Social Health Insurance in India

By – Charles MinzModerator- Dr. Pradeep Deshmukh Sir

Introduction• Introduction• Health Insurance• Taxonomy of Health Insurance• Mandatory Health Insurance• Voluntary Health Insurance• Community Based Health Insurance• Private Health Insurance • Challenges faced• Lessons to Learn• References

Introduction Illness is an important source of deterioration to human health. One-quarter of all Indians fall into poverty as a direct result of

medical expenses in the event of hospitalization. (The World Bank 2002)

“Access to key promotive, preventive, curative, and rehabilitative health interventions for all at an affordable cost”(58thWorld Health Assembly, 2005).

40% of hospitalized had to borrow /sell assests (1986-96) 24% hospitalized in a single year are below poverty line due to

hospitalization. 4% covered under Health Insurance.

Health Insurance• The Reduction or Elimination of the uncertain risk of loss

for the individual • or household by combining a larger number of similarly

exposed individuals• or households that are included in a common fund that

makes good the loss caused to any one member(ILO)

Basic Concepts and Aims of Health Insurance

CONCEPTS• Health care expenses are not only expensive but highly random in

nature. • Health Insurance mechanism provides a way by which risk sharing

within a society may take place.• Provide access to universal health care is to pool health risks

between rich and poor, young and old and employed and unemployed, to enable cross subsidization in the form of health insurance.

• HI is a mechanism of pooling fund from its members and paying them when they fall sick.

AIMS Increase access to health Service. Protect families from high Medical expenditure

Taxonomy of Health Insurance in India

Mandatory Health Insurance

Schemes

• Employees' State Insurance Scheme (ESIS) • Central Govt. Health Scheme (CGHS)

Voluntary Health

Insurance

• RBSY,Kalainagar,Rajiv Gandhi Aryogyashri,RGJAY

Community Based Health

Insurance

• MGIMS , Yeshaswani Trust, RSBY, SEWA,BAIF,Karuna Trust

Private Health Insurance (PHI)

Schemes.

• Mediclaim • Universal Health Insurance• Medical Savings Accounts

Mandatory Health Insurance Schemes

• ESI Act, 1948 ESI scheme provides protection to employes against loss of wages.

• Implemented in 1952 in two centers (Delhi & Kanpur ) • ESIS has grown gradually from 1955-56 when it covered only 0.12

million individuals to the current more than 55 million beneficiaries (ESIC, 2010).

• The growth in numbers can be attributed to higher wage ceilings coming in the purview of ESI and growth in the number of workers employed in the organized sector.

• ESIS is a Corporate semi government body headed by Union Minister of Labor as the Chairman and The Director General as Chief Executive.

Coverage

a)All power using non-seasonal factories employing 10 or more employees.b) All non –power using factories employing 20 or more employees.c) Service establishments like shops ,hotels restaurants , cinema, road transport and news papers are covered.d) The employees of covered employers who earn below Rs . 15,000 per month, and their dependents are covered by the insurance scheme.

Financing

A) Employees who contribute at the rate 1.75 % of their wages (if daily wages is Rs.70 or less,his contribution is waived )B) Employers who contribute at the rate of 4.75 % of total wage bills of their employees to contribution on behalf and for employees to contribution on behalf and for employees having daily wage of Rs.25 or lessC) State Governments contributes to 12.5 % of the total shareable expenditure worked out by prescribed ceiling on expenditure which is Rs.1200 per insured person per annum and expenditure incurred outside /over the prescribed limit.

Services• ESI Hospitals and diagnostic centers• Dispensaries• Panel doctors• Preventive ,Promotive ,Curative care and Rehabilitative

Care.

SOCIAL SECURITY BENEFITS

I) Medical Benefit• Sickness Benefit (Cash)

II (a) Extended Sickness Benefit (Cash)II (b) Enhanced Sickness Benefit (Cash)III Maternity Benefit (Cash)IV Disablement Benefit (Cash)V Dependents BenefitVI Other Benefits ( Funeral /Vocational/Preventive)

Central Government Health Scheme (CGHS)• The Central Government servants are entitled to Medical

Facilites under the Central Services (Medical Attendance ) Rules, 1944.

• It is available to all central government employees.• As of 2009, there were 866,687 CGHS cardholders and around 3

million beneficiaries.

Services• Consultation with AMA at CGHS dispensary.• Lab Investigations and other diagnostic facilities.• Hospital Services in the CGHS wing of Hospitals/Private

hospitals recognized by CGHS.• Nursing Home facilities for those having basic pay above

Rs.12000/-• Special treatment like diseases like TB ,Cancer ,Kidney

transplant and By pass treatment.• Post operative treatment .• Referral

Financing• Compulsory contribution is charged from all the entitled

classes of Government servants on the basis of rates fixed by the government from time to time.

Basic Pay Rate of Monthly ContributionUp to Rs.3000/- 15/-

Rs.3001-6000/- 40/-

Rs.6001-10000/- 70/-

Rs .10001-15000/- 100/-

Rs.15000/- and above 150/-

Facilities• Allopathic (254)• Ayurveda /Homeopathic/Yoga/Unani /Sidha (78)• Laboratories (65)• Dental Units(17)

Voluntary Health Insurance

• Rashtriya Swasthya Bima Yojana (RSBY) • Rajiv Aarogyasri Scheme (AP) • Kalaignar (TN) • Vajapayee Arogyasri Scheme (KN) • Yeshasvini (KN)

Rashtriya Swasthya Bima Yojna Rashtriya Swasthya Bima Yojana or RSBY started rolling from

1st April 2008 ,launched by Ministry of Labour and Employment.

Objective of RSBY is to provide protection to BPL households from financial liabilities arising out of health shocks that involve hospitalization.

Beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000/- for most of the diseases that require hospitalization

• Government has even fixed the package rates for the hospitals for a large number of interventions.

• Coverage extends to five members of the family which includes the head of household, spouse and up to three dependents.

• Beneficiaries need to pay only Rs. 30/- as registration fee while Central and State Government pays the premium to the insurer selected by the State Government on the basis of a competitive bidding

• Government has even fixed the package rates for the hospitals for a large number of interventions.

• Coverage extends to five members of the family which includes the head of household, spouse and up to three dependents.

• Beneficiaries need to pay only Rs. 30/- as registration fee while Central and State Government pays the premium to the insurer selected by the State Government on the basis of a competitive bidding

Unique Features of RSBY• Empowering the beneficiary • Business Model for all Stakeholders • Insurers • Hospitals• Intermediaries • Government • Information Technology (IT)• Safe and foolproof • Portability • Cash less and Paperless transactions

Financing• 75 percent, is provided by the Government of India (GOI),

while the remainder is paid by the respective state government.• Government of India’s contribution is 90 percent in case of

North-eastern states and Jammu and Kashmir and respective state Governments need to pay only 10% of the premium.

RGJAY• Objective-To improve access of Below Poverty Line (BPL) and

Above Poverty Line (APL) families to quality medical care for identified specialty services requiring hospitalization for surgeries and therapies or consultations through an identified network of health care providers.

• Benefit- 972 surgeries/therapies/procedures .• Beneficiary Families- Families holding yellow ration card,

Antyodaya Anna Yojana card (AAY), Annapurna card and orange ration card.

• “Rajiv Gandhi Jeevandayee Health Card” issued by the Government of Maharashtra.

• PAYMENT OF PREMIUM: • Rajiv Gandhi Jeevandayee Arogya Yojana Society /

Government of Maharashtra will pay in advance the insurance premium in installments on behalf of insured beneficiary families to the Insurance Company as mentioned in clause 10 of Memorandum of Understanding (MOU) or as decided by the Society or GoM.

Scheme Total Covered population in 2009-2010

Unit of Enrolment Beneficiary Contribution Avg.Premium Rates

CGHS Family Yes 600-6000

ESIS Family Yes 2340-11700

Rashtriya Swasthya Bima Yojana (RSBY)

Family No 440-750

Rajiv Arogyasri Scheme (AP)

Family No 267

Kalainagar (TN) Family No NA

Vajapayee Arogyasri Scheme (KN)

Family No 469

Yeshasvini (KN) Individual Yes 150

Private Health Insurance Individual Yes 1216

Community Based Health InsuranceName and Location of CHI

Target Population Type Remarks

ACCORD ,Gudalur ,Nilgiris ,Tamil Nadu 1992

ST of Gudalur Taluka Type I Linked with New Insurance Company

MGIMS Hospital ,Wardha, Maharashtra 1981

Small farmers and landless labourers

TypeI No Linkages.The Organisation operates the scheme

Yeshasvini Trust Bengaluru, Karnataka 2003

Members of cooperative socities in Karnataka

Type II Operate their own programme

DHAN Foundation ,Tamil Nadu

Poor women members of the community banking scheme and living in the Village

Type II No Linkages.Women Operate the scheme themselves

BAIF,Uruli Kanchan ,Pune Maharashtra

Poor women members of the community banking scheme and living in 22 villages around Uruli

Type III Linked with United India Insurance Company

SEWA ,11districts of Gujrat SEWA union women members

Type III Linkage with National Insurance Company

Types of CHI• Type I Type II

Provider + Insurer

PREMIUM

CARE

Community

Insurer (NGO)

Provider

Community

PREMIUM

FEES

CARE

• Type III

NGO

Community

Provider

Insurance Company

CARE

PREMIUM

PREMIUM REIMBURSEMENT

Private Health Insurance

• Mediclaim This policy is voluntary health insurance scheme offered

by the public sector launched in 1986 Since 1999 this scheme was introduced in the private

health insurance companies. The standard Mediclaim policy covers only hospital care

and domiciliary hospitalization benefits. This scheme includes 3 months to 80 years of age and

who can afford the risk-rated premium is eligible to join the scheme.

The premium depends on the age, risk and the benefit package opted for. The minimum premium is Rs 201 for < 25 years old for a maximum benefit of Rs 15,000.

Universal Health Insurance Scheme (UHIS)

The scheme provides for reimbursement of medical expenses

upto Rs.30,000/- towards hospitalization floated amongst the entire family.

Death cover due to an accident @ Rs.25,000/- to the earning head of the family.

Compensation due to loss of earning of the earning member @ Rs.50/- per day upto maximum of 15 days.

The premium subsidy has been enhanced from Rs.100 to Rs.200 for an individual, Rs.300 for a family of five and Rs.400 for a family of seven, without any reduction in benefits.

Challenges

Medical Savings Accounts (MSAs) MSAs are not a new concept in international health financing models. India has had its own MSA-type model in health insurance, which has

been marketed by Bhavishya Arogya a public sector insurers. An individual or family account is opened in which insurance

contributions are deposited, and whenever an individual or family deceases he/she can use this fund for health.

In these accounts, funds do not lapse even when the funds have not been utilized by the beneficiary rather it can accumulate and be used later.

MSAs act as a demand-side approach to reduce healthcare consumption. MSAs can cut costs, increase competition and reduce unnecessary public spending.

Challenges Faced

• Improper selection• Risk selection• Moral hazard• Lack of funds

Lessons to learn from other Countries

Singapore. Medisave scheme is an individual saving scheme for

which the accumulated savings could be used for medical care expenses.

Medishield, a back-up health insurance programme based on risk-pooling, designed to finance the extreme catastrophic tail of risk distribution.

Medifund, which is an endowment fund for those whose health care costs are beyond their means, even with Medisave and Medishield.

Health System in the WestKey Features Amercan System German System

Owners of health insurance Private companies Sickness funds composed of Members who are workers of one type - as in a cooperative

Coverage, and access to health care

70 % of population covered, access to health care unequal

99.5% of population covered and access to every one is equal

Premium based on Actuarial risk (Age, sex, disease) Income - % of pay roll. Shared equally by employer and employees

Selection and refusals Do occur Not allowed by law

Reimbursement to providers Based on costs and per

cases/procedure basis

Outpatient is on prospective per capita basis, in-patient per day, per case basis.

References • D.Mavalankar,R Bhat.;Health Insurance in India. Opportunities, Challenges and Concerns.IIM Ahmedabad,November 2010.

• R. Jacobs, M. Goddard; Social Health Insurance Systems in European Countries;Center for Health Economics ,Univ of New York,June 2000.

• M.Ranson; Community-based health insurance schemes in India: A review;Vol 16:2 March /April 2003

•  World Health Organization. Regional Overview of. Social Health Insurance in South-East Asia. Regional Office for South-East Asia. New Delhi. July 2004

• National Insurance Company Limited (1906). A Government of India undertaking. Available at: http://www.nationalinsuranceindia.com/nicWeb/nic/PolicyServlet?id=9999&name=4810.htm

• Rashtriya Swasthya Bima Yojana (RSBY) (2008). The Tale of Four Cities [Online]. A joint initiative of Vantage Insurance Brokers and Risk Advisors Pvt. Ltd. and Amicus Advisory Pvt. Ltd. Available at: http://www.vantageindia.co.in/PDF/RSBY_Edition_1.pdf

• Universal Health Insurance Scheme (2000). Government sponsored socially oriented insurance schemes. Available at: http://financialservices.gov.in/insurance/gssois/uhis.asp

• Central Government Health Scheme (No Date). Government of India, Ministry of Health and Family Welfare.

• Devadasan N, Kent R, Wim VD and Bart C (2004). Community Health Insurance in India: An Overview. Economic and Political Weekly

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