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Seguro Facultativo de Salud (Nicaraguan Social Security Institute)


In January 2007, the government of Nicaragua initiated a demonstration project that extended the Nicaraguan Social Security Institute’s (INSS’) health insurance program to informal sector workers using microfinance institutions (MFIs) as delivery channels.

Key program components

INSS contracts with for-profit, not-for-profit, and public sector health facilities called Clinics for the Insured (formerly Empresas Médicas Previsionales and referred to in this paper as EMPs). INSS purchases services from these facilities on a capitated basis. The INSS insurance provides all beneficiaries with a comprehensive package of preventive, diagnostic, and curative health services, from primary to specialist care. An INSS subscriber’s dependent children, up to the age of 12, are covered. During pregnancy and the postpartum period, the subscriber’s wife is also eligible for maternity services, such as delivery care.

In this program, insured individuals and eligible dependents pay a flat monthly premium for covered services. The monthly fee is higher in the first two months, at approximately US$171 per month, and falls to approximately US$15 per month thereafter. If a subscriber desires to dis-enroll, he or she continues to be covered during a three-month grace period after he or she has stopped paying for the insurance, before the affiliation is cancelled. No co-pays are charged at the time of service (as of 2007).

Emerging Lessons:

  1. Subsidies brought informal sector workers into the insurance program, but did not contribute to long-term retention.

  2. High premium (relative to income) is a common deterrent against enroling in any insurance scheme and needs to be addressed when designing insurance schemes to cover the poor.

  3. For informal sector workers, time and convenience costs matter almost as much as monetary costs.

  4. The INSS insurance had only modest impacts on already high use of family planning and maternal and child health services.

  5. Insurance reduced out-of-pocket expenditures for informal sector workers but not by enough to cover the cost of the premium for most individuals.

  6. Initial hopes that microfinance institutions (MFIs) could increase insurance enrollment and retention were not met.

  7. Segmentation of the informal sector may identify those lower income brackets most likely to use public sector resources.

Prior to January 2007, only formal sector workers and government employees in Nicaragua—representing 18.5 percent of the economically active population—were eligible for INSS health insurance. Individuals working in the informal sector, the self- employed, and the unemployed were not eligible. In 2007, the INSS health insurance package was made available for purchase by informal sector workers through a voluntary program known as Seguro Facultativo de Salud.