Context
NITI Aayog recently published a road map document entitled “Health Insurance for India’s Missing Middle”.
About missing middle and provision in the NITI Aayog report
- 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.
- Left out segment: 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.
- Towards this, NITI Aayog recently published a road map document entitled “Health Insurance for India’s Missing Middle”.
- Primary role for private commercial health insurer: The report proposes voluntary, contributory health insurance dispensed mainly by private commercial health insurers as the prime instrument for extending health insurance to the ‘missing middle’.
Issues with the provision in the NITI Aayog report
- Narrow coverage: Government subsidies, if any at all, will be reserved for the very poor within the ‘missing middle’ and only at a later stage of development of voluntary contributory insurance.
- This is a major swerve from the vision espoused by the high-level expert group on UHC a decade ago, which was sceptical about such a health insurance model.
- No country has ever achieved UHC by relying predominantly on private sources of financing health care.
- Contributory insurance not best way: Evidence shows that in developing countries such as India, with a gargantuan informal sector, contributory health insurance is not the best way forward and can be replete with problems.
- Issues with low premium model: For hospitalisation insurance, the report proposes a model similar to the Arogya Sanjeevani scheme, albeit with lower projected premiums of around ₹4,000-₹6,000 per family per annum.
- This model is a little different from commercial private insurance, except for somewhat lower premiums.
- Low premiums are achieved by reducing administrative costs of insurers through an array of measures, including private use of government infrastructure.
- This model is vulnerable to nearly every vice that characterises conventional private insurance.
- Insufficient measures to deal with adverse selection: The report suggests enrolment in groups as a means to counter adverse selection.
- 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.
- Both these notions are likely to be far-fetched in practice, and the model is likely to be characterised by widespread adverse selection notwithstanding.
- OPD insurance on a subscription basis: 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.
- However, the 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.
- Clearly, this route is unlikely to result in any significant reduction of out-of-pocket expenditure on OPD care.
- Role of government: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.
Consider the question “What are the challenges in achieving universal health coverage? What are the issues with private sources financing health care to achieve UHC?”
Conclusion
The National Health Policy 2017 envisaged increasing public health spending to 2.5% of GDP by 2025. Let us not contradict ourselves so early and at this crucial juncture of an unprecedented pandemic.
