Student Dissertation

Agency : State Sponsored Health Insurance Schemes; Sustainability; Health Insurance Schemes

Objective : • To provide an outline of design features of various state sponsored health insurance schemes currently being implemented in the country. • To document the challenges and cross cutting issues those impede sustainability of state health insurance schemes • To provide recommendations for future sustainability of Schemes

Background : Global experience, both in highly industrialized countries as well as in low- and middle- income economies clearly demonstrate the importance of achieving universal coverage through either a purely tax- based regime or social health or a mix of both. Although India followed a mix of these strategies since 1950s, the penetration of health insurance remained low. Only 21.62 crore people, or 17 per cent of the total population, were covered by health insurance at the end of March 2014. The country’s public financing for health care is less than 1 percent of the world’s total health expenditure, although it is home to over 16 per cent of the world’s population, the World Bank had estimated. Families meet almost 70 per cent of their health expenses out of their own pockets, placing considerable financial burden on poor households, often pushing them deeper into poverty. To offer financial protection against catastrophic health shocks to the poor, several state governments took the initiative to roll out their own state financed health insurance schemes since 2003. The recently launched Government Sponsored Health Insurance Schemes are a new form of mobilizing government resources in an under financed system while pioneering a new set of design features and institutional arrangements to govern, allocate, and manage the use of these resources. These schemes target BPL and/or APL population and informal sector. The BPL/APL lists, however, vary across schemes. These schemes, their design and coverage features are the main subject of the study. Based on a systematic review of state sponsored health insurance schemes for vulnerable population, the objective of the study is to assess these existing state health insurance schemes for vulnerable population that would enable to gain insight into the emerging issues and challenges facing these schemes. The continuance of various innovative health insurance schemes ultimately hinges on the financial sustainability of the scheme and the imperfect market mechanisms of private health care provision may bleed health insurance schemes. Sustainability of the schemes is a matter of concern for all stakeholders, therefore this study was undertaken in order to produce a road map for future health insurance programmes.

Methodology : • Type of Study: Analytical Study • Location of Study: Reliance General Insurance Co. Ltd • Data Collection Method: Data collected from secondary sources-scheme websites, published articles, and available assessment reports and analysis on challenges and issues facing the existing state health insurance models those would impede their sustainability

Findings : The state sponsored scheme face challenges of enrollment issues, gaps in benefits coverage, ineffective monitoring of system, lack of quality, information asymmetry, malpractices of private providers, misaligned package rates, rising burden of ambulatory care and service delivery issues in public health facilities that need to be addressed.

Recommendations : India’s health sector is expanding in several directions at once, not all of which is planned or regulated. India needs to act soon to avoid the chaotic and inefficient development of its health system. On the supply side, central and state governments are increasing financial allocations to public delivery through the National Rural Health Mission (NRHM), and this has contributed to a major extension of public facilities. On the demand side, and as documented in this report, the GOI has introduced a national insurance scheme for the poor, and more than a handful of states have already significantly increased allocations to health through recently launched GSHISs. The idea is to move toward greater use of social or government-sponsored health insurance as a source of pooled financing. Given the high levels of informality and poverty in India, this will not be easy. India needs a vision of a health financing system that delivers value for the money, provides financial protection, and allows real access to


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