Academic journal article Journal of Health Population and Nutrition

Micro-Insurance in Bangladesh: Risk Protection for the Poor?

Academic journal article Journal of Health Population and Nutrition

Micro-Insurance in Bangladesh: Risk Protection for the Poor?

Article excerpt


Health services and modern medicines are out of reach for over one billion people globally (1). In many countries, including Bangladesh, barriers to public-health facilities force the poor to pay for healthcare out-of-pocket, often driving the poor further into poverty. Although a system of universal coverage may be ideal in many cases, there is a need for interim strategies to reduce out-of-pocket expenditure on health. Such strategies include mixes of community cooperative- and enterprise-based health insurance and social health insurance-type coverage for specific groups.

Micro-insurance is an emerging sector, strongly linked to the microcredit movement in Bangladesh. Despite the extensive reach of microcredit in South Asia, micro-insurance is still a nascent sector, with approximately 36.9 million lives in South Asia covered by some form of micro-insurance (2). There is substantial diversity in the programmes being offered in the subcontinent. This case study assessed the poverty and health impact of micro-insurance for health in Bangladesh, comparing these with the micro-insurance programmes for health in India.

This case study analysis of micro-insurance as a potential mechanism to address social exclusion draws from peer-reviewed and grey literature on micro-insurance for health. Two basic questions with regard to micro-insurance for health were addressed: (a) Does micro-insurance for health increase access to, and use of, basic health services among excluded populations? and (b) Does micro-insurance for health reduce the likelihood that health costs will be a catastrophic expense for marginalized households?

Given the constraints of the existing literature and the scope of this exercise, the analysis is indicative.


Micro-insurance is designed generally to address economic exclusion from resources, services, and/ or social protection in the cases of death, ill-health, or another adverse life-event. Micro-insurance for health is also designed to rectify spatial exclusion from health services and cultural exclusion of women from health services. This case study focuses on the extent to which the micro-insurance schemes for health address spatial and economic barriers to healthcare among marginalized groups.

Generally, people in rural areas in Bangladesh have lower access to public services and private-sector resources. The primary manifestation of spatial exclusion in healthcare is the lack of access to health services for women, rural people, and the poor. In Bangladesh, there are only 26 doctors and 30 hospital beds for every 100,000 people (3). Most of these resources are located in urban areas. Motivation for the micro-insurance schemes for health was, in many cases, driven by this spatial exclusion in access to health services. Microcredit organizations, for example, began providing micro-insurance for health because their members could not access state-run health clinics (4).

The poor have traditionally faced barriers to health services due to their poverty. Bangladesh has one of the highest rates of reliance on out-of-pocket health expenses in Asia. Out-of-pocket health expenses have negative consequences in the use of health services and overall living standards, primarily due to the unpredictable nature of out-of-pocket expenses (5). A significant portion of healthcare expenses in Bangladesh are privately funded, mostly as out-of-pocket expenses. Private sources finance 71% of national health expenditure; 88% of the costs for health in private sources is out-of-pocket expenditure (3) [Health costs in private facilities in Bangladesh comprised 88% out-of-pocket expenditure, 10% non-profit institutions serving households, and 0.8% pre-paid and risk-pooling plans (3)]. More than 70% of the out-of-pocket expenses are for medicines, which reflects the high prevalence of self-medication due primarily to lower access to services for constraints relating to income and distance (5). …

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