Assesment of Health Microinsurance Outcomes in the Northern Areas, Pakistan

The Health Microinsurance (HMI) product is a voluntary private insurance policy developed by the Aga Khan Agency for Microfinance (AKAM) with support from the Bill & Melinda Gates Foundation (BMGF). The product, which is implemented in Pakistan by the First Microinsurance Agency (FMiA) is provided on a group basis and primarily covers the costs of in-patient treatment at network facilities of the Aga Khan Health Services, Pakistan (AKHSP), and at selected government and military hospitals on a cashless or reimbursement basis. The HMI distribution channels are small, community-based NGOs which are responsible for the marketing and sales of the product.

This baseline study was carried out as the insurance was being introduced for the first time to residents of the Ghizar district, a poor region of Pakistan. Most of the population in Ghizar, where health needs pose a critical financial risk, has few financial options for meeting hospitalization costs. In late 2008, the HMI was introduced to protect families from the catastrophic costs of health care. It is the only health insurance product available to the general public in this region. While the AKHSP network of health facilities is preferred overall as providing higher quality care, the higher costs of these fee-for-service facilities prevents most residents from accessing them.

This study was designed as the first part of a larger Outcomes Assessment which was to examine whether health microinsurance for low-income people leads to reduced out-of-pocket health-care costs and positive changes in health-seeking behavior and health outcomes of the insured. In addition, the outcomes assessment was to explore whether the insurance promotes change in the quality and quantity of care provided at the paneled hospitals. The baseline research afforded the opportunity to examine issues around access and purchase of the HMI by local consumers.