Health Insurance

The implications of expanding government-sponsored health insurance schemes in India are analysed from a fiscal perspective. The experiences of two of the earliest and largest GSHI schemes of the country implemented in Andhra Pradesh and Tamil Nadu are examined. The results suggest that the expansion of the GSHI schemes may skew expenditure away from primary and secondary care towards tertiary care if the fiscal space is limited. A competitive public health system may help in containing costs and the corresponding fiscal burden. The effectiveness of public spending through such schemes is ambiguous.

An array of bottlenecks has ensured that the numerous health insurance schemes introduced over the years have failed to make any significant dent on the health sector. This article tries to assess these problems by using the “insurance cascade,” a framework that traces the steps from enrolling eligible households to ultimately delivering their benefits. The existing evidence suggests substantial bottlenecks across all cascade steps, with especially large gaps in beneficiaries’ awareness of how to enrol in schemes, what the schemes covers, and how to access scheme benefits.

The announcement of the National Health Protection Scheme provides us with an opportunity to see how its predecessor Rashtriya Swasthya Bima Yojana and other publicly funded health insurance schemes have fared so far. The experiences of PFHIS indicate that targeted health insurance coupled with a healthcare delivery system dominated by “for profit” private providers failed to address the issues of access and financial risk protection. They possibly displace resources that can be utilised for strengthening a public health system.