Health Insurance Schemes in India

Each time the American Presidential Election is around the corner, health insurance becomes a dominant topic of discourse across households and media outlets. Indian Parliamentary and Assembly Elections, unlike the American counterparts, are rarely contested on one defining platform. However, over the past few years, our netas have seemed to acknowledge the importance of fixing the ailing healthcare sector, which is marred by inefficient public service delivery.

As a panacea, a slew of national and state-wide health insurance schemes have been announced by the different governments across the nation in the recent past. These schemes are targeted for their BPL domiciles, as those with an annual income of <INR 72,000 often are the most vulnerable groups economically, socially and politically.

The rationale behind Government-Sponsored Health Insurance Schemes (G-SHIS) is that the most economically vulnerable of the population bears the catastrophic brunt of pricey healthcare in terms of expenses incurred and the associated opportunity costs. Since poor families are often one sick member away from complete destitution, it is imperative to revamp access to healthcare, focussing on reducing Out-Of-Pocket (OOP) expenditures by providing cashless treatments at hospitals. Notably, G-SHIS in India do not provide uniform coverage, but cover pre-existing conditions like asthma, diabetes or cancer.

Every health insurance scheme is predicated on common yet important pillars such as beneficiary coverage, funding mechanism, scope of benefits etc among others. A comparative analysis of each scheme based on these strands is useful in understanding the nature of health insurance and how it varies across the country.

Intended Beneficiaries

The RSBY targets the BPL population and unorganised sector labourers engaged in vocations identified by the Government of India. The RACHI and CHIS also cover BPL domiciles of their respective states. The MSBY serves both the BPL and the APL populations, but the latter has to pay nominal premiums. The MP-JAY also assures healthcare coverage to both BPL and APL families in the state, excluding only the White Ration Card holders. The BSBY on the other hand, is intended for the families identified under the National Food Security Act and the RSBY.

Funding Mechanism

The RSBY works by the Central and State governments sharing the burden of the premium payments. The RACHI is financed by the Andhra Pradesh Chief Minister’s Relief Fund and from taxes earmarked for liquor sales in the state. Interestingly, the corpus for the MSBY is primarily funded from the land lease paid by Tata Steel to the government of Jharkhand, while in Rajasthan the BSBY is financed by the State Health Budget.

Coverage

While zero OOP is the aim of all these schemes, the true spirit of it will be achieved only if shoe-leather costs are also covered. Some of these, such as the BSBY, also cover transportation and hospitalisation costs. Another common feature is that all schemes are available in empanelled private and government institutions. The only exception here is the MP-JAY that does not permit surgeries to be carried out in private hospitals.

The table below summarises the target populations and caps on the benefits of the currently active health insurance schemes

Salient Features

RSBY, notably, has developed networks of insurance companies that provide multi- state services in 8000+ empanelled hospitals; therefore, if a patient from Bihar needed to, he/she could seek care Uttar Pradesh under RSBY. In case of the RACHI, the 338 empanelled hospitals are expected to provide free outpatient consultations as well. Notably, the CHIS covers orphans, immigrant labourers and members of TN State Welfare Boards. Contrastingly, the MP-JAY scheme was originally conceived to provide relief to the distressed farmers of 14 districts in Maharashtra, and allows any farmer from these districts to avail the scheme irrespective of their economic status.

The Gold Standard – Rajiv Arogya Bhagya Scheme

The Karnataka State Government has in 2017, declared an Aadhar-linked Universal Health Coverage programme entitled the Rajiv Arogya Bhagya Scheme (RABS). It has been envisaged such that everybody in the state can avail of its benefits, by dividing them into two groups based on perceived income levels and occupations. Among those who do not require support, premium rates have been fixed at INR 700 for urban domicile and INR 300 for rural resident per person per annum. The capital investment is pegged at INR ~870 crore. Thus, around 10.5 million people will be covered fully by the government and 3 million will support themselves. RABS has integrated seven different insurance schemes including RSBY and Janani Shishu Suraksha Karyakram, in an attempt to streamline efforts.

This initiative is the closest any Indian government has come to providing almost- universal healthcare, and if proved to be a success, would be a useful model for the future. A nation- wide step towards universal health coverage is essential, as healthcare expenses often cause a considerable dip in the savings of an impoverished person and the resultant medical poverty trap is deleterious.

Sreelakshmi R. is a LEAD Associate at Ank Aha.