If there is one big lesson from the debilitating impact of COVID-19 when the virus teared through India in April and May this year and threw up disturbing images of dead bodies floating on rivers and those of mass cremations, it is how the unprepared and under-insured could be severely hit in the face of a major health crisis. It is therefore with good reason that many experts and healthcare professionals have welcomed the new report by Niti Aayog, the Indian government’s think tank, on how India needs to address the needs of health cover to what it calls India’s “missing middle.”
The Niti Aayog report explains that the Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) launched in September 2018, and state government extension schemes, provide comprehensive hospitalization cover to the bottom 50 per cent of the population – around 70 crore individuals. Around 20 per cent of the population – 25 crore individuals – are covered through social health insurance, and private voluntary health insurance. The remaining 30 per cent 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. This uncovered population is termed as the missing middle.
The missing middle, it clarifies, is not to be seen as a monolith for it contains multiple groups across all expenditure quintiles. The missing middle is spread across all expenditure quintiles, in both urban and rural areas, though they are concentrated in the top two quintiles of rural areas, and top three quintiles of urban areas. The missing middle predominantly constitutes the self-employed (agriculture and non-agriculture) informal sector in rural areas, and a broad array of occupations – informal, semi-formal, and formal – in urban areas.
According to the report, “most segments of the missing middle can afford to pay Rs. 4,000 to Rs. 6,000 per family per year for hospitalization insurance – the price indicated through industry consultations – and Rs. 5,000 for covering out-patient benefits through a subscription model.”
While there is little doubt that the intent seems laudable and one that has been hailed by most who have looked at the challenges in the Indian healthcare arena, much depends on the roll out and the role that the government will play.
The Need To Cover All
Nachiket Mor, visiting scientist at the Banyan Academy of Leadership in Mental Health, a former banker and one who has looked at the Indian healthcare scenario closely and written extensively on this, calls it a move in the right direction. “In the journey to universal health coverage, this approach by the NITI Aayog is a move in the right direction fundamentally because India is a grossly underinsured market,” he says. But then, reflecting on the approach suggested in the Niti Aayog report, he feels, “the government should not delay in getting NHA (National Health Authority, which is responsible for implementing the PMJAY) involved and not wait for the private sector to first roll out low-cost insurance products.” Instead, he opines that “the NHA should offer a PMJAY kind of product to everybody right away and all could pay the premium and come onboard without any income criterion being applied. Instead of rolling enrolment, it could be restricted to a fixed period once or twice a year, to reduce adverse selection.”
Rare & Very Expensive Procedures
He also makes a point that “the current PMJAY product in which the government pays for a wide range of healthcare services at many hospitals for a restricted population, could also be revisited.” He feels “a product in which the government pays for a very narrow range of rare and expensive in-patient services, at a limited number of tertiary care hospitals, could instead be considered for the entire population.”
In other words, the PMJAY in its current formshould be opened-up to whole population for primary and secondary cover and to be paid by the people and so that people buy into it and do not wait till a tragedy strikes. This could be ensured by not having a rolling enrolment model but restricting it to a fixed time enrolment – either once or twice in a year. This apart, a new PMJAY product should be launched which is paid for by the government but open to everybody in the country. But this should be restricted to few medical procedures that are highly complex and very expensive procedures – say Rs 10 lakh or above available at select few tertiary care hospitals but then made available to all citizens. His views are in the context of the report pointing out that the initial thrust and focus should be on expanding private voluntary contributory insurance through commercial insurers. All apparently, to help build a large and diversified risk pool at low premiums. Then, follow this up by allowing “voluntary contributions to a PMJAY-plus product offered by NHA, or to ESIC’s existing medical benefits (in line with the proposed product in this report).”
Low Cost Top-Up Insurance
In fact, Dr Devi Shetty, the founder, chairman and executive director of Narayana Health and a leading cardiac surgeon has for long maintained that there is a need in India to create a financial intermediary offering a low cost health insurance and focused on specific spaces like a health insurance only for OPD (outpatient department) or one targeted only at surgeries (like under the Ayushman Bharat).” But, his view has been that over and above Ayushman Bharat, there should be a low cost top-up insurance and private sector should be encouraged to come up with such a low-cost top-up insurance cover. This will not just help spread the culture of taking insurance cover but will also make Ayushman Bharat very attractive for hospitals and leading to many more takers for the scheme. Dr Devi Shetty’s argument has been that how could say anyone earning Rs 60,000 a month, a ecent salary by itself, but perhaps challenging if he or she has to pay for five days of ICU care for a relative. “Our greatest strength is our numbers and therefore even if there is a small amount of premium it can be attractive because of volumes. These payments can get tax relief for the healthcare providers. Once people realise that with Rs 500 a year of premium payment a person can be covered for X number of procedures or say if the first two days of ICU care are covered then a cultural shift towards insurance will happen in the country,” he feels.