Why in News

• India’s health insurance schemes (PMJAY and SHIPs) are expanding coverage to over 80% of the population

• Debate:

  • Critics argue insurance-driven models strengthen for-profit healthcare

  • Public health infrastructure is neglected

  • Concerns over sustainability and equity

Background: Universal Health Care in India

• UHC Vision

  • Recommended by Bhore Committee (1946)

  • Goal: comprehensive, accessible healthcare for all

• Current Reality

  • Eight decades later, UHC remains distant

  • Insurance schemes (PMJAY, SHIPs) cover many but systemic gaps remain

Growth of Health Insurance in India

• Pradhan Mantri Jan Arogya Yojana (PMJAY)

  • Launched: 2018

  • Coverage: ₹5 lakh per household per year for inpatient care

  • Population covered: 58.8 crore (2023–24)

• State Health Insurance Programmes (SHIPs)

  • Most states run parallel schemes

  • Budget: ~₹16,000 crore

  • Coverage similar to PMJAY

• Combined Expenditure

  • Around ₹28,000 crore annually (2018–2024)

  • Growth: 8–25% per year in real terms

• Utilisation Gap

  • Only 35% of insured hospital patients used the schemes (HCES 2022–23)

Fault Lines in Health Insurance Expansion

• For-Profit Medicine Bias

  • Two-thirds of PMJAY funds go to private hospitals

  • Leads to commercialisation, unnecessary procedures, ethical issues

• Neglect of Primary Care

  • Insurance focuses on hospitalisation

  • Primary and preventive health services underfunded

  • Ageing population raises tertiary care costs, crowding out PHCs and OPDs

• Utilisation Challenges

  • Beneficiaries unaware of scheme use

  • Private hospitals reluctant due to low reimbursements

  • Disadvantaged groups face barriers

• Discrimination in Care

  • Public hospitals favour insured patients (extra funds)

  • Private hospitals favour uninsured patients (higher bills)

  • Results in inequity

• Financial Sustainability & Provider Exit

  • Pending PMJAY dues: ₹12,161 crore (more than budget)

  • 600+ hospitals exited due to delays

• Fraud & Corruption

  • 3,200 hospitals flagged for fraud

  • Issues: ghost patients, inflated bills, unnecessary surgeries

  • Weak audits and poor transparency

Structural Risks for UHC

• Underfunded Public Health

  • India: 1.3% of GDP (2022) vs global average 6.1%

• Profit-Driven System

  • Insurance boosts private sector dominance

• High Out-of-Pocket Expenditure

  • Still among the highest globally despite insurance

International Comparisons

• Thailand, Canada

  • Insurance part of UHC with:

    • Non-profit providers

    • Universal coverage

    • Strong regulation

• India’s Difference

  • Insurance is targeted, profit-oriented, weakly regulated

 Way Forward

• Strengthen Public Health Infrastructure

  • Expand PHCs, diagnostics, OPDs

  • Increase rural health workforce

  • Emphasise preventive care

• Regulate Private Sector

  • Enforce standard treatment protocols

  • Price caps on services

  • Strict monitoring of empanelled hospitals

• Improve Utilisation & Awareness

  • Community outreach and digital literacy

  • Simplified claims and grievance systems

• Financial Sustainability

  • Ensure timely reimbursement

  • Explore direct budgetary allocations instead of intermediaries

• Towards True UHC

  • Raise public health spending to 2.5% of GDP (NHP 2017 target)

  • Shift from insurance-driven approach to publicly funded universal healthcare

Conclusion

• PMJAY and SHIPs give temporary relief but risk creating a hospitalisation-heavy, profit-driven system

• True UHC requires:

  • Strong public investment in primary care

  • Effective regulation of private providers

  • Equity-focused reforms

• Without these, health insurance works only as a painkiller, not a cure, for India’s healthcare challenges