Yeshasvini Trust, Karnataka - India (CGAP Working Group on Microinsurance Good and Bad Practices Case Study No. 20)

Publication Date: Nov 2005
Published by: CGAP Working Group on Microinsurance
Document Type: Case Study (PDF)

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Case study analyzing self-funded health insurance scheme

This case study on Yeshasvini Trust’s health insurance scheme has been written by Ralf Radermacher, Natasha Wig, Olga van Putten-Rademaker, Verena Müller and David Dror.

Yeshasvini's self-funded microinsurance scheme (i.e., not linked to any regulated insurance company) is quite new, but it is still very interesting for the following reasons: 

• Scale: The scheme reached 1.6 million (mostly) low-income persons in its first year of operations. After growth in the second year to 2.2 million, membership declined in Year 3 to 1.45 million largely because the premiums were doubled. 
• Institutional arrangement: The trust partners with cooperatives in Karnataka, which are quite prevalent in the state. Yeshasvini depends on the cooperative structure to provide information to members and to collect premiums. To handle such a large number of members, Yeshasvini has outsourced the administration of the scheme to a third-party administrator (TPA). The hospitals providing the care are primarily private, which have a good reputation for quality care. They agreed to participate in the scheme, even though they earn approx 30% less from Yeshasvini members than from other patients, because they have excess capacity. 
• Product design: The product is affordable to the poor (even with the recently increased premiums) because it focuses on high cost/low frequency events. Instead of providing basic health care, it covers 1600 surgeries. 
• Government involvement: The cooperatives' involvement in the scheme is partly due to the active role of the Karnataka Department for Cooperation, which has encouraged them to participate and to enroll a target number of members. The government has also partly subsidised the scheme during its initial years of operations--and the recent premium increase was intended to replace government subsidies.