The Health Risks of the Poor and the Emergence of the Micro-Insurance Sector in India

The Terai or the “moist” land is the region found at the base of the Himalayas. Geographically referred to as a marshy land, abounded with grasslands, savannas and forests, it is also seasonally encumbered with heavy rainfall and floods. The villages located across rivers submerge into water and the local population, mostly belonging to the poor sections of the society suffer loss of livelihood and habitation ever year. One of the severe aftermath effects of such Monsoon-led floods is the unrestrained spread of diseases. The households in these vulnerable areas sell off their last meals to buy medicines, visit doctors and seek hospital care. As if part of a natural cycle, this situation keeps repeating every year.

In another village on a hill, just above the Terai region, there are people who flock to a local doctor, who is actually a practitioner of indigenous medicine. He is not a good healer. In fact, he works just like any other typical quack, offering “white-coloured” pills to all his patients, yet he is very popular. The reason is: he offers treatments to his patients on credit-basis.

Health risks are identified by the poor as the most critical challenges of life. They face other risks too, such as natural disasters, social unrest and economic losses, but the impact created by an illness over a poor household is more devastating than any other risk posed by socio-economic or natural factors. Productivity is reduced and opportunity for growth is lost. Studies have pointed out that nearly 40% of hospitalised patients sell assets or borrow money to afford treatment and an average of 24% fall further down the poverty trap in the process.

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