer and notably rural societies within which access to

health services is constrained by financial gain and distance. The priority is growing relating

to these which have still not captured the main focus of each government initiators and NGOs

eventually worsening things for the poor as outsized portion forms out-of pocket expenditure

(OOP). It looks individuals don't seem to be however managed to search out possible ways in

which of facing ruinous events. It should flow from to unconsciousness of such circumstance

which will follow or lack of education/knowledge on this field.

Micro Health Insurance in Bangladesh 25

Thus, if the incidences of ruinous events square measure a lot of, then households on average

is vulnerable of loss of a property support. within the absence of insurance cowl, households

with severe and immediate medical desires is forced to expend an outsized fraction of the

social unit budget on health care. Such spending should be accommodated by decreasing on

consumption of alternative goods and services, by accumulating debt, by running down

savings or by commerce assets.

10.0 Recommendations:

The analysis of the study illustrates that despite having gradual growth of GDP, the

individuals health expenditure has adult chop-chop at a major rate. The analysis additionally

projected that individuals health expenditure can have a massive increase by 2022 which can

be above the rise of the whole household expenditure. Thus, it's evitable that there's a

growing demand for health insurance merchandise among the low-income

families/households to bring the population of the country at intervals the coverage of basic

health care at accessible medical expenditure. However, once it comes regarding formal

insurance providers, less than fourteen insurance corporations square measure concerned in

providing health insurance of that cluster health set up for workplace or works worker is most

common and therefore the annual coverage reaches up to Tk.150, 000 for many generous

policies. Thus, the contribution of personal insurance corporations in healthcare funding

remains minimal and therefore there's would like for various to depend on for provision of

MHI at higher scale.

Thus, if all the MFIs might be with success labelled with Associate in Nursing agent non

depository financial institution then there's a possibility of a brand new dimension of health

Micro Health Insurance in Bangladesh 26

care for the poor with an alternate scope of funding within the health care sector though

correct implementation of micro insurance schemes.

11. Conclusions:

Health issues square measure unpredictable and still rife at wide rates. Thus, in Associate in

Nursing economy wherever an oversized population still suffers from situation and vastly

conditional informal sector, a more robust health for everybody can lead to formation a

additional productive human resource and thence guarantee a sustainable human

development. This paper tried to introduce the thought of Micro Health Insurance as a vital

tool to alleviate impoverishment. As per the analysis, there's increasing demand and want for

small insurance (health) products to be introduced. Thus, despite several NGOs square

measure operating during this field, government should step up to support small insurance

business in its true essence by establishing correct insurance laws initiating public-private

partnerships with commitments for subsidizing early initiatives. Additionally what's needed is

would like of higher health infrastructure and correct service delivery mechanisms that will

serve to push a more robust atmosphere for Micro insurance business to flourish in

Bangladesh. Thus, scope square measure there during this field what's needed square measure

awareness of the policy manufacturers and development practitioners concerning the growing

health concern of the poor and powerful urge to shed impoverishment for countrys sake. The

original purpose of enrolling the poor in micro health insurance schemes is to use it as a

cushion against risk factors and to minimise their healthcare costs. The proper execution and

optimistic results of this micro insurance scheme is expected to open up a new dimension of

healthcare for the poor and also to provide an alternative scope for its financing the sector.

Micro Health Insurance in Bangladesh 27

 References:

Ali, Mortuza K M, Requirements for Providing Sustainable Health Care and Health

Insurance Schemes in Bangladesh, Insurance Journal, Vol. 53, Bangladesh

Insurance Academy, July 2002.

Ahsan,S.M (2009), Micro Insurance, Poverty and Vulnerability: A Concept Paper,

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Churchill Definition (2006), viewed 5 February 2011, Retrieve from

<http://www.microfinancegateway.org/p/site/m/template.rc/1.11.4824/

Ali, M M, The Insurance Act, 1938 and Rules 1958, Seraj Book Syndicate, Dhaka:

October 2001.

WEEH (a), Grameen Kalyan and BRAC: Assessment of Micro Health Insurance

Schemes, Dhaka,March 2004.

Ahmed M. Islam SK. Quashem M. Ahmed N. Health microinsurance: a comparative

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