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By Dripto Mukhopadhyay
Healthcare
Insurance
in India
A Few Concerns
T
he National Health Policy, 2017 envi- with scanty fund available for healthcare sector
sioned 1.5 lakh health and wellbeing development, total funds that remained unspent
centres to bring health care system was significantly high. Except the last couple of
closer to locations where people live. A years, unspent funds was nearly 20 per cent of the
budget of 1200 crore was allocated for this flagship total fund (Fig. 2). This puts a question on the au-
programme. Admitting that lakhs of families in thorities about their true intention of proactively
India borrow or sell assets to receive indoor treat- developing healthcare in the country, which is
ments at hospitals, the Indian Finance Minister perhaps the most important development param-
stated during the January 31, 2018 budget speech eter. It is obvious that while the basic healthcare
that the “Government is seriously concerned facilities are given less importance compared
about such impoverishment of poor and vulner- to many other sectors, health insurance would
able families. Present Rashtriya Swasthya Bima hardly figure in governments’ agenda, at least in
Yojana (RSBY) provides annual coverage of only reality. Let’s look at the current health insurance
30,000 poor families. Several state governments sector.
have also implemented/supplemented health pro-
tection schemes providing varying coverage. My Health insurance sector in India
government has now decided to take health pro- To understand the current scenario and pos-
tection to more aspirational level. We will launch sibilities of health insurance sector in India it is
a flagship National Health Protection Scheme to pertinent to understand types of health expense
cover over 10 crore poor and vulnerable families coverage one avails at present. Only 28.7 per
(approximately 50 crore beneficiaries) provid- cent households are privileged enough to avail
ing coverage upto 5 lakh rupees per family per any kind of health coverage—disaggregated as
year for secondary and tertiary care hospitalisa- 28.9 and 28.2 per cent for rural and urban areas
tion.” If implemented, this reportedly will be the respectively. As evident from Fig 3, among the
world’s largest government funded healthcare households covered under any health scheme,
programme. In the backdrop of this, the article about 93 per cent in rural areas and 80 per cent
attempts to provide an assessment of current situ- in urban India are covered by governmental
ation regarding Indian health insurance market schemes. State health insurance scheme and
and likely implications of externalities that are RSBY are the two government schemes that pro-
required to make intentions of the government, a vide maximum coverage to both urban and rural
success. areas. Health insurances purchased from private
The above figures suggest one key aspect companies (by households) are as low as 8.5 and
clearly. Though, both the Centre and the state 1.8 per cent in urban and rural areas respectively
governments, always claim health to be a criti- covered under any health scheme.
cal component of planning, reality is far from it. Equally skewed distribution is observed in rela-
As Figure 1 suggests, public health expenditure tion to wealth index. The National Family Health
as percentage of GDP was far below many other Survey (NHFS) shows that except the topmost
countries of the world. More importantly, even quartile of wealth group, for rest of the quartiles
1.08 Community
Despite the 0.9 Urban
1.30 Health insurance 0.5 Rural
importance the Indian
government puts on Reimbursement 3.7
2.65 0.5
health as a component from employer
3.1 of planning, public Other through 3.8
3.26 health expenditure employer 0.7
as a percentage of 4.1
3.49 GDP has remained Any other
3.4
3.69 far below many other Central Government 8
countries. Health Scheme 3.3
3.83
Other privately 8.5
4.17 purchased 1.8
South Africa 4.24 Employee State 10.6
Insurance Scheme 1.9
7.58
Rastriya Swastha 19.5
8.28 Bima Scheme 41.3
State Health 45.9
Source: Economic Survey 2015-16 Insurance Scheme 50.2
0 10 20 30 40 50 60
Fig. 2: Per Cent Unspent of Total Grant Total funds that
remained unspent Only 28.7 per cent of Indian households have the
18.52 19.68 19.76 was significantly monetary means to avail health coverage. The numbers
high even in can be broken down to 28.9 per cent for rural and 28.2 per
10.09 the scenario of cent for urban areas. Among households availing health
low funds being schemes, government schemes provide coverage to 93
3.32 allocated for the per cent in rural areas and 80 per cent in urban areas.
healthcare sector.
Source: National Family Health Survey (NFHS-4), 2015-16,
2012-13 2013-14 2014-15 2015-16 2016-17
International Institute for Population Sciences,
Source: Controller General of Accounts Mumbai, December 2017.
Fig 4: Per cent Distribution of Households Covered under any Health Scheme/Insurance by Wealth Index
Rastriya Swastha
Health Scheme
Central Government
State Health
Insurance Scheme
Other privately
purchased
Community Health
Insurance
Other through
employer
Reimbursement
from employer
Any other
Source: National Family Health Survey (NFHS-4), 2015-16, International Institute for Population Sciences, Mumbai, Dec 2017.
80
60
70
coverage without quality services is as good as
Source: National Family Health Survey (NFHS-4), 2015-16,
no health cover. As shown in Fig 3 and Fig 4, out International Institute for Population Sciences, Mumbai,
of 28.7 per cent households where at least one December 2017.
Himachal Pradesh
Punjab
Uttarakhand
Haryana Arunachal
Delhi Pradesh
Sikkim
Rajasthan Uttar Pradesh Assam Nagaland
Bihar
Meghalaya Manipur
Tripura
Jharkhand Mizoram
Gujarat Madhya Pradesh West Bengal
Chhattisgarh
Odisha
Maharashtra
per cent of rural population go to private hospitals than that of government hospitals. Since the large
for their treatment. number of households cannot avail treatment in
The NSSO report also shows that on an average public hospitals due to various reasons, they need
the treatment cost in case of hospitalisation is to opt for private hospitals under compulsions.
INR 18,268—INR 14935 for rural and INR 24436 Therefore, not only does a large number of people
for urban areas. Figure 7 presents the expense incur four times higher treatment cost, but it is
scenario of treatment in public and private hos- devoid of any financial assistance as opposed
pitals. In both rural and urban areas, the average to treatment in government hospitals. This ex-
costs in private hospitals are four times more penditure is but obviously met either from their