Health Insurance in India: Growth, Risks, and the Road to UHC
Context:
- Universal Health Care (UHC), envisioned by the Bhore Committee (1946), remains largely unrealised in India even after eight decades.
- Health insurance schemes like the Pradhan Mantri Jan Arogya Yojana (PMJAY) and State Health Insurance Programmes (SHIPs) have expanded formal coverage to over 80% of the population.
- However, these insurance-driven models raise questions about equity, sustainability, and the long-term future of public health infrastructure.
1. Growth of Health Insurance in India:
- PMJAY (2018): Provides ₹5 lakh coverage per household per year for inpatient care, covering 58.8 crore individuals (2023–24).
- State Health Insurance Programmes (SHIPs): Most states run parallel programmes, collectively covering a similar population with budgets around ₹16,000 crore.
- Combined Expenditure: Total annual spending on PMJAY and SHIPs is approximately ₹28,000 crore, growing at 8–25% in real terms (2018–2024).
- Coverage vs Utilisation: Despite extensive coverage, only 35% of insured hospital patients utilised these schemes (HCES 2022–23).
2. Key Fault Lines in Health Insurance Expansion:
a. For-Profit Medicine Bias:
- Nearly two-thirds of PMJAY funds go to private hospitals, reinforcing commercialised healthcare.
- Weak regulation leads to overcharging, unnecessary procedures, and ethical compromises.
b. Neglect of Primary Care:
- Insurance funding is skewed towards hospitalisation, leaving primary and preventive services underfunded.
- Rising tertiary care costs risk crowding out rural PHCs and OPD services, especially with an ageing population.
c. Utilisation Challenges:
- Awareness gaps: Many beneficiaries do not know how to use coverage.
- Private hospital reluctance: Low reimbursement rates discourage treating insured patients.
- Marginalised groups face greater barriers.
d. Discrimination in Care:
- Public hospitals often prioritise insured patients for extra funds.
- Private hospitals prefer uninsured patients, as billing generates higher revenue.
- Results in inequity within the healthcare system.
e. Financial Sustainability & Provider Exit:
- Pending PMJAY dues exceed ₹12,161 crore, surpassing the annual budget.
- Over 600 hospitals have exited PMJAY due to reimbursement delays.
f. Fraud & Corruption:
- 3,200 hospitals flagged for fraud (ghost patients, inflated bills, unnecessary surgeries).
- Weak audits and opaque scheme portals worsen misuse.
3. Structural Risks for UHC:
- Underfunded Public Health: Public expenditure on health is 1.3% of GDP (2022) vs global average of 6.1%.
- Profit-Driven System: Insurance schemes strengthen private sector dominance without improving quality.
- Exclusionary Tendencies: Despite high coverage, out-of-pocket expenditure remains among the highest globally.
4. International Comparisons:
- Thailand, Canada: Social health insurance integrated within UHC is non-profit, universally accessible, and strongly regulated.
- India: Insurance is targeted, profit-oriented, and poorly regulated, differing significantly from successful international models.
5. Policy Way Forward:
a. Strengthen Public Health Infrastructure:
- Expand primary health centres, diagnostics, OPD services, and rural health workforce.
- Prioritise preventive care over hospitalisation-focused funding.
b. Regulate the Private Sector:
- Enforce standard treatment protocols, price caps, and monitoring of empanelled hospitals.
c. Improve Utilisation & Awareness:
- Launch community outreach and digital literacy programmes.
- Simplify claims processing and strengthen grievance redressal.
d. Ensure Financial Sustainability:
- Guarantee timely reimbursements and consider direct budgetary allocations over insurance intermediaries.
e. Move Towards True UHC:
- Raise public health expenditure to 2.5% of GDP (National Health Policy 2017 target).
- Transition from insurance-driven patchwork to publicly funded, universally accessible healthcare.
Conclusion:
- Schemes like PMJAY and SHIPs provide temporary relief but risk institutionalising a profit-driven, hospitalisation-heavy system.
- True UHC requires:
- Robust public investment in primary care
- Regulation of private providers
- Equity-focused reforms
- Without these measures, health insurance remains a painkiller, not a cure, for India’s ailing healthcare system.
Source : The Hindu
