Health insurance coverage and its politics in India

The National Sample Survey Organization’s 2015 report highlighted that only 12% urban and 13% rural population is under any kind of health protection coverage

Representative Photo
Representative Photo
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Ashish Kumar Singh & Ranjit Kumar Dehury

The health of people is a concern for citizens of any country in the world. The formal provision of health care consists of preventive and curative healthcare for the people. In India, healthcare has been a neglected matter for many years which is reflected in the poor investment of the government with only 1.15 to 1.5 per cent of the total GDP.

Many developing countries and developed countries depend on the provision of health care by the government for their citizens to ensure universal health coverage (UHC) for the people. However, India was found to be far behind UHC due to a lack of financial provision to combat various disease conditions. In this backdrop to reduce the out-of-pocket (OOP) healthcare expenditure, countries come up with many plans and policies of Insurance coverage in various models, which enable the citizen to receive the essential healthcare services without much distress. Hence, health insurance funds are an option to address the issues of ill health and the creation of a healthy and productive workforce.

It is a known fact that despite the acknowledgment of UHC in India, nearly three-forth of the spending is borne by households. The National Sample Survey Organization’s 2015 report highlighted that only 12% urban and 13% rural population is under any kind of health protection coverage. As the saying goes, a long-pending court case and a health crisis are two factors that could destroy a family.

By 2018, 62.8% of India population did not have health insurance. One out of five households experiences catastrophic or impoverishing health expenses. A NITI Aayog report (2021) states that among those without health insurance, the families can afford to pay Rs 4,000-6,000 per year to protect their family from hospitalisation expenses. Whereas, most health insurance products entail an annual premium between Rs. 15,000-18,000 for a family of two adults (with 45 years age of the senior-most member) and two children for a sum of Rs 5 lakh as insurance coverage. In the case of health expenditure, about 26% of total health spending by rural households is covered through either selling the assets or borrowing. Moreover, OOP pushed about 3-6% of the population below the poverty line each year.

Of late, the Indian government tried various schemes of health insurance to cater to the marginalised sections of the society, though not all in the line of universal health coverage for the bulk of the citizens. There is a dire need to address the issues of the masses in India on health and well-being. To address this, the government adopted tokenism of providing the services in the form of health insurance and provision of care at different health centers.

Though the health insurance enables some citizens to have access to the health centers, especially in the private sector, it solves a minuscule of the issues. Many of the diseases are either not covered or it is difficult to access the health care at far off centers. The mere provision of health insurance would not help in solving the issues rather the creation of hard and soft infrastructure in the health sector would tide out the emerging diseases.

The capacity building in the health sector along with infrastructural up-gradation at government hospitals and facilitation of private-sector health care could help in the solution of the beleaguered health system in India. The recent shortages of doctors and Indians going abroad to study medicine are one of the burning examples of half-hearted manpower planning of the government with its incapable now-disbanded wings like the Medical Council of India (MCI).

Some of the health insurance schemes of the government help to a certain extent in solving the problem. The maximum coverage of Rs 30,000/family and Rs 5,00,000/family under Rashtriya Swasthya Bima Yojana, Pradhan Mantri Jan Aarogya Yojana respectively were very much popular in India.

According to The National Health Agency 10.74 crore poor rural families along with some occupational categories of urban workers’ families were enrolled in the PMJAY according to 2011 Socio Economic Caste Census. There are as many as more than 33 health insurance schemes of various coverage amounts per family by state governments to cater to the health insurance of the people. However, these schemes do not help much to achieve wholesome health care.

All the state-level schemes except a few were highly politically motivated to garner votes in a county of vote bank politics. The flaws of the scheme reported by various independent studies are unavailability of a proper bed, low coverage amount, important procedures not covered, administrative delay, unwillingness to be empaneled in the schemes by hospitals, low rating of beneficiaries, lack of clearance of the bill by government, red-tapism and many more issues of operationalization of the schemes. The federal structure of the Indian government many a time clashes with the provincial structure in the provision of insurance. Hence, the politics of the country becomes a hurdle in the process of implementation of health insurance to usher in good health among citizens.


It has been seen that the distribution of health insurance cards before general elections or local elections was done with much fanfare by the ruling political parties across India. The card is also functional for quite some time to gain the confidence of people. However, after the election is over, various shortcomings start appearing in the provision of healthcare while using these cards.

The providers and beneficiaries of health care face difficulty in settling bills resulting in much inconvenience. Many of the providers drop from the insurance system due to hardship in receiving the lawfully raised bills from the government. Despite being empaneled as a provider many hospitals refuse to conduct medical procedures leading to financial and operational hardship for the cardholders. The information asymmetry also forces the gullible patients with government insurance policies to get trapped into various problems in different parts of the country. Health insurance should not be a mere electoral gift to the people of India rather it should be an essential entitlement required for nation-building which should be free from politics.

What is needed is to design and implement mechanisms to ensure that benefits are maximized. The implementation process should be smooth and reduce the burden of households substantially. Given the market-based schemes and available government alternatives, the public healthcare system needs revitalization. The public sector should be incentivized to compete for the provision of services. If enough resources are provided, the public sector can provide universal access to healthcare services. Furthermore, there is a need to strengthen the monitoring and evaluation of health insurance schemes. The large presence of the private sector benefits from persuading individuals/households/beneficiaries in buying insurance, whereas the mediator/insurers make profits by reducing the utilization by the end-users. And last but not the least, the creation of a large and diversified risk pool with an emphasis on consumers’/beneficiaries’ awareness should not be ignored.

(Ashish Kuma Singh is a doctoral candidate of political science at the NRU-HSE, Moscow, Russia. Dr. Ranjit Kumar Dehury teaches at the University of Hyderabad, Telangana in the area of healthcare management)

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