Time for India to rethink health insurance as Covid rips apart safety nets

 An insurance plan launched two years ago to help over 107 million people hasn't improved access to health care, say Duke University researchers.

Covid-19 related deaths in India are expected to double in the coming weeks. People across socioeconomic classes are being cremated en masse in large holes in the ground. The ordeal doesn’t even end with death. Medical bills are piling up, a burden large enough to tip working-class families into multi-generational poverty. Younger adults desperate for vaccines are effectively being forced to pay for them, while those most at risk aren’t adequately insured. The state’s threadbare safety net has all but collapsed.

In normal times, most Indians use savings, borrow and call on friends and family to pay for health care, assuming it’s accessible. Out-of-pocket expenses are among the highest in the world. More than 60% of the population isn’t covered by insurance. Government workers can get some protection under a few different plans, but most others, including the self-employed, pay for their own treatment. Costs are rising because of a growing dependence on private hospitals and clinics.

Two years ago, after several failed attempts at universal coverage, Prime Minister Narendra Modi’s administration unveiled what it called the world’s largest health insurance plan, targeting over 107 million people--the poorest 40% of the population. It was meant to be a better version of a decade-old policy that fell short in terms of the amount reimbursed and its cap on the number of people enrolled from one household. Under the new plan, families are covered for up to 500,000 rupees ($6,670) for medical procedures. Eligibility was widened and is based on several “deprivation” criteria in rural and urban areas.

Yet the new policy hasn't “effectively improved” access to health care, according to a working paper by Duke University researchers. To begin with, the eligibility criteria rely on a 10-year-old census and exclude many potential participants because of inconsistent data. What’s more, outpatient services, which account for 60% of out-of-pocket expenditure, aren’t included. Another area of concern is the program’s dependence on private hospitals. Finally, if the insurance did fully cover its intended beneficiaries, the cost would far exceed budget allocations.