As per the Bhore Committee Report (1946), universal health care (UHC) means quality health care for all, irrespective of ability to pay.

• Nearly eight decades later, India is nowhere near this basic goal of human development.
• An illusion is being created today that UHC can be achieved by expanding health insurance.

Growth of State-Sponsored Health Insurance

• Introduction of PMJAY: The Pradhan Mantri Jan Arogya Yojana (PMJAY), launched in 2018 under Ayushman Bharat, provides health coverage of ₹5 lakh per family per year.
• State-level programmes: Most States have launched their own State Health Insurance Programmes (SHIPs), which are largely modelled on PMJAY.
• Coverage under PMJAY: In 2023–24, PMJAY covered 58.8 crore individuals with a budget of about ₹12,000 crore.
• Coverage under SHIPs: State Health Insurance Programmes together covered a similar number of people with a combined budget of around ₹16,000 crore.
• Total expenditure: The total budget for both schemes comes to approximately ₹28,000 crore, which, though relatively small, is growing rapidly.
• Rising State budgets: In States like Gujarat, Kerala, and Maharashtra, the SHIP budgets have been increasing at a rate of 8% to 25% annually in real terms since 2018–19.

Key Issues with India’s Health Insurance Schemes

• Promotion of For-Profit Medicine
  • Dominance of private hospitals: Nearly two-thirds of PMJAY’s budget is spent on private, profit-oriented hospitals.
  • Shift without real increase: Studies show that the scheme has not increased hospitalisation rates but has diverted patients towards private hospitals.
  • Profit motive issue: Since the profit motive in health care is problematic without strong regulation, health insurance strengthens the private sector’s dominance instead of correcting it.
• Tilt Towards Hospitalisation
  • Focus on inpatient care: Health insurance schemes mainly cover in-patient care while neglecting primary and outpatient care.
  • Neglect of primary health services: This focus on hospitalisation weakens the case for investment in accessible, low-cost primary health services.
  • Risk from elderly inclusion: The inclusion of elderly citizens in PMJAY, combined with an ageing population, may divert funds disproportionately towards expensive tertiary care.
• Low Utilisation Despite High Coverage
  • Official coverage claims: Official figures suggest that about 80% of the population is covered under PMJAY and State Health Insurance Programmes (SHIP)
  • Actual usage rate: However, surveys show that only 35% of insured hospital patients were actually able to use their insurance benefits in 2022–23.
  • Reasons for low utilisation: The low utilisation is caused by poor awareness and procedural hurdles, particularly for disadvantaged groups.
• Discrimination Between Patients
  • Private hospital bias: Private hospitals tend to prefer uninsured patients because they can charge higher fees than insurance reimbursements.
  • Public hospital bias: Public hospitals prefer insured patients since they receive reimbursements for their treatment.
  • Resulting inequality: This dual behaviour results in discrimination against both insured and uninsured patients and sometimes leads to pressure to enrol in insurance on the spot.
• Provider Complaints
  • Complaints of low rates: Many hospitals complain of low reimbursement rates under these insurance schemes.
  • Delays in payment: More importantly, they face long delays in receiving payments, with pending dues under PMJAY alone amounting to ₹12,161 crore, which is greater than its annual budget.
  • Hospitals opting out: As a result, 609 hospitals have withdrawn from PMJAY since its inception.
• Corruption and Abuse
  • Fraudulent activities: The National Health Authority has flagged 3,200 hospitals for fraudulent activities under PMJAY.
  • Types of irregularities: Reports indicate that irregularities include denial of treatment, charging insured patients extra, and conducting unnecessary procedures to exploit the scheme.
  • Weak monitoring: Weak monitoring mechanisms and a lack of transparency, reflected in the absence of published audit reports, allow such abuses to persist.

Larger Structural Issues

• Profit-driven system: India’s health-care system is profit-driven because of chronic under-investment in public health facilities.
• Low public spending: According to the World Bank’s latest World Development Indicators, public expenditure on health was still as low as 1.3% of GDP in India in 2022, compared with a world average of 6.1%
• Temporary solution: Health insurance schemes act as a temporary painkiller for systemic issues that require deeper reforms in public health infrastructure.

Lessons from Global Experience

• Successful global models: Countries like Canada and Thailand successfully use social health insurance as part of their UHC frameworks.
  • These models work because they ensure universal coverage and rely heavily on non-profit providers.
• India’s gap: India’s PMJAY and SHIPs do not have these crucial features and therefore cannot deliver UHC effectively.
  • Limits of insurance-driven care: India cannot achieve UHC on the foundation of insurance-driven private health care.

Way Forward

• Need for higher investment: The country must substantially increase public investment in health facilities and ensure the strengthening of primary care services.
• Requirement of accountability: Stronger regulation, better transparency, and robust monitoring mechanisms are essential to ensure accountability.

Conclusion

UHC cannot be achieved without a serious effort to address this deficit and transform health-care standards in the public sector. 

• Some Indian States are moving in that direction, with encouraging results, but immense gaps remain. 
• Health insurance is little more than a pain killer for a system that needs proper healing.

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