304 Social Reinsurance: A New Approach to Sustainable Community Health Financing

for Health, the Philippines. Microinsurance units provide an opportunity to extend access to healthservices by spreading costs and risks over a wide group within a com-munity. Because there is an implicit allocation of resources from healthy to sick individuals and from wealthier to poorer households, community-based health insurance can contribute to equity in health care financing. Microinsurers also provide an opportunity to increase appropriate use of cost-effective health services by covering basic promotive and preventive care while facilitating access to necessary curative services (McPake, Hanson, and Mills 1993). This chapter identifies some of the market forces affecting development of microinsurers, discusses ways of creating a more favorable environment for them, and examines the potential market for reinsurance among microinsurers, high-lighting factors enabling or hindering growth of reinsurance. Alternative formats for reinsurance for microinsurers are also proposed. LINK BETWEEN MARKET FACTORS AND DEVELOPMENT OF MICROINSURANCE UNITS The number of microinsurers in developing countries has grown tremendously in recent years, as has interest in microinsurance. This growth is partly a response to fiscal situations in most public health systems that preclude universal coverage of the population. Another part can be attributed to the increasing involvement of grass-roots movements in health care delivery. There is little direct empirical evidence, however, about the factors impelling growth in the number of schemes or about the proportion of population covered by any particular scheme. Nor is it known whether these factors overlap or are entirely distinct. Nevertheless, factors that may be leading to growth should be identified. First, the extent to which microinsurance development and demand for community-based insurance schemes have traditionally responded to marke