Banking on Health Expands Health Insurance to Informal Sector Workers in Nicaragua

In Nicaragua, health sector reforms have led to a significant improvement in access to quality health services, an improvement due to the government’s Social Security Institute (INSS) efforts to contract private providers in order to supply a range of health care services, including family planning and reproductive health.

In many ways, Nicaragua’s contracting out system is a model in Latin America. One of the limitations of this system, however, is that it only covers formal sector workers and their beneficiaries. Formal sector workers represent only 19% of the economically active population in Nicaragua, while the vast majority of workers are engaged in the informal sector, without access to the benefits of the INSS program. With funding from USAID/Nicaragua, the Banking on Health project, led by Abt Associates in association with its partners Banyan Global, ACDI/VOCA, Britan & Asociados, and IntraHealth International, has been assisting the INSS to design and implement a pilot project, extending INSS health insurance to informal sector workers.

On May 1, 2006, the President of Nicaragua, Enrique Bolaños, announced the pilot program to offer informal sector workers the same comprehensive package of health services previously only available to formal sector employees. The INSS will implement the pilot program in partnership with local microfinance institutions (MFIs), which already provide financial services to 300,000 of Nicaragua’s microentrepreneurs. Informal sector workers will be able to purchase the new INSS insurance and pay their monthly premiums at three MFIs in Managua or other banks. New informal sector subscribers to the health plan will benefit from the Banking on Health project’s continued technical assistance that is improving the coverage and quality of the health services provided under INSS coverage.

For example, Banking on Health recently helped the INSS develop clinical guidelines for the provision of voluntary family planning services and the prevention and treatment of breast and cervical cancers. Under the new guidelines, when a female client enters a health facility that contracts with the Social Security Institute, she will be automatically referred to a women’s clinic. Once there, she will be provided with voluntary cancer screening and information, as well as with access to voluntary family planning, counseling and services. The informal sector health insurance plan seeks to shift users who have the ability to pay for family planning and other primary health services away from the public sector, thus freeing resources and improving segmentation.