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Milliman's insightful case study on health insurance micro-insurance schemes

In 2016, Milliman partnered with PharmAccess Foundation on an analysis involving the establishment of a health insurance pricing scheme in a state in an African country.

In 2016, Milliman partnered with PharmAccess Foundation on an analysis involving the establishment of a health insurance pricing scheme in a state in an African country. Milliman’s role in this initiative was to provide actuarial, clinical and financial review of PharmAccess’s modelling of the anticipated costs under the health insurance pricing scheme. PharmAccess’s role was to deliver advice to the state government’s Ministry of Health (MoH). Ultimately, it was the MoH’s responsibility to make final decisions on the benefit package and associated premium to charge.

Background: The development of the health insurance micro-insurance scheme (health scheme) is in response to recent legislation to establish a health scheme to provide access to quality and affordable healthcare for all state residents in the African region. The goals of this program are to be affordable, sustainable, customer-centered and easy to understand and administer. Two policies are anticipated to be available for purchase: an individual and a household policy. The household policy covers the main member, spouse and up to four children younger than 18 years old. For households exceeding a specified number of children, coverage for additional children is available.

Findings: 1. Throughout the development and refinement of the health insurance pricing model, we worked concertedly to ensure that the projections appropriately reflected the anticipated population, health status, treatment patterns and specific cultural influences in the state in Africa. As many of these characteristics will be specific for each population, it was critical to ensure that PharmAccess’s projections made appropriate provisions for each anticipated population characteristic. 2. In the health scheme, the state government determined that demand-side cost-sharing provisions would not be appropriate for a new program. Even though the long-term goal of the health scheme is mandatory coverage for the entire state population, the initial limited coverage of the program creates the potential for anti-selection, especially in the first years of the program.

Conclusion:A key takeaway from the health scheme project is that an international, interdisciplinary team with broad clinical and actuarial expertise is key to the success of a micro-insurance analysis. Because there is often limited data available for new micro-insurance schemes, it is critical to involve experts who can provide insight and feedback into the specific issues likely to affect the overall health benefit costs for a specific region and population.

 

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