More a private sector primer than health-care pathway

The Hindu     18th November 2021     Save    

Context: NITI Aayog recently published a road map document entitled “Health Insurance for India’s Missing Middle”.

Key points from “Health Insurance for India’s Missing Middle” report by NITI Aayog

  • Extending health insurance to the ‘missing middle’(between the poor and the affluent): Through voluntary, contributory health insurance dispensed mainly by private commercial health insurers.
  • Government subsidies will be reserved for the very poor within the ‘missing middle’ and only at a later stage of development of voluntary contributory insurance.
  • Insurance will be dispensed largely by competitive commercial insurers: For hospitalisation insurance, the report proposes 
    • A model similar to the Arogya Sanjeevani scheme, with lower projected premiums of around Rs 4,000-Rs 6,000 per family per annum (for a sum insured of Rs 5 lakh for a family of five). 
    • There would be a standard benefit package for all, and the insured sum will be between Rs 5,00,000 and Rs 10,00,000. 
  • Report acknowledges out-of-pocket OPD expenses comprise the largest share of expenditure on health care, and have a greater role in impoverishment of families.

Hindrance in pathway to universal health coverage (UHC) for India

  • Excessive reliance on private sources for financing health care: UHC is elusive with few or no fiscal implications for the Government but current health policy is relying predominantly on private sources of financing health care. 
  • Gargantuan informal sector where contributory health insurance can replete with problems.
  • Policy defects: Further policy action like road map document entitled “Health Insurance for India’s Missing Middle” is vulnerable to  every vice that characterises conventional private insurance.
    • Report proposes a model similar to the Arogya Sanjeevani scheme that is a little different from commercial private insurance, except for somewhat lower premiums.
  • Little penetration of free-of-cost government health insurance: for the poor in the country, despite a nearly two decade-long legacy.
  • Absence of suitable government subsidies or regulation: Low premiums proposed on “Health Insurance for India’s Missing Middle “are achieved by reducing administrative costs of insurers without any accountability on part of government.
  • Adverse selection of target groups while implementing health insurance scheme.
  • Issues with out-patient department (OPD) care insurance coverage: which includes doctor consultations, diagnostics, medicines, etc.
    • OPD insurance is envisaged on a subscription basis, which means that insured families would need to pay nearly the entire insured sum in advance to obtain the benefits.
    • Heavy out-of-pocket expenditure on OPD care.
    • Individuals indifferent to most OPD insurance scheme, as it restrict choice of health-care providers.

Way forward

  • Implementation of contributory social health insurance models: With significant levels of government subsidy to schemes; not-for-profit mode of operation; and some important guarantees for health.
  • Proper checks and balances to regulate private insurers and a competitive model of insurance like Switzerland where 
    • Benefits are etched in legislation; basic insurance is mandatory and not-for-profit; cream-skimming and risk-discrimination are prohibited. 
  • Policy action: Increasing public health spending to 2.5% of GDP by 2025 as envisaged in National Health Policy 2017.
    • Enrolment in groups to counter adverse selection in health insurance. 
    • Affordability of hospital insurance, and thereby, a possible willingness to pay for insurance.
  • Integrated and coordinated pathway of care: Through low-powered physician payment modes.

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