An article in the Sunday Times of India called Healthcare for a billion by Kiran Mazumdar Shaw reports that rural indebtness caused by illness is far greater than that caused by crop failure. The problem with this kind of indebtness for the poor is that often they have to go to moneylenders charging often 10% interest per day(!) to pay these bills resulting in long-term (or possibly lifetime) indebtedness and resulting extreme poverty.
She highlights a couple of success stories both governmental and private sector driven. The government in the south India state of Karnataka (capital is Bangalore) has a program called Yashaswini Health Insurance under which various co-ops receive insurance coverage for a range of surgical procedures for 60 rupees (about $1.50) per year. A private initiative, doctor Arogya Raksha Yojana is a more comprehensive insurance program covering surgeries, buy hospitalization, order medical consultations and medicines for just 120 rupees (about $3.00) per year.
She ends with a quote from Winston Churchill: “Insurance brings the miracles of mathematical probability to the rescue of the masses.”
If this statistic is accurate, then health insurance needs to be a top priority for the growing microfinance sector.