• Home
• What We Do
• Where We Work
• Resources
• News
• Data
• About

India

Making Health Insurance Work for the Poor

It is estimated that approximately 75% of health care expenses are borne by the household in India; whereas the government contribution to health is less than 20%. The public funding that is available is inequitable and skewed toward curative health care, which more often benefits the rich, while preventative health services that more often benefit the poor take a back-seat. National Health Accounts (NHA) showed that one-half to two-thirds of public health expenditure is spent on secondary and tertiary care. The World Bank estimates that for every Rs 1 spent on the poorest quintile, the government spends Rs 3 on the richest quintile. Out-of-pocket expenditures for health put families, particularly the poor, into very vulnerable situations. Over 40% of those that are hospitalized borrow money or sell assets to cover expenses. World Bank estimates show that after meeting hospital expenses, 25% of those hospitalized fall below the poverty line.

Current health insurance initiatives in India are diverse and rapidly changing as experience is gained in private, micro-, and government-sponsored health insurance practices. Several states have begun implementing or designing health insurance initiatives for large sections of their populations. Further, the International Labor Organization estimates that there are 90 micro-health insurance schemes scattered across the country. Despite this, it is estimated that only 10 percent of Indians are covered by some sort of financial protection for health care services.

The experience of many health insurance schemes in India is not encouraging. Key reasons for sub-optimal performance of these schemes include:

• Lack of clarity of objectives in implementing a health insurance scheme
• Inappropriate benefit design due to absence of beneficiary needs assessment
• Lack of health providers in rural areas
• Weak distribution and enrollment agency at rural level
• Virtual absence of scheme implementation agencies at grassroots level
• Adverse selection since schemes operate on voluntary rather than universal level
• Weak communication mechanism for generating awareness of schemes among beneficiaries

Health Systems 20/20 Activities in India

• Rashtriya Swasthya Bima Yojna (RSBY) implementation: Health Systems 20/20 is working with the government of Delhi to maximize effectiveness of the Delhi health program and implementation of this health insurance scheme for the poor.
• Critical illness package: The project is working with the Ministry of Health to strategize and design an expanded benefits package, which will extend benefits beyond the RSBY scheme to include higher-cost health conditions.
• HIV/AIDS and health insurance: The project is reviewing international experience in covering people living with HIV in broader risk pools and helping the government develop a road map for mainstreaming HIV/AIDS within insurance. Read the report.