Can Micro Health Insurance Reduce Poverty? Evidence from Bangladesh
This paper examines the impact of micro health insurance on poverty reduction in the rural areas of Bangladesh.
Support for supplementing microcredit with other services that improve program effectiveness has been increasing due to evidence that microcredit does not help the poorest of the poor. One such service is micro health insurance (MHI), which protects vulnerable people form health shocks. The Grameen Bank (GB) in Bangladesh added an MHI scheme in the late 1990s to protect its clients from health risks. This paper examines the impact of adding the MHI to GB’s microcredit program on poverty. It considers the following indicators relating to household poverty status:
- Household income;
- Stability of household income through food sufficiency and ownership of non-land assets;
- Probability of being above or below the poverty line.
The study uses data collected from a survey of 329 households in three areas where GB operates microcredit programs. Study results show that micro health insurance has a positive association with all of these indicators.
