300 million impoverished Indians to get medical insurance

By Kavita Bajeli-Datt

New Delhi, April 6 (IANS) The Indian government plans to provide medical insurance to the country's 300 million poor people, most of whom work in the unorganised sector and are thus deprived of quality healthcare.

Recommending early implementation of the insurance scheme for the poor, the Planning Commission in its report said this segment of the population "remains deprived of the benefits of health insurance in the country".

"While the middle class has benefited from the entry of private health insurance companies, the real challenge is to enhance access to healthcare for poorer sections of the population through health insurance," the report said.

Under the scheme, which is still taking shape, it has been proposed that the entire below poverty line (BPL) population of 300 million be covered, which means 50 million families, in five years.

"It has been estimated that the premium per family would come to Rs.750, of which 75 percent would be paid by the central government while the remaining 25 percent would come from the state government," the report said.

The state governments will determine the benefits that the beneficiaries would be entitled to. The proposal is that hospitalisation expenses will take care of most common illnesses, all pre-existing diseases will be covered, and transportation costs within an overall limit of Rs.1,000 will be provided.

The selection of the health insurance provider will be done by the state through a tendering process.

The report, released Wednesday by Planning Commission Deputy Chairperson Montek Singh Ahluwalia, has been compiled by a high level Planning Commission group headed by Anwarul Hoda, member (International Economics).

The report noted that healthcare insurance in the public and private sectors cannot take up this challenge because the poorer section does not have the capacity to pay the premium at rates required to run the programme on a commercial basis.

Keeping this in mind, the government is now planning the scheme following the recommendations of the National Commission for Enterprises in the Unorganised Sector (NCEUS).

The group was set up by the commission to examine the different aspects influencing the performances of the services sector and suggest short- and long-term policies to improve and sustain its competitiveness in the coming years.

For easy implementation, it has been suggested that the smart card system will be feasible. The cost of the smart card will be borne by the central government and the beneficiaries would need to pay only Rs.30 per annum as registration or renewal fee.

"A health insurance programme, which covers the BPL categories, will also give the choice to people in these categories to turn to healthcare providers in the private sector," it said.

Suggesting the earliest "implementation" of the scheme, the report said traditionally insurance in the country has been limited to industrial workers, central government employees and pensioners of the central government and ex-servicemen.

It said after general insurance was opened up to the private sector and further to foreign direct investment (FDI), there has been a considerable expansion of health insurance, covering mainly the urban upper-middle class.

Healthcare insurance schemes did experience problems such as high premium, delay in settling claims and non-transparent procedures in deciding reimbursements but that has over the years somewhat improved.