Health insurance may become compulsory

NITI Aayog seeks to ensure that everyone is insured with prime focus on the middle class, which is still not covered under any public healthcare system, reports Tehelka Bureau

NITI Aayog has come up with a healthcare system for the middle class which is still not covered under any public healthcare system. Its latest report titled “Health System for a New India: Building Blocks” suggests that the healthcare system would exclude those covered under the newly-launched Ayushman Bharat scheme that mainly caters to the bottom 40 per cent population of the country.

The report was recently released by NITI Aayog Vice-Chairman Rajiv Kumar in the presence of Bill Gates, the co-chairman of Bill and Melinda Gates Foundation. NITI Aayog Adviser (Health) Alok Kumar said the report intends to prepare the road-map to build a health system in the medium-to long-term for those belonging to middle class as the poor have been taken care of now through Ayushman Bharat while those in the top have the capacity to bear their medical exigencies.

“So nearly 50 per cent are still not covered under any public healthcare system and the idea is to pool their risk assets which will cater to the health care needs of the middle class,” Kumar said. He added that people falling under the middle class will not bother if they have to pay nominal 200 or 300 towards building a good public healthcare system in the country and the plan looks feasible.

Bill Gates said India’s future is very bright because of its young population, and highlighted that human capital of any country is the sum total of its healthcare, educational and nutritional investment for its citizens. “Our vision for a healthy India and quality health for all requires us to holistically transform the delivery of healthcare services in both the public and private sectors across all levels of care,” said Rajiv Kamar, Vice Chairman, NITI Aayog. Under the PM Jan Arogya Yojana (PM-JAY), the bottom 40 per cent of the population gets 5 lakh cover for secondary and tertiary care against nearly 1,350 disease conditions.

The government think tank has suggested that there are important health insurance and public funding efficiency and equity reasons for introducing a standard benefits package as reference for all insurance coverage in India. “Benefits package fragmentation occurs not only in voluntary commercial health insurance (which traditionally does provide a diverse set of health insurance products) but also among publicly-subsidized schemes and packages,
resulting in publicly-funded coverage inequity,” it said.

The report also pointed out that most large federal countries face these differences across states and, in most of them, there is agreement that the federal level needs to play an active role in reducing inter-state inequality, by targeting the poor in the poorest states with higher funding contributions for healthcare through conditional or unconditional fiscal transfers.

“If central governments play an equalization role, it is very difficult to do so in the absence of a standard benefits package, which would set the minimum level of services that a country wants all members of society to have, as well as can afford and use to estimate costs and fund allocations,” the report said. “In the absence of such standardized reference and gap identification, it is impossible to judge the gaps that the central government equalization and policy facilitation roles needs to target. A standard benefits package also plays a substantial role in guiding the future development of commercial health insurance. It would ensure coverage of essential and insurable events under risk pooling arrangements.”

The report also raised the issue of unregulated health insurance in India. The report stated that the standard benefit package would be in contrast to the current practice of providing relatively shallow coverage for mostly in-patients. Thus, a standard benefits package would mitigate the effects of the consumer blindness tendency of households and the shallow coverage of unregulated insurance, it said.

The absence of a minimum level benefit mandate in commercial insurance, the report highlighted, makes consumers believe they have insurable events insurance coverage when they have, in general only, pre-payment coverage, with substantial risk dumping to the public sector and fiscal risk in the short, medium and long term when non poor consumers could afford a more insurable event benefits package.

“Therefore, standard minimum coverage is also essential for the healthy development of commercial insurance aligned with long term sustainability of the system,” the report said.

According to the report, India’s very high and slow-to-decrease levels of out-of pocket (OOP) financing from households accounts for more than 64 per cent of total health expenses in the country. It further said that high OOPs are the result of ineffective risk pooling and pre-payment systems. These are likely to remain high for the next decade unless substantial improvements are made to risk pooling in the country.


In a separate development, health insurance holders may soon get vouchers for yoga centre, gymnasium memberships and even for buying protein supplements. In its ‘Exposure Draft on Guidelines on Wellness and Preventive Features/Benefits’, insurance regulator Irdai said policyholders can be offered health-specific services by network providers or other empanelled hospitals for outpatient consultations or treatments, pharmaceuticals, health check-ups and diagnostics.

“Based on fitness and wellness criteria stipulated and disclosed, insurers may endeavour promoting wellness amongst health insurance policyholders,” it said.

According to the watchdog, this can be done by offering outpatient consultations or treatments, health check-ups and diagnostics, redeemable vouchers to obtain protein supplements, and discount vouchers for membership in yoga centres or gymnasiums for participating in fitness activities.

The guidelines would specify the rewards that can be offered as wellness benefits in the health insurance products and the manner in which those benefits can be utilised would be mentioned in the policy contract, as per the draft.

In this regard, there would be changes to wellness features and benefits under the Insurance Act 1938. As per the draft, policyholders can be provided with redeemable vouchers to obtain protein supplements and other consumable health boosters and supplements, and for membership in yoga centres or gymnasiums for participating in fitness activities as part of their health insurance policy.

Also, discounts can be offered on premiums and/or increase in sum insured at the time of renewals based on wellness regime followed by policyholders in the preceding policy period, the Insurance Regulatory and Development Authority of India (Irdai) said.

The draft said the costs towards the wellness services should be factored into for the pricing of the underlying health insurance product and the cost factored should be disclosed in all insurance advertisements wherever wellness features are disclosed and promoted. “No wellness feature/benefit shall be offered without it being filed or incorporated as part of the product in terms of the Product Filing Guidelines,” it added.

Further, the regulator said there should not be any discrimination in providing any of the wellness features/ benefits offered to the same or similarly placed categories of policyholders of the underlying health insurance product. “Every insurer shall assess the pricing impact of wellness and preventive features offered, if any, and the same shall be disclosed upfront in the File and Use or Use and File application, as may be the case, prescribed in the Product Filing Guidelines or applicable File and Use norms,” Irdai said.