More a private sector primer than healthcare pathway

News: NITI Aayog recently released the document “health insurance for India’s missing middle”.

About the document
Read here: NITI Aayog Releases Report on ‘Health Insurance for India’s Missing Middle’
What are the existing health insurance programs?

Ayushmann Bharat Pradhan Mantri Jan Arogya Yojana(AB-PMJAY), Other state-level health insurance schemes and private health insurance programs.

The report proposes voluntary, contributory health insurance dispensed mainly by private commercial health insurers as the prime instrument for extending health insurance to the ‘missing middle’.

This is a major departure from the universal health coverage (UHC) vision, which had earlier proposed a tax-funded, government-backed universal health coverage plan. This also creates many challenges.

What does the report suggest for in-patient care? 

For hospitalization insurance, the report proposes a similar model as Arogya Sanjeevani Scheme, with a lower premium of 4000 to 6000 per family. But it will be provided by private insurance players. The reduced premium is not on account of government subsidy.

Challenges associated

From international experience, such plans have been successful when there is a government subsidy, a not-for-profit mode of operation, and some important checks and balances. NITI Aayog’s report ignores all these.

For example in Switzerland, though insurance is provided by private players, checks and balances are insured through legislation that provides for mandatory insurance, no cream-skimming, and risk discrimination.

The report suggests enrolment in groups. But in India, where even free of cost government health insurance for the poor has seen low penetration, such models are likely to fail.

What does the report suggest for outpatient care?

Outpatient care comprises the largest share of out-of-pocket expenditure on healthcare. The report proposes OPD insurance with an insured sum of Rs.5000 per family per annum.

Challenges associated

However, this will work on a subscription basis, requiring families to pay the entire insured sum in advance. This runs counter to the notion of universal healthcare, as it does not lead to any cost savings for the individuals.

Why is this report flawed?

UHC should involve a strong and overarching role of government. However, the report seeks to expand the footprint of private health insurance providers.

There is a need to move in the direction of National Health Policy 2017 which envisaged increasing public health expenditure to 2.5% of GDP. This amount should also be used to provide government-funded health insurance benefits to the missing middle.

Source: This post is based on the article “More a private sector primer than healthcare pathway” published in The Hindu on 18th November 2021 

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