Is health insurance another “jumla”?

In his Budget speech, Finance Minister Arun Jaitley announced with much fanfare the launch of a “new” insurance scheme to protect “one-third of India’s population against hospitalisation expenditure”. Just another “jumla”, say people who have studied the document. They point out that the Rashtriya Swasthya Suraksha Yojana will replace the existing Rashtriya Swasthya Bima Yojana (RSBY) targeted at the below poverty line (BPL) population, and the annual cover per family will be expanded from Rs.30,000 to Rs.1 lakh. For senior citizens (age 60 years and above) belonging to this category, an additional top-up package of up to Rs.30,000 will be provided.

While it is recognised that “catastrophic health events are the single most important cause of unforeseen out-of-pocket expenditure which pushes lakhs of households below the poverty line every year”, Jaitley’s remedy for it seems too little and debatable. For one, instead of moving towards universalisation of health care and making it free for all, the present government is simply carrying forward what was started by the United Progressive Alliance government: privatisation of the health care system. Falling in the trap of the global catchphrase of UHC, where Universal Health “Care”’ has come to mean Universal Health “Coverage”, the Budget signals the trajectory of the Indian health care system in the days to come. Secondary and tertiary health care will gradually move out of the hands of the government and into the hands of private players. Primary health care, involving aspects such as immunisation, may as yet not be privatised completely as it is not very profitable.

But let us first look at the publicly financed health insurance schemes that were floated by the Centre and some State governments in the past few years: the RSBY, the Employees State Insurance Scheme (ESIS), the Central Government Health Scheme (CGHS), the Aam Aadmi Bima Yojana (AABY), the Janashree Bima Yojana (JBY) and the Universal Health Insurance Scheme (UHIS). Except for the RSBY, which is for BPL families, the rest are targeted at employees in the organised sector. These schemes have low coverage given the fact that the vast majority of workers are in the unorganised sector and are not covered. In the absence of proper data with the government on the functioning of these schemes, one has to rely on independent evaluations. An analysis of the RSBY in Maharashtra by Dr Soumitra Ghosh of the Tata Institute of Social Sciences (TISS) found that statistically the scheme had no significant effect on “catastrophic health expenditure”. Almost 50 per cent of families that held BPL cards were not poor, and only 30 per cent of those who had BPL cards were aware of the RSBY. Instead of discrediting the public health system, the government should strengthen it, Soumitra Ghosh said.

Notional and effective coverage

T. Sundararaman from TISS, Mumbai, and V.R. Muraleedharan at IIT Madras pointed to the gap between notional coverage and effective coverage and said: “The latter being represented by the proportion of hospitalisation cases that receive part or full reimbursement for their expenses. Only 1.2 per cent of the hospitalisation cases of the rural population and 6.2 per cent of the urban population received even part reimbursement. Even in States (Chhattisgarh, Gujarat and Kerala) known to have good coverage by the RSBY, the effective coverage in rural areas is less than 2 per cent and in urban areas it is less than 5 per cent. There is evidence that despite considerable effort in pushing for increasing insurance coverage, the benefits have not reached the poorest, nor is it efficient in [providing] financial protection. With all its considerable limitations, the poor seem to turn to subsidised care in public facilities as the only form of financial protection that is available—provided that, like in the case of childbirth, these services are available there.”

Then there are schemes launched by some States: Aarogyasri in undivided Andhra Pradesh and the Mukhya Mantri Swasthya Bima Yojana in Chhattisgarh. Aarogyasri, the then Chief Minister Y.S. Rajasekhara Reddy’s pet scheme, saw a huge enrolment drive. It caters to BPL families for procedures in cancer treatment and open-heart surgery. Although it has been reported to do better than the RSBY on paper, questions remain on its evaluation. “The evaluators go and meet people who have had access to treatment under this scheme and report the benefits people got. Stories of a large number of people who are unable to get any benefit from the scheme are never reported,” said Dipa Sinha, who teaches economics at Ambedkar University, Delhi. While it is true that people have benefited from these schemes, it is also true that big corporate hospitals, where these schemes are hugely popular, benefit more. In 2013, thousands of hysterectomies were conducted in Chhattisgarh seemingly to take advantage of the insurance benefit under the RSBY. In 2010, in Andhra Pradesh, too, the government had to tweak its insurance scheme to disallow hysterectomies in private hospitals after surveys revealed that uteruses of a number of beneficiaries were removed merely to claim higher insurance amounts. “When certain procedures are put on the list of insurance benefits, private hospitals tend to suggest those procedures instead of easier and less expensive procedures as is seen in the cases of hysterectomies or cochlear implants,” said Dipa Sinha.

The move towards privatisation of health care may not be a good idea also because private players do not like going to remote rural areas. “In the case of Chhattisgarh, 80 per cent of accredited hospitals are concentrated in Raipur. So, even if somebody covered by the RSBY falls ill in Bastar, they have to travel to Raipur for treatment,” said Dipa Sinha. This undermines the public health system and creates competition for patients between private hospitals and district hospitals. “Since insurance companies and their third party administrators have limited interest in awareness generation and enrolment, their role may be reviewed, and instead an independent public agency should be given responsibility for enrolment of unorganised sector workers. This would be a key step towards achieving universal population coverage,” according to Soumitra Ghosh.

Instead of following the United Kingdom’s system of a National Health Service, wherein the government sets up hospitals and takes care of treatment, India seems to be adopting the American model of insurance-based health care, which has been proved to be a failure. Especially in the United States of the post-2008 crisis period, where many people lost their jobs and their insurance coverage as it was linked to a job and the employer paid the premium.

Despite problems in India’s public health care system, a huge chunk of the population still relies on it. Instead of discrediting the system, it may be a good idea to strengthen it and make it more accountable.

Divya Trivedi