This paper analyses the demand for Micro Health Insurance (MHI) in rural Bangladesh by
estimating the Willingness to Join (WTJ) and the Willingness to Pay (WTP) behaviour for an
expanded version of the existing Micro Health Insurance (MHI) package of Grameen Kalyan
(GK). A survey was conducted on about 4,000 randomly selected households in 120 villages
drawn from seven districts. We chose 20 locations consisting of 10 programme and 10
control areas, each of which was adjacent to a programme area. We used a variant of the
bidding game approach with an open-ended follow up question to elicit WTP. The results show
that overall WTJ is 54 per cent and average WTP on the part of households who
expressed WTJ the package (BDT406±171) are both quite low. The multivariate results
show that a number of individual, household and village attributes including gender,
knowledge about health insurance, economic factors, an episode of child delivery in the
household and flood in the village, and location of household influence respondents’ decision
to join the package as well as WTP. In view of the evident indifference to the GK type MHI
coverage, and wider evidence cited in the recent literature, one inescapable conclusion may
be that financial solvency for private heath insurance targeting the poor may remain a distant
goal.