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Context
India has witnessed a rapid rise in health insurance schemes, but systemic weaknesses and risks have hindered progress toward universal health coverage (UHC) as envisioned by the Bhore Committee in 1946. Despite high theoretical coverage, India’s current insurance-driven model falls short of guaranteeing quality health care for all citizens regardless of their ability to pay.
Historical Context and UHC Definition
- The Bhore Committee Report (1946) defined UHC as guaranteed access to quality health care for every citizen, irrespective of financial status—a goal many countries have realized, but India still struggles with.
- Indian policy, instead of prioritizing public health infrastructure, has leaned heavily on insurance schemes like PM-JAY and various State Health Insurance Programmes (SHIPs), hoping to achieve rapid extensions in coverage.
Expansion of Health Insurance
- PM-JAY (2018) provided a ₹5 lakh annual cover per household for in-patient care, expanding to cover 58.8 crore people in 2023-24.
- State schemes complement PM-JAY, with nearly 80% of the population enrolled under combined schemes, and budgets increasing annually by 8–25% in major states.
- This focus on insurance “coverage” gives an impression of near-universal protection, but actual utilisation rates are much lower.
Systemic Risks in Health Insurance Models
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Underinvestment in Public Health
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- India spends only 1.3% of GDP on health, far below the global average of 6.1%, reflecting decades of neglect of public health infrastructure.
- Insurance-driven models reinforce commercial medicine without remedying the foundational deficits in public health.
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Profit Orientation and Private Sector Dominance
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- Nearly two-thirds of PM-JAY’s budget flows to private hospitals, entrenching profit-driven medicine while leaving regulation weak and haphazard.
- These patterns mirror global pitfalls where insufficient regulation fosters high costs, inequities, and questionable provider practices.
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Incomplete Coverage and Hospitalisation Bias
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- Most insurance policies cover only in-patient care, leaving outpatient and preventive services (crucial for broad healthcare access) neglected.
- With an ageing population, this hospitalisation bias risks overconsumption of expensive tertiary care, straining resources and budgets.
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Barriers to Effective Utilisation
- Despite reportedly high enrolment, only 35% of insured patients successfully utilise their coverage due to lack of awareness, procedural complexities, and discrimination.
- Private hospitals often prefer uninsured patients (who pay higher rates), while public hospitals favour insured ones for reimbursement incentives—creating inequities and discriminatory treatment.
Financial Strains and Provider Dissatisfaction
- Persistent arrears—PM-JAY dues exceeded ₹12,161 crore in 2023, outpacing its annual budget and causing over 600 hospitals to withdraw from the scheme.
- Providers face low reimbursement rates and excessive delays, leading to discontinuity in care and reduced participation.
Corruption, Fraud, and Ethical Issues
- Rampant corruption—over 3,200 hospitals flagged for fraudulent practices, including overcharging, denial of treatment, and unnecessary procedures.
- Ethical dilemmas arise from technical exclusions, focus on pre-existing conditions, and data privacy concerns, all disproportionately affecting vulnerable populations.
- Unregulated private firms often “skim” the market, targeting the middle class and neglecting lower-income groups, driving up costs for uninsured citizens and worsening inequity.
Comparative Perspective and Lessons
- Countries like Canada and Thailand successfully combine social health insurance with robust public infrastructure, universal coverage, strong regulation, and a focus on non-profit providers.
- India’s insurance schemes lack these safeguards, making them insufficient as a standalone path to UHC.
Way Forward
The rapid rise of health insurance in India provides some relief but creates new risks and distortions: profit-driven care, discriminatory practices, poor utilisation, and widespread fraud. Insurance alone is a fragile foundation for UHC. Achieving sustainable health security for all Indians requires massive investments in public health infrastructure, regulation, and primary care rather than reliance on insurance-based models.
Source: The Hindu
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