Micro-insurance

As America wanders around for solutions for health insurance, one idea has helped thousands throughout Asia and Africa. Modeled after microcredit, the idea of micro-insurance makes health insurance affordable to the poor. In some cases micro-insurance charges only a penny a day to cover a family.

Low cost insurance is a lot easier to do in Africa because they have many differences compared to the US health system. Malpractice lawsuits are almost non-existent, doctors make a much lower wage than in the US, and many hospitals are supported by the government.

From this Associated Press article that we found at the Washington Times, one of our favorite writers, Katharine Houreld describes micro-insurance further.

Even as the U.S. debates how best to insure its people against sickness, a type of health care financing is growing more popular in Africa: micro-insurance. Activists say it can help pay for health care for some of the billions of people in the developing world who cannot afford it.

"Poor people need health insurance; they deserve it. and it can be done," Nobel-prize winning economist Muhammad Yunus told the Associated Press.

His Grameen bank already provides health insurance to around half a million poor Bangladeshis, and Mr. Yunus wants to expand further by using the Internet to connect doctors to patients in remote areas.

Micro-insurance is defined as a product accessible to those earning less than $2 a day, who pay tiny weekly premiums of sometimes less than a cent. The policies usually cover all conditions — including pre-existing illnesses like HIV/AIDS and maternity costs — and are written in language that is easy to understand.

Some 14 million Africans use micro-insurance, and the number of African policyholders has increased by 80 percent in the last five years, according to a recent study by the International Labor Organization. The numbers are still a fraction of the potential market, but are growing rapidly as more organizations offer insurance products to the poor.
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But still, insurance can be a hard sell. It's difficult to persuade those struggling to survive to part with precious cash to pay for care that they may never need. For that reason, said World Health Organization specialist Varatharajan Durairaj, micro-insurance could help the middle classes and some of the poor, but not the most desperate.