Health

KEY POINTS

·        PMJAY will provide insurance up to Rs. 5,00,000 per family per year for in-patient secondary and tertiary treatment.

·        It will cover over 100 million vulnerable families, which is about 500 million people, the poorest 40% of India’s population.

Significance

·        It is the most ambitious and world’s largest social health insurance (SHI) programme.

·        Catastrophic illness will have a high cost of treatment and such expenditures are unaffordable for most Indians, especially the most vulnerable.

·        PMJAY rightly addresses this problem and safeguards poor families from impoverishing due to high treatment costs. 

·        The benefits of the scheme are portable across the country.

·        To ensure that nobody from the vulnerable group is left out of the benefit cover, there will be no cap on family size and age in the scheme.

·        A performance-linked payment system has also been designed to incentivise hospitals to improve service quality and patient safety.

·        The insurance scheme will cover pre and post-hospitalisation expenses, including pre-existing illnesses.

·        Given the existing health conditions and health service delivery systems, PMJAY plays a significant role in altering the health care landscape in India.

Challenges

·        Funding – The allocation of just Rs. 2,000 crore during the current year to the PMJAY cannot provide the promised cover to the large population sought to be included.

·        Profit motive – Private providers might push high cost treatments not covered by SHI to enhance their profit margins, thereby further raising the OOP burden on patients.

·        Lack of infrastructure and trained personnel will make success of PMJAY even more challenging.

·        Unknown financial cost – No actuarial database is available to yield a probability distribution of the expected number of different health episodes requiring different treatments at varying costs.

·        Without such a database, insurance agencies cannot estimate the required premium to adequately cover the pooled risk —the ultimate cost of the programme.

·        Missing people – PMJAY will protect the poorest 40%. Those at the top from the organised sector, government also have access to insurance.

·        But this excludes the 500 million people or so of the middle segment dependent on the unorganized sector.

Road to future

·        These challenges do not imply that PMJAY will fail but that it is only a first step on the road to universal SHI.

·        The Thailand model with excellent SHI coverage and OOP spending down to 18% is increasingly seen as global best practice.

·        As a follower country India can learn from the experiences of others.

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