While private healthcare represents 81% of all health expenditure in India, less than 15% of the population is covered by health insurance, meaning that they are paying out of their own pockets. Ill-health therefore often means a choice between financial hardship and forgoing treatment.

Public health services are unpopular. They are sometimes located far away, have long waiting times, high rates of staff absenteeism and not always the highest levels of care.

Like any other insurance scheme, community-based health insurance (CBHI) systems allow people to protect themselves against future illnesses or accidents that may have a substantial financial impact. When organised at a community level, the scheme is designed for local circumstances and is managed by locals.

Packages and premiums

The CBHI India project introduced such schemes in three areas in two Indian states to assess whether the pooling of risk in this way increases healthcare coverage and financial protection.

Three features made the CBHI scheme unique, according to Ellen van de Poel, senior researcher of the Institute of Health Policy and Management in the Netherlands, the project coordinator:

• the community was able to choose the package that made sense locally, helped by the project team, which provided guidance on trade-offs between benefits and costs;
• there were no subsidies, while premiums depended on the benefit package chosen (in-patient/out-patient care, laboratory tests, drugs etc.);
• the local community managed the scheme, including the processing of claims, with support of local partner institutions.

To implement the schemes, the team worked with NGOs with experience of supporting households in the three regions. Key to the process were pre-existing micro-credit self-help groups – units of 10 to 20 women living in the same village who decide together on how much money to save for a certain period and who give each other credits from these common funds. These groups usually receive training and support from NGOs.

The target group for the insurance scheme was any household with at least one woman registered as a member of a self-help group.

Uptake and drop-out

Initial uptake – at 23% – may seem low, but was higher than that of most voluntary schemes, says van de Poel. She believes this was due to the project’s awareness-raising campaign, which even included a short Bollywood-style film. Allowing subscribers to choose a package also created a feeling of involvement.

But the drop-out rate was also quite high. Two years after scheme began, only about 20 % of the initial enrolees were still members.

While the result was disappointing, it gave important insights into why schemes such as this are unlikely to work.

“Some people were unhappy because the out-patient healthcare providers were not providing good care,” explains van de Poel.

Each of these care providers received a fixed amount per patient. As this amount was quite small, it limited their ability to provide the same level of care as when patients paid themselves. Some patients actually felt that they received lower levels of care than they had done without the CBHI scheme. Some patients were also given fewer drugs or asked to pay a second time for care. They therefore felt they did not get good value for their money.

These problems could potentially explain the high drop-out rates and the scheme’s relatively low impact.

In support of subsidies

“The project showed that schemes without subsidies, targeting poor households, are not the best way to universal health coverage,” says van de Poel. “The benefit packages chosen were quite shallow and quality of care was not sufficiently monitored.”

This insight into their limits is extremely valuable as many developing countries are currently implementing such schemes, seeing them as a way to universal health coverage when public funds are already stretched to the limit.

“We consider this negative result to be very useful,” says van de Poel. “There are very few studies that can actually evaluate the causal impact of such schemes.”

The CBHI India team is currently awaiting publication of its impact paper and will then present recommendations based on its work through the project website, social media and international conferences.

At the time of writing, the CBHI scheme was still operating in one of the three communities targeted by the project.