Microinsurance 360˚ Perspectives
The MicroInsurance Centre at Milliman believes insurance is one component of a broader risk management approach that is necessary for low-income populations to successfully manage their financial risks.
In rural Guatemala, as in much of the world, women often attend to their own health needs only after their many family responsibilities and financial priorities have been taken care of. Yet their needs are often quite critical, especially in preventive health. MILK partnered with the commercial insurer Aseguradora Rural to study the costs incurred and financial tools used by women with and without insurance to access a routine gynecological visit and treat basic problems. VivoSegura, Aseguradora Rural’s microinsurance product, covers preventive and curative gynecological services and provides a fixed sum for cancer treatment. We interviewed 25 women with VivoSegura and 31 women without women’s health coverage in Quetzaltenango who had visited a private gynecologist in the previous six months.
We found that while the product helped insured women reduce out-of-pocket spending for both preventive and curative services, they actually spent more after factoring in the annual premium cost. The greatest financial value of VivoSegura is in the cashflow smoothing it provides for the policyholders, which helps them finance basic care through monthly premiums. Interviews indicated that those with insurance have less financial stress when insurable events occur. Our study also revealed that the expected value of VivoSegura is mixed, since many clients who purchase the product attracted by specific coverage often do not use it promptly, while others do not even understand or know they have the coverage.
While part of VivoSegura’s objective is to offer service value and extend access to high quality private care to low-income women, slightly less than half of insured respondents reported greater access to private care and only 20% believed VivoSegura granted them access to better quality care than other solutions. Insurance coverage did seem to create positive behavioral incentives: insured women sought care sooner and after experiencing less severe symptoms than uninsured women. This positive healthcare seeking behavior was reversed for follow-up care, however, which often fell outside the range of product coverage.