“Low government expenditure on health has constrained the capacity and quality of healthcare services in the public sector. It diverts the majority of individuals – about two-thirds – to seek treatment in the costlier private sector,” the NITI Aayog has said in its report on Health Insurance for India’s Missing Middle released on Friday.
According to the report, the Ayushman Bharat or the Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), launched in September 2018, and state government extension schemes, provide comprehensive hospitalization cover to the bottom 50% of the population or 70 crore individuals while around 20% of the population or 25 crore individuals are covered through social health insurance, and private voluntary health insurance.
“The remaining 30% of the population is devoid of health insurance. The actual uncovered population is higher due to existing coverage gaps in PMJAY and overlap between schemes,” the report said.
The report suggests designing a comprehensive product or improvement over the Arogya Sanjeevani such that the new products offers earliest coverage of all diseases, provides out-patient benefits and should be available at a third to half the cost of Arogya Sanjeevani which currently costs Rs 12,000 for a family of four.
According to the report, the government can play an important role to increase the uptake of health insurance and address some of the challenges. First, the government should improve consumer trust and confidence in health insurance through stronger regulatory mechanisms. Second, it can provide government data and infrastructure as a public good to reduce operational and distribution costs of insurers, it said.
“Finally, and most directly, the government can partially finance or provide health insurance,” it said, adding this can be done by expanding PMJAY coverage to the poorest segments of the missing middle population and leveraging National Health Authority’s PMJAY infrastructure to offer a voluntary contributory enrolment.
