[Editorial Analysis] More a private sector primer than health-care pathway

Mains Paper 2: Health
Prelims level: Universal health coverage
Mains level: Significance of health insurance schemes in India


• NITI Aayog recently published a road map document entitled “Health Insurance for India’s Missing Middle”. However, to say the least, the report confounds all hopes and expectations of a credible pathway to universal health coverage (UHC) for India.

About India’s UHC System:

• The Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY): The central government’s flagship health insurance scheme, the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), aims to extend hospitalisation cover of up to ₹5 lakh per family per annum to a poor and vulnerable population of nearly 50 crore people.

• Other Insurance Programs: State-level government health insurance schemes.

• High-income citizens: small segments of the Indian population are covered under social health insurance schemes and private health insurance.

• Problem of the Missing Middle: Covering the left out segment of the population, commonly termed the ‘missing middle’ sandwiched between the poor and the affluent, has been discussed by the Government recently.

The NITI report: “Health Insurance for India’s Missing Middle”

• Coverage through the Private sector: It proposes voluntary, contributory health insurance dispensed mainly by private commercial health insurers as the prime instrument for extending health insurance to the ‘missing middle’.

• Government subsidies minimal: if any at all, the government subsidies will be provided only for the very poor within the ‘missing middle’.

• Earlier a high-level expert group on UHC, a decade ago, advocated a largely tax-financed health system albeit with private sector participation.

• Out-patient care (OPD) insurance coverage: OPD includes doctor consultations, diagnostics, medicines, etc, which comprise the largest share of out-of-pocket expenditure on health care. The report proposes an OPD insurance with an insured sum of ₹5,000 per family per annum, and again uses average per capita OPD spending to justify the ability to pay.

• For hospitalisation insurance: It proposes a model similar to the Arogya Sanjeevani scheme.

About the Newer version of Arogya Sanjeevani scheme proposed:

• It will have lower projected premiums of around ₹4,000-₹6,000 per family per annum (for a sum insured of ₹5 lakh for a family of five).

• There would be a standard benefit package for all, and the insured sum will be between ₹5,00,000 and ₹10,00,000.

• Insurance will be dispensed largely by commercial insurers who would compete among themselves.

• Low premium achieved by: reducing administrative costs of insurers through an array of measures, including private use of government infrastructure, and possibly by switching to low-powered modes of physician payments.

Problems of the Private sector-led approach:

• Government sector is necessary for UHC: No country has ever achieved UHC by relying predominantly on private sources of financing health care.

• India has a big informal economy: with a gargantuan informal sector, it is difficult for most to make a regular premium payment for health insurance. Contributory health insurance is not the best way forward and can be replete with problems.

• Problems with newly proposed Arogya Sanjeevani model: low premiums are not achieved on account of government subsidies or regulation alone.

• Problems of conventional private insurance: Problems in settling Insurance claims and often not all diseases are covered in the fine print of the Insurance agreement, which makes them un-useful when the need requires.

• Problematic model of assessment of premium affordability: The prevailing per capita expenditure on hospital care is used to reflect affordability of hospital insurance, and thereby, a possible willingness to pay for insurance. It is important to remember that even free-of-cost government health insurance for the poor has little penetration in the country, despite a nearly two decade-long legacy.

• Problems with OPD insurance: It 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. This is the last thing one would equate with UHC.

• No fiscal implications assumed: the report looks to attain the elusive UHC with few or no fiscal implications for the Government, which is an absurd idea by any stretch of the imagination. The National Health Policy 2017 envisaged increasing public health spending to 2.5% of GDP by 2025.

Way Forward:

• International examples of checks and balances: For instance, in Switzerland, despite relying predominantly on private insurers and a competitive model of insurance, certain important checks and balances exist: benefits are etched in legislation; basic insurance is mandatory and not-for-profit; cream-skimming and risk-discrimination are prohibited. These have not been discussed in the NITI report.

• Strengthening the Government healthcare system: many regions in India do not have hospitals nearby to redeem those insurance products.


• The NITI report defies the universally accepted logic that UHC invariably entails a strong and overarching role for the Government in health care, particularly in developing countries.

• Rather than plot a pathway for UHC in India, the report is more about expanding the footprints and penetration of the private health insurance sector.


Prelims Questions:

Q.1) With reference to the Kartarpur Sahib Corridor, consider the following statements:

1. The Gurdwara Darbar Sahib, also known as Gurdwara Kartarpur Sahib, is located in Pakistan’s Narowal district across river Ravi.

2. Guru Nanak Dev, the first Sikh Guru had arrived in Kartarpur between 1520 and 1522 and spent the last 18 years of his life there.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer: C

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