Developing targeted health insurance options by pooling the risks and providing protection from catastrophic expenditures to population belonging to lower income groups has been one important HCF policy response in many countries. The central ministry and various state governments in India have developed and implemented RSBY, and other government supported health insurance (GSHI) programme targeted at BPL and other populations.
As per the IRDA annual report of 2015-16, about 273 million persons are covered by various GSHI schemes in India. This may be considered as one of the major intervention globally bringing a vast pool together in a targeted manner to address health finance challenge. The total annual spending on these schemes is about Rs 2,500 crores per annum for which the contribution comes from both central and state governments. The net incurred claim ratio of these schemes for the year 2015-16 has been around 109 percent.
One of the objectives of this intervention is to ensure equity in health care financing. The performance of these schemes across states is, therefore, of interest from equity viewpoint. The gross premiums collected indicate that 56% of these premiums are accounted for by four states which are Maharashtra, Tamil Nadu, Karnataka, and Gujarat. The rest of India accounts for 44% of the total premium. These four states which have 56% of premium share roughly account for 25% of the total population of the country. Maharashtra which has 9% of the population, has 31% share in premiums. IRDA annual report does not provide detailed data for all states in India, and therefore the analysis here is restricted in some sense.
The above graphs raise some interesting research questions. The performance across states in implementing GSHI schemes is not uniform, and therefore one is not sure whether the equity objective of HCF is being fulfilled. Since the RSBY and GSHI schemes have resource sharing arrangement between the centre and the states, the fiscal position of some states may contribute to this variation in experience. Also, the state level priorities of health, institutional arrangements developed at the state level and administrative efficiency to implement this scheme may also contribute to this variation. If there are clusters of states which share common structural characteristics such as administrative efficiency or institutional developments favoring the RSBY policy, then government needs to consider a differentiated approach to make sure other states implement the programme effectively.
The preference of insurance companies to work in certain regions for the reasons of either supply-side constraints (not having adequate health infrastructure) or inadequate demand of private voluntary insurance (PVI). The data suggest that Maharashtra accounts for 32% of PVI insurance and 31% of GSHI schemes premium. States having a high penetration of health insurance may indicate a well-developed network of private providers.
Also, the issues such as what is the exact coverage and take-up of target population and premiums paid under GSHI schemes across various states in India, what is the claim settlement experience across states in India, is low take-up in certain states because of lack of awareness or supply side health issues in health, is there a case of cream-skimming at macro level, insurance companies focusing on better states.
At a time when policy makers, scholars, and thought leaders are concerned about high OOP expenditures on health, what is restraining the system to ensure equitable distribution of coverage? What does this mean for the health of people on margins and how are they struggling with this experience?
As per the IRDA annual report of 2015-16, about 273 million persons are covered by various GSHI schemes in India. This may be considered as one of the major intervention globally bringing a vast pool together in a targeted manner to address health finance challenge. The total annual spending on these schemes is about Rs 2,500 crores per annum for which the contribution comes from both central and state governments. The net incurred claim ratio of these schemes for the year 2015-16 has been around 109 percent.
One of the objectives of this intervention is to ensure equity in health care financing. The performance of these schemes across states is, therefore, of interest from equity viewpoint. The gross premiums collected indicate that 56% of these premiums are accounted for by four states which are Maharashtra, Tamil Nadu, Karnataka, and Gujarat. The rest of India accounts for 44% of the total premium. These four states which have 56% of premium share roughly account for 25% of the total population of the country. Maharashtra which has 9% of the population, has 31% share in premiums. IRDA annual report does not provide detailed data for all states in India, and therefore the analysis here is restricted in some sense.
Premium of GHIS, 2015-16 (Rs in crores)
Percent Premium and Percent Population of Selected States 2015-16
The above graphs raise some interesting research questions. The performance across states in implementing GSHI schemes is not uniform, and therefore one is not sure whether the equity objective of HCF is being fulfilled. Since the RSBY and GSHI schemes have resource sharing arrangement between the centre and the states, the fiscal position of some states may contribute to this variation in experience. Also, the state level priorities of health, institutional arrangements developed at the state level and administrative efficiency to implement this scheme may also contribute to this variation. If there are clusters of states which share common structural characteristics such as administrative efficiency or institutional developments favoring the RSBY policy, then government needs to consider a differentiated approach to make sure other states implement the programme effectively.
The preference of insurance companies to work in certain regions for the reasons of either supply-side constraints (not having adequate health infrastructure) or inadequate demand of private voluntary insurance (PVI). The data suggest that Maharashtra accounts for 32% of PVI insurance and 31% of GSHI schemes premium. States having a high penetration of health insurance may indicate a well-developed network of private providers.
Also, the issues such as what is the exact coverage and take-up of target population and premiums paid under GSHI schemes across various states in India, what is the claim settlement experience across states in India, is low take-up in certain states because of lack of awareness or supply side health issues in health, is there a case of cream-skimming at macro level, insurance companies focusing on better states.
At a time when policy makers, scholars, and thought leaders are concerned about high OOP expenditures on health, what is restraining the system to ensure equitable distribution of coverage? What does this mean for the health of people on margins and how are they struggling with this experience?
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