An Impact Evaluation of the Provision of Health Insurance through Microfinance Networks in Rural India

This paper explores the potential market for health insurance among the rural poor in India. Despite recognition of the need for health insurance, there is little evidence on how the rural poor would respond to its availability. SKS Microfinance plans to introduce a mandatory health insurance policy for its microfinance clients in around 100 villages. SKS and its partners will conduct surveys on:

• Poor rural households' responses to negative health shocks in the absence of formal health insurance;
• Economic status and assets, means of livelihood, household expenses, eating habits, health status and household composition;
• Changes in household and individual outcomes one year after taking insurance.

By analyzing the randomized introduction of health insurance to microfinance clients in rural India, this project evaluates:

• Ability of poor households to adjust to health shocks;
• Leveraging of existing microfinance client networks for distributing insurance;
• Client retention, when purchasing health insurance is made compulsory;
• Mitigation of adverse selection by this method.