Extending health coverage to ‘missing middle’

(MainsGS2:Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.)

Context:

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

Health insurance:

• NITI Aayog’s report “Health Insurance for India’s Missing Middle” highlights that at least 30 percent of the population, or 40 crore individuals – called the ‘missing middle’ – are devoid of any financial protection for health.
• NITI Aayog has suggested that the Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme be extended to cover a section of people commonly termed the ‘missing middle’ sandwiched between the poor and the affluent.
• 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’.

Government initiatives:

• The central government’s 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.
• Apart from AB-PMJAY and State-level government health insurance schemes, small segments of the Indian population are covered under social health insurance schemes and private health insurance.
• However, government subsidies 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 as the instrument of UHC and advocated a largely tax-financed health system albeit with private sector participation.

Ignoring the fundamental:

• The NITI report ignores few fundamental precepts despite knowing that no country has ever achieved UHC by relying predominantly on private sources of financing health care.
• 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.
• International precedents of contributory social health insurance models show important traits for example, significant levels of government subsidy to schemes; not-for-profit mode of operation; and some important guarantees for health.

Suggested models:

• The report has recommended three models for increasing the health insurance coverage in the country.
• The first model focuses on increasing consumer awareness of health insurance, while the second model is about “developing a modified, standardized health insurance product” like ‘Arogya Sanjeevani’.
• The third model expands government subsidized health insurance through the PMJAY scheme to a wider set of beneficiaries.
• Though the third model assures coverage of the poorer segments of the missing middle population, premature expansion of PMJAY can overburden the scheme.

Out-patient care

• The report acknowledges that OPD expenses comprise the largest share of out-of-pocket expenditure on health care, and concomitantly have a greater role in the impoverishment of families due to health-care expenses.
• The out-patient department (OPD) care insurance coverage includes doctor consultations, diagnostics, medicines, etc.
• 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.

Sharing the data:

• The report has also suggested sharing of the government scheme data with the private insurance companies.
• Government databases such as National Food Security Act (NFSA), Pradhan Mantri Suraksha Bima Yojana, or the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) for agricultural households can be shared with private insurers after taking consent from these households, the report said, suggesting an outreach strategy.

Expanding the penetration:

• 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.
• 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.
• Further, the report looks to attain the elusive UHC with few or no fiscal implications for the Government, which is an absurd idea.