ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Budget 2021–22 on Health

The budget speech on 1 February 2021 announced an allocation of over `2.2 lakh crore to health and well-being, at 137% higher compared to BE 2020–21. The Fifteenth Finance Commission emphasised the need for strengthening the COVID-19-ravaged health sector by recommending sector-specific grants. The government did not accept the recommendation and, if we discount the health component in the local government grants, the budget allocation for the sector has increased by hardly 10% compared to the 2019–20 actuals.

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.

Ayushman Bharat

The Pradhan Mantri Jan Arogya Yojana is an ambitious health insurance scheme that has been touted as an important tool to achieve universal health coverage. However, there is still no clarity regarding the financial implications of this scheme. Based on National Sample Survey data of 2004 and 2014 on hospitalisation rates and average medical expenditures, three alternate scenarios have been analysed based on different assumptions about these two parameters, to estimate the total costs of the programme. The results indicate a potentially high burden of the programme on the state and union government finances, especially if it is successful in covering all the intended beneficiaries.

Cost-effectiveness Threshold and Health Opportunity Cost

With the setting up of the health technology assessment board, evidence from cost-effectiveness analysis will play an important role in decision-making. This raises the fundamental question: How much extra cost per unit of health gained is considered cost-effective? Various approaches for assessing the appropriate cost-effectiveness threshold for India are discussed. A robustly determined opportunity cost of healthcare spending should serve as a proxy for setting up a CET, and it should be used to advocate for greater resources towards achieving universal health coverage.

Health Payments and Household Well-being

Health policy pronouncements in India currently advocate insurance-based financing mechanisms towards universal health coverage, sidelining the role of comprehensive healthcare provisioning through the public sector. This study, however, suggests that health insurance has been unsuccessful in protecting households from poverty and impoverishment resulting from out-of-pocket payments, and that insurance in fact subverts the effectiveness of the traditional health financing system. Free or low-cost healthcare provisioning by the state remains the best way to enhance the health and well-being of households, provided the inadequacies and inequalities across districts are addressed, and low-cost medicines and diagnostics made available to all.
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