Rise and Risks of Health Insurance in India

Definition and Impact of Universal Health Care

• Universal health care (UHC) should be guaranteed to all community members, regardless of their ability to pay.

• Health insurance schemes, such as PMJAY and SHIP, have grown rapidly in the last decade, providing relief to poor patients when public facilities are overcrowded or substandard.

Risks of Health Insurance Schemes

• Health insurance promotes for-profit medicine, with two-thirds of the PMJAY budget spent on private, profit-oriented hospitals.

• It tilts the health-care system towards hospitalisation, reducing investments in primary and outpatient care.

• There are serious utilisation problems, with only 35% of insured hospital patients able to use their insurance in 2022-23.

Implications for India’s Health-care System

• The combined coverage of PMJAY and SHIPs is as high as 80% of the population, but many people are unaware of the scheme or how to use it.

• There is no strong evidence linking PMJAY or SHIPs with a substantial reduction in out-of-pocket health expenditure.

Discrimination in India’s Health Insurance Schemes

• Private hospitals often prefer uninsured patients due to higher commercial charges for healthcare.

• Public hospitals also prefer insured patients due to financial benefits.

• Health-care providers have complaints about health insurance, including low reimbursement rates and long delays.

• The National Health Authority revealed that pending dues under PMJAY alone amount to ₹12,161 crore, more than the scheme’s entire annual budget.

• Health insurance schemes are prone to corruption and abuse, with reports of eligible patients being denied treatment, private providers charging insured patients, and unnecessary procedures being performed to milk the scheme.

• The system is profit-driven, resulting in a poor way of arranging health care and failure to expand and improve public health facilities.

• India’s profit-driven health-care system reflects decades of severe under-investment in public health facilities.

• Public expenditure on health in India was as low as 1.3% of GDP in 2022, compared to a world average of 6.1%.

• UHC cannot be achieved without addressing this deficit and transforming healthcare standards in the public sector.

India healthcare coverage trends is important topic for Civil service exam (WBCS).

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