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Health insurance for the poor

A $5.8 million loan to help El Salvador forge a consensus on a new approach to health insurance is the IDB's first under a new policy for flexible lending instruments.

Under the new policy, the IDB can use a rapid processing and approval procedure for loans up to $10 million for innovative operations. Such operations can also be executed according to an accelerated, 30-month maximum schedule. The policy, which was approved by the Bank last March, is designed to spur reform programs and facilitate learning and capacity building in priority areas in preparation for larger reform efforts.

The loan to El Salvador will help the country's Social Security Institute design, test, and evaluate ways to develop new approaches to health insurance and improve management to support the process of institutional change. The objective is to bring poor and vulnerable groups into the social security system and increase the accumulation of human capital among these populations. The consensus building process will involve all relevant stakeholders, including beneficiaries, employers, workers, and the unions representing employees of the Social Security Institute.

A pilot project will be carried out to expand basic health coverage to groups in the informal sector of the economy. Other pilot projects will be undertaken for the contracting of outpatient health services and the improvement of hospital management.

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