Health Insurance Schemes in India

Pradhan Mantri Jan Arogya Yojana (PMJAY) and State Health Insurance Programmes (SHIPs) aim to expand health coverage in India. However, they reveal challenges in achieving equitable Universal Health Coverage, especially for vulnerable populations.

Health Insurance Schemes: Current Trends

Expanding Coverage: PM-JAY and SHIPs jointly cover nearly 80% citizens.
Growing Budgets: Combined outlay reached about ₹28,000 crore in FY 2023–24.
Rising Spending: SHIP allocations increased 8–25% annually since 2018.
Low Utilisation: Only 35% insured patients used benefits under PM-JAY/SHIPs.
Public–Private Split: Public hospitals form 51% empanelment but capture only one-third payouts.

Role of Insurance Schemes in Achieving UHC

Inclusive Coverage: PM-JAY and SHIPs cover nearly 80% of India’s population, widening access for vulnerable groups (NHA).
System Relief: Over 20,000 empanelled hospitals under PM-JAY reduce congestion in tertiary care (PMJAY Annual Report).
Infrastructure: Insurance funds helped upgrade district hospitals and 1.5 lakh Health & Wellness Centres (MoHFW).
Poverty Reduction: PM-JAY prevented catastrophic health expenditure for over 10 million beneficiaries in FY 2022–23 (NITI Aayog).
Social Legitimacy: Public insurance reinforces healthcare as a citizen entitlement, aligned with Ayushman Bharat’s principles.

Strengthening Primary & Secondary Healthcare for UHC

Preventive Care: Strong primary healthcare reduces disease burden and hospitalisation. E.g., 1.5 lakh Health & Wellness Centres under Ayushman Bharat.
Reduced OoPE: Accessible secondary hospitals prevent catastrophic spending. E.g., Kerala have less than 2% population facing catastrophic health expenditure (NSSO).
Rural Access: Over 70% of India’s rural population is served by functional PHCs and CHCs (NHM).
System Resilience: During COVID-19, PHCs and district hospitals managed 60% of testing and triage, easing tertiary hospital load (MoHFW).
Insurance Support: Efficient primary and secondary care reduces dependency on insurance claims and costly tertiary care. E.g., PM-JAY claims show only 35% utilisation in rural areas (NHM).

Government Initiatives

Ayushman Bharat – PM-JAY: Provides ₹5 lakh annual cashless hospitalization for over 50 crore poor.
Rashtriya Swasthya Bima Yojana: Covers BPL families with smart card–based cashless hospitalization.
Employee State Insurance Scheme (ESIS): Offers healthcare, maternity, and disability benefits to formal sector workers ≤₹21,000/month.
State Health Insurance Schemes: Ensures affordable tertiary care for economically weaker sections.

Structural Challenges in Insurance Schemes

Private Bias: Public funds primarily flow to profit-driven, weakly regulated private hospitals.
Hospitalisation Skew: Insurance favours costly inpatient admissions, neglecting basic primary care.
Payment Delays: PM-JAY dues of ₹12,161 crore forced service suspension, eroding system credibility.
Unequal Treatment: Private hospitals discourage insured patients, while public hospitals favour them.
Fraud Cases: Over 3,200 hospitals flagged for false claims, undermining the scheme’s integrity.

Reforms for Equitable Health Financing

Public Spending: Raise health expenditure from 1.9% GDP to 2.5% under the NHP-2017 target.
Gatekeeping: Adopt Thailand-style capitation with gatekeeping, routing to primary centres first.
Non-Profit: Implement Canada-style non-profit hospital funding to curb private profiteering.
Timely Payments: Ensure NHA clears claims within 30 days to retain provider trust.
Fraud Control: Deploy AI-based monitoring and audits to detect and prevent false claims.
Fraud Control: Deploy AI-based monitoring and audits to detect and prevent false claims.

Conclusion

“Universal health coverage is the ultimate expression of fairness and equity,” said Dr. Tedros Ghebreyesus. With the vision of “Securing the Unsecured,” strong primary and secondary care plus effective insurance ensures access, reduces out-of-pocket spending, and protects vulnerable populations.

Reference: The Hindu | PMFIAS: Universal Health Coverage in India

PMF IAS Pathfinder for Mains – Question 325

Q. The health-poverty trap in India cannot be eliminated through insurance-based models alone. Discuss the role of strengthening primary and secondary healthcare systems in achieving Universal Health Care. (250 Words) (15 Marks)

Approach

Introduction: Write a contextual introduction about India’s health-poverty trap and insurance by mentioning the facts.
Body: Discuss how insurance alone fails the health-poverty trap, the role of primary and secondary healthcare systems in achieving universal health care and the way forward.
Conclusion: In conclusion, mention the government vision with a way forward.