Introduction

• Universal Health Care (UHC) ensures quality health services for all, irrespective of ability to pay—a goal India has not yet achieved despite nearly eight decades since the Bhore Committee (1946).

• Recent expansion of state-sponsored health insurance schemes, notably PMJAY under Ayushman Bharat and various State Health Insurance Programmes (SHIPs), is being positioned as a path to UHC.

• These schemes primarily cover in-patient care with empanelled public and private hospitals, offering financial protection up to ₹5 lakh per household annually.

Expansion of Health Insurance Schemes

• PMJAY currently covers approximately 58.8 crore individuals with an annual budget of ₹12,000 crore; SHIPs cover similar numbers with combined expenditure of ₹16,000 crore.

• In some states like Gujarat, Kerala, and Maharashtra, SHIP budgets grew 8–25% per year (2018–2023).

• While these schemes provide immediate relief by widening hospital choices, they do not substitute for a comprehensive UHC framework.

Faultlines and Risks in Health Insurance

1. Promotion of For-Profit Medicine

   • Around two-thirds of PMJAY funds flow to private hospitals, which operate on profit motives.

   • Insurance schemes reinforce reliance on poorly regulated, profit-driven providers instead of strengthening public health.

2. Overemphasis on Hospitalisation

   • Schemes prioritize tertiary care, neglecting primary and outpatient care.

   • Rapid ageing and inclusion of elderly citizens may skew resources toward expensive hospital treatments.

3. Utilisation Challenges

   • Despite nominal coverage of 80% of the population, only ~35% of insured patients actually use the schemes.

   • Lack of awareness and complex procedures disproportionately affect marginalized groups.

4. Discrimination in Treatment

   • Private hospitals may prefer uninsured patients (higher charges), while public hospitals favor insured patients (receive payments), creating inequities.

5. Provider Complaints and Delays

   • Low reimbursement rates and delayed payments undermine trust in the system.

   • Pending dues under PMJAY alone amounted to ₹12,161 crore, causing some hospitals to withdraw.

6. Corruption and Fraud

   • Reports of fraudulent billing, unnecessary procedures, and denial of treatment exist.

   • Audit and monitoring mechanisms are largely ineffective, reflecting a lack of transparency.

Systemic Issues

• India’s health-care system remains profit-driven and underfunded: public expenditure on health was only 1.3% of GDP in 2022, compared with the global average of 6.1%.

• Health insurance cannot replace robust public health infrastructure; it is at best a short-term “painkiller”, not a long-term solution.

• Successful UHC models (Canada, Thailand) integrate social health insurance with universal coverage and non-profit providers—features missing in PMJAY and SHIPs.

Way Forward

• Expand and strengthen public health facilities to ensure accessible, quality primary, secondary, and tertiary care.

• Regulate private hospitals rigorously if included in insurance schemes.

• Increase public health spending to internationally comparable levels (~6% of GDP).

• Simplify scheme procedures and improve awareness among beneficiaries.

• Promote non-profit health-care providers within UHC frameworks.

Conclusion

• State-sponsored health insurance has expanded rapidly and provides short-term relief to poor patients but is no substitute for genuine UHC.

• India requires comprehensive reforms, including infrastructure development, primary care strengthening, and increased public investment.

• Health insurance can be a component of UHC but cannot mask systemic deficiencies.

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