Comparing India’s Healthcare Insurance Landscape with Global Models
India's population is covered under various health insurance schemes floated by the central and state governments, as well as private insurance companies. Together, these schemes cover approximately 70% of the total population, leaving 30% without any coverage. However, this estimate, based on a 2021 Niti Aayog report, does not account for overlap between schemes, meaning the actual number of uninsured individuals could be even higher.
This 30% uncovered group, known as the “Missing Middle,” primarily comprises middle-class families. They do not qualify for government schemes like Ayushman Bharat meant for the economically disadvantaged, nor can they afford the high premiums of private insurance. We will delve deeper into their unique challenges in an upcoming article.
Low government spending on public healthcare has pushed around two-thirds of patients toward private hospitals, leading to higher out-of-pocket expenses. In private hospitals, revenue typically comes from three main payor groups: cash-paying patients make up about 50%, government scheme beneficiaries around 30%, and private insurance holders approximately 20%. While these percentages vary by hospital, due to their size, level of care and availability of tertiary care facilities: rising healthcare costs affect all income groups.
China's Health Insurance Model
China has achieved near-universal health insurance coverage through three main schemes. The Urban Employment-Based Medical Insurance (UEBMI) is a compulsory scheme for formally employed urban workers and their families, covering about 20% of the population. The Urban Resident Basic Medical Insurance (URBMI), a voluntary scheme at the city level, provides coverage to unemployed urban residents, students, and the elderly, accounting for around 23% of the population. The New Rural Cooperative Medical Scheme (NRCMS) is a partially subsidized program for rural residents, covering about 80% of the population.
While these schemes ensure extensive coverage, challenges remain. For instance, efforts to merge URBMI and NRCMS faced obstacles due to differences in benefits and geographic implementation. Additionally, private insurance in China serves as a top-up for those seeking coverage beyond what these schemes offer.
Thailand's Health Insurance Model
In Thailand, the population is also nearly fully covered under three main schemes. The Civil Servant Medical Benefit Scheme (CSMBS) caters to government employees and their families, while the Social Security Scheme (SSS) covers private sector employees. The Universal Coverage Scheme (UCS), which is the largest, includes those not covered by the other two schemes, representing about 75% of Thailand’s population. UCS primarily benefits rural and low-income groups and offers both inpatient and outpatient care through public and private hospitals.
India's Health Insurance Categories
India’s health insurance landscape can be broadly classified into three categories: central government schemes, state government schemes, and private health insurance policies.
Central Government Schemes The most significant central government initiative is the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY). Launched in 2018, it provides ₹5,00,000 annual coverage per family on a floater basis, specifically targeting families identified as deprived in the Socio-Economic Caste Census of 2011. With coverage for around 50 crore people (36% of the population), it focuses on providing secondary and tertiary care.
Another central scheme is the Central Government Health Scheme (CGHS), which serves central government employees and their families. This scheme is not insurance-based but provides direct healthcare services through government-run dispensaries and hospitals. Approximately 40 lakh families are covered under this initiative.
State Government Schemes
State governments play a critical role in expanding healthcare coverage, particularly for workers in both organized and unorganized sectors.
The Employee State Insurance Scheme (ESIC) is a compulsory, contributory scheme for employees earning less than ₹21,000 per month in establishments with more than 10 employees. Both employers and employees contribute to the premium. Covering around 13.5 crore individuals (10% of the population), ESIC offers comprehensive coverage, including inpatient and outpatient care for workers and their families.
Additionally, many states have extended the benefits of AB-PMJAY or introduced their own health insurance schemes to cover a broader population. These state-specific extensions often target unorganised sector workers and low-income families, covering approximately 20 crore people (15% of the population).
Private Health Insurance Policies
Private health insurance policies, both individual and corporate, are voluntary and contributory. These policies are offered by private companies and public sector undertakings (PSUs) and include two main categories: personal health insurance and corporate group insurance.
Corporate health insurance, often provided as part of employee benefits, typically applies to those earning more than ₹21,000 per month. Private insurance schemes collectively cover around 9% of India’s population (approximately 11.5 crore people).
Despite significant growth in the private health insurance market—nearly doubling between 2014 and 2019—its penetration remains limited due to several challenges:
To improve trust and penetration, insurers need to simplify policies, improve transparency, and align their offerings with evolving healthcare needs. We'll discuss tips for choosing or renewing medical insurance in upcoming articles.
Conclusion
While 70% of India’s population is technically insured, the challenges don’t end there. Public hospitals often face resource constraints, leading to long waiting times for even basic procedures. Private hospitals, on the other hand, tend to prioritize cash-paying patients and those with private insurance over beneficiaries of government schemes.
It’s also important to view healthcare as a commercial activity rather than a purely social service. Today’s hospitals operate at global standards, requiring significant investment in infrastructure, technology, and skilled professionals. This shift necessitates a rethinking of how healthcare is financed and delivered in India.
Addressing India’s healthcare challenges requires action on two fronts: increasing coverage for the uninsured population and improving infrastructure to ensure equitable care for those who are already covered. We’ll explore these aspects in future articles, so stay tuned.
Let me know in the comments if you’d like me to write on specific healthcare topics—I’d love to share my experiences with you!