The addition of health insurance to microcredit products is increasingly popular; however, microfinance institutions lack sound evidence for use in guiding this expansion of services in a sustainable manner. This study complements other IPA research on the demand for hospitalization insurance in the Philippines and should provide important policy lessons on estimating optimal distribution channels for the delivery of public services. The research results also address the question of whether similar insurance products should be compulsory for microfinance clients.

We partner with Green Bank to evaluate the impact of providing access to national health insurance program (PhilHealth) among microfinance clients.  Anecdotal evidence from Green Bank field staff suggests that illness among clients and their families is one of the biggest causes of delinquency.  The PhilHealth program offers an opportunity to reduce clients' vulnerability to unexpected health shocks.  Green Bank clients are randomly assigned to one of three groups: offered the option to enroll in PhilHealth insurance (first treatment group); required to enroll in PhilHealth insurance (second treatment group); or not offered PhilHealth insurance during the course of the study (control group).

This study examines information asymmetries, impacts of insurance access on household wellbeing, informal insurance arrangements, and Green Bank's institutional outcomes.  Baseline data collection measures risk characteristics that might affect selection into PhilHealth membership and create information asymmetries.  Baseline and follow-up data collection enables us to measure changes in informal insurance arrangements, health outcomes, and risk-taking.