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Estimates of Health Insurance Coverage in India
Financing health expenditure through health insurance is currently gaining significance as a strong social policy in countries like India where public health facilities are still inadequate. An attempt to estimate the coverage of health insurance in India shows that the coverage is low and not uniform across states and union territories, despite the fact that several public-funded schemes focus on the below poverty line population. Of the various types of health insurance schemes, public-funded health insurance schemes have a dominant position. Moreover, the likelihood of health insurance coverage is relatively higher among specific social groups and in certain areas.
India spends about 4% of its gross domestic product (GDP) on healthcare needs, including both private and public spending, but the share of public spending is still low at 1.2% of GDP, which is the lowest among the Brazil–Russia–India–China–South Africa (BRICS) nations (Bansal 2016; MoHFW 2016). Due to the low level of public spending, nearly two-thirds of total health expenditure is in the form of out-of-pocket (OOP) spending, which is about 90% of the total private spending (WHO 2010). As a result of this high OOP spending, households are being forced to sacrifice other basic needs, sell household assets, incur debt and become impoverished. Estimates show that about 2%–3% of the population is being pushed below the poverty line every year in India (Van Doorslaer et al 2007; Garg and Karan 2009), and according to the latest World Bank report, nearly 50 crore people in India were pushed below the poverty line in 2015 (WHO and the World Bank 2017).
In 2014, “at an all India level, in nearly 74% cases of hospitalisation the major source of finance was household income and saving, followed by borrowing (20.4%), contribution from friends and relatives (4.3%) and sale of physical assets (0.5%)” (Jena et al 2018: 65220). In rural areas, more households are depending on borrowing, compared to their urban counterparts (Government of India 2015). They go for borrowing against household assets and ornaments at a high interest rate. The second most important source of finance was household income/saving (39.2%), followed by borrowings (33.7%) and contribution from friends and relatives (23.1%). So, in the wake of falling public expenditure and high OOP spending, health insurance in India has emerged as an alternative tool to finance OOP spending on healthcare.
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