Insure thyself

EAR TO THE GROUND

While promising to increase government spending, the Eleventh Plan puts its faith on community-based health insurance schemes.

The Eleventh Plan document says that 72 per cent of health bills are paid from the pockets of the householder and are often the cause of their poverty. It admits that the government spending on health has declined from one per cent of GDP to 0.94 per cent. This contrasts with the country's total health spending of 4.5 per cent to 6 per cent of GDP.

The Plan promises to increase government spending by 0.55 per cent of GDP in the first two years and by another 0.87 per cent in the last part of the Plan period. But it banks on the community itself to provide solutions for the future.

The government insurance net covers just 11 per cent of the population at present and is not going to expand too soon. Hence the Eleventh Plan document says the government will encourage community risk pooling in the current Plan period (2007-2012).

Local governments will identify population at risk and provide a revolving fund to be managed by a consortium of self-help groups. This consortium would also encourage small savings by households and, whenever required, give needy households a cash support of Rs 5,000 to Rs 10,000 for hospitalisation, catastrophic illness and death.

This will save households from immediate financial debts at the point of crisis, the document says.

They would repay this money at a modest interest rate within an appropriate time frame so that the village health risk pool does not fall below Rs 1 lakh. During the Plan, pilot projects will be undertaken in select states under the National Rural Health Mission (NRHM) and National Urban Renewal Mission.

The Eleventh Plan also promotes another insurance model based on self-help, viz the community-based health insurance, the likes of which are the basis of much of the insurance in countries like France.

Community Based Health Insurance (CBHI) is a scheme that is aimed primarily at the informal sector and formed on the basis of collective pooling of health risks and the members participating in its management, explains the Plan document.

It is the kind of practice which is being followed in some slums and villages near Pune, described in this space on an earlier occasion.

Here, the intervention of the government is substituted by an NGO. The funds are raised form the people and the pool is maintained. There are no long-term savings or profits out of it. The immediate need of the member is taken care of. A ceiling is prescribed, say Rs 5,000 or Rs 10,000, and a member can claim the money when he needs it.

The models vary in different places. The Plan document mentions models practised by NGOs like ACCORD, BAIF, Karuna Trust, SEWA, Dhan Foundation and VHS. It says that specific schemes should be developed according to the local requirement.

During the Plan, such CBHI schemes will be encouraged through public system and by accredited private providers, promises the document.

It also proposes to channelise maternity health insurance through the private sector. Every pregnant woman who registers herself with an Auxiliary Nurse Midwife in the village will be entitled to choose her health provider from a list of diverse accredited providers. The institution of her choice would provide her care during pregnancy and till childbirth, and the provider would be paid a fixed per capita payment in respect of all those who enrol for maternity care.

Whether this one would translate into excellence may vary from provider to provider in the private sector. But communities, if guided to pool their health expenses, would certainly be saving for a rainy day.