All about India

The insurance policies in India only covers hospitalisation and emergency costs. People living under the poverty line, especially those in rural areas, are unable to afford everyday healthcare costs, limiting the accessibility of healthcare to only those who are able to fork out out-of-pocket payments.

Besides shortcomings in the adequate provision of health-related services, the government of India also struggles with providing health insurance coverage. Only about 10% of the Indian population is covered by any form of social or voluntary health insurance. This select 10% is most often part of the organized labour sector, receiving coverage through government schemes for employees of certain organizations (Hegyi, N.A.). Insurance is important as it serves as a safety net, and is especially important to the poorest of the society. Insurance schemes help to ease the financial burden of health care costs, and ensure that health care is affordable to all. With universal insurance, the situation of poverty in India can potentially be improved and increase the affordability of health care to even the poorest of the population.

The existing health insurance schemes available in India can be broadly categorized as:
 

• Voluntary health insurance schemes

In the public sector, the General Insurance Corporation (GIC) and its four subsidiary companies (National Insurance Corporation, New India Assurance Company, Oriental Insurance Company and United Insurance Company) provide voluntary insurance schemes, the most popular of which is the Mediclaim policy
 

• Private-for-profit schemes

In this case, buyers are willing to pay premiums to an insurance company that pools similar risks and insures them for health related expenses. These premiums are calculated based on the susceptibility of buyers to certain illnesses.
 

• Mandatory health insurance schemes or government run schemes (namely ESIS, CGHS)

a) Employer State Insurance Scheme (ESIS)
This scheme was enacted in 1948, targeting power using factories employing 10 persons or more and other specified establishments employing 20 persons or more. It protects employees from loss of wages due to sickness, maternity, disability and death due to employment injury, at the same providing them with funeral expenses and rehabilitation allowance. These services are provided through network of ESIS facilities, public care centers, governmental organizations and is financed by employers, employees and the state government. Despite the well formulation of the plan, there are problem areas in managing this scheme. Due to the high turnover and low remuneration rate as compared to corporate hospitals, many posts in the medical field are vacant. There is low consumer satisfaction, possibly due to the low utilization of hospitals and rising costs. Thus, many call for this scheme to be revised.

b) Central Government Health Insurance Scheme (CGHS)
Established in 1954, this scheme covers employees and retirees of the central government and other specific establishments. Some benefits provided by this scheme include medical care, home visits/care, free medicines and diagnostic services. These services are provided through either private or public facilities with some specialized treatment. Although people benefitting from this policy do have to pay a certain amount of out-of-pocket payment, most of the expenditure is met by the central government. Despite the well thought out plan, this scheme has been criticized in terms of quality and accessibility. Subscribers have complained slow reimbursement and incomplete coverage for private health care and hence also call for this scheme to be revisited.
 

• Insurance offered by NGOs/Community based health insurance

Community based schemes are typically targeted at poorer population living in communities. Such schemes are generally run by charitable trusts or non-governmental organizations (NGOs). In these schemes the members prepay a set amount each year for specified services CBHI schemes suffer from poor design and management. Often there is a problem of adverse selection as premiums are not based on assessment of individual risk status. These schemes fail to include the poorest of the poor. They have low membership and require extensive financial support. Other issues relate to sustainability and replication of such schemes.
 

• Employer based schemes

Employers in both public and private sector offers employer based insurance schemes through their own employer (Anita, N.A.).