Why in News: State-sponsored health insurance schemes such as PMJAY and SHIPs are expanding rapidly, but concerns have been raised about their profit-driven orientation, low utilisation, fraud, and neglect of primary healthcare, highlighting that they cannot substitute for a strong public health system in achieving Universal Health Coverage.
Introduction
- Universal Health Care (UHC), as envisioned by the Bhore Committee (1946), aimed to guarantee quality health care for all, irrespective of ability to pay.
- However, India has increasingly relied on State-sponsored health insurance schemes such as Pradhan Mantri Jan Arogya Yojana (PMJAY, 2018) and various State Health Insurance Programmes (SHIPs).
- While these schemes provide short-term relief, they raise structural concerns regarding equity, efficiency, and sustainability.
Growth of Health Insurance in India
- PMJAY coverage (2023–24): 58.8 crore individuals with a budget of ~₹12,000 crore.
- State Health Insurance Programmes (SHIPs): Cover a similar number with ~₹16,000 crore budget.
- Combined coverage: Close to 80% of population, but effective utilisation remains low (only 35% of insured patients could avail benefits).
- Annual growth rate of budgets (2018–24): 8%–25% in States like Gujarat, Kerala, Maharashtra.
Positive Outcomes
- Financial Relief for the Poor: Helps patients access treatment when public hospitals are overcrowded.
- Expanded Choice of Hospitals: Empanelment of both public and private facilities.
- Political Momentum: Creates visible welfare deliverables, especially for vulnerable sections.
- Reduced Catastrophic Expenditure (to an extent): Insurance reduces upfront costs in emergencies.
- Integration of States into a National Framework: PMJAY provides a common standard for insurance-based health security.
Risks and Challenges
Profit-Driven Healthcare Expansion
- Nearly two-thirds of PMJAY budget spent on private hospitals.
- Leads to over-treatment, unnecessary procedures, and inflated bills.
- Weak regulatory oversight aggravates misuse.
Neglect of Primary Care
- Focus on hospitalisation overshadows preventive and outpatient care, which is crucial for long-term health system strengthening.
- Risk of disproportionate spending on expensive tertiary care, especially with rising elderly population.
Low Utilisation & Awareness Gaps
- Despite large coverage, only 35% insured hospital patients used schemes (2022–23 survey).
- Lack of awareness, complex procedures, and discouragement by private hospitals hinder access.
Discrimination and Access Barriers
- Private hospitals prefer uninsured patients due to higher charges.
- Public hospitals sometimes prioritise insured patients for revenue, creating inequities.
Provider Grievances & Financial Bottlenecks
- Pending dues under PMJAY: ~₹12,161 crore (exceeding annual budget).
- Over 600 hospitals have withdrawn due to low reimbursements and delays.
Fraud and Corruption
- NHA flagged ~3,200 hospitals for fraudulent claims.
- Reports of denial of care, illegal charging, and unnecessary procedures.
- Weak audit mechanisms, lack of transparency on portals.
Structural Concerns
- Public Health Spending: India spends 1.3% of GDP (2022, World Bank) vs. world average of 6.1%.
- Fragmentation of Health Financing: Insurance schemes absorb increasing share without strengthening public health infrastructure.
- Exclusionary Model: Insurance-led health care neglects uninsured, under-utilised rural poor, and preventive services.
Comparative Perspective
- Thailand, Canada: Social health insurance contributes to UHC but rests on non-profit ethos and strong primary care backbone.
- India’s model: Predominantly profit-driven with weak regulation, creating distortions.
Way Forward
Re-prioritise Primary and Preventive Care
- Strengthen Health and Wellness Centres (HWCs), immunisation, maternal-child health.
Increase Public Health Expenditure
- Raise spending to at least 2.5% of GDP (National Health Policy target).
Tighten Regulation of Private Sector
- Transparent pricing, standard treatment guidelines, strict monitoring of empanelled hospitals.
Improve Utilisation & Awareness
- IEC campaigns, simplified claim procedures, grievance redressal mechanisms.
Strengthen Public Hospitals
- Expand infrastructure, staff, and diagnostics to reduce dependence on private players.
Enhance Transparency & Accountability
- Publish audit reports, settlement data, and fraud monitoring publicly.
Conclusion
Health insurance schemes like PMJAY and SHIPs act as short-term painkillers, but cannot substitute a robust public health system. Without significant investments in public facilities, regulation of the private sector, and focus on primary care, India risks widening inequalities instead of achieving true Universal Health Coverage.
UPSC Relevance
GS Paper II:
- Issues relating to development and management of health services.
Mains Practice Question
Q. “Health insurance schemes like PMJAY provide temporary relief but cannot be the foundation of Universal Health Coverage in India.” Critically analyse, highlighting the risks and suggest a way forward.