A study on possible features of potential health insurance schemes for the urban informal sector in Delhi

Abstract

This study used descriptive and methodological approaches to explore the possibilities of introducing a health insurance scheme for the urban informal sector in Delhi. The data for the study was collected from manual workers engaged in informal sector in Khanpur area of Delhi. The analysis consists of three parts. In the first part, health insurance schemes for informal sector in few countries are reviewed. In the second part, ability to pay (ATP) and willingness to pay (WTP) models are developed to understand the factors that can influence the ATP and WTP of the sample households. In the third part, various possibilities of introducing a health insurance scheme for informal sector in Delhi is examined partly on the basis of the study findings and partly on other available information. The study showed that on an average the sample households spend 5.57 percent of their monthly income on health care. The per capita health expenditure per year is estimated as Rs. 255.06 (US $ 7.08). The wage loss due to illness in the households is found to be substantial. The logit regression analysis of ATP and WTP showed household income, percent of income spent on health care and savings are statistically significant factors influencing household ATP for health care. Whereas, education of head of households, family size, number of earning members, ownership of property and households priority on health care are statistically significant factors influencing WTP. Two alternative health insurance schemes viz; one voluntary and the other employer contributory scheme are designed. The study concludes that the feasibility of introducing an employer contributory scheme in Delhi is limited at the outset. The right path may be a voluntary health insurance scheme covering one region or certain occupational categories. Once the scheme became popular and relevant elements are found feasible, a moderate beginning may be made for employer contributory scheme, while the scope of voluntary insurance may be extended to self-employed.