Social Health Insurance in India By – Charles Minz Moderator- Dr. Pradeep Deshmukh Sir

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 ( )  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

Landmark of Social Health Insurance Schemes in India

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 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 less C) 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 Benefit VI 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, 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 PayRate of Monthly Contribution Up to Rs.3000/-15/- Rs /-40/- Rs /-70/- Rs /-100/- Rs.15000/- and above150/-

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.

SchemeTotal Covered population in Unit of EnrolmentBeneficiary ContributionAvg.Premium Rates CGHSFamilyYes ESISFamilyYes Rashtriya Swasthya Bima Yojana (RSBY) FamilyNo Rajiv Arogyasri Scheme (AP) FamilyNo267 Kalainagar (TN)FamilyNoNA Vajapayee Arogyasri Scheme (KN) FamilyNo469 Yeshasvini (KN)IndividualYes150 Private Health InsuranceIndividualYes1216

Community Based Health Insurance Name and Location of CHI Target PopulationTypeRemarks ACCORD,Gudalur,Nilgiris,Tamil Nadu 1992 ST of Gudalur TalukaType ILinked with New Insurance Company MGIMS Hospital,Wardha, Maharashtra 1981 Small farmers and landless labourers TypeINo Linkages.The Organisation operates the scheme Yeshasvini Trust Bengaluru, Karnataka 2003 Members of cooperative socities in Karnataka Type IIOperate their own programme DHAN Foundation,Tamil Nadu Poor women members of the community banking scheme and living in the Village Type IINo 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 IIILinked with United India Insurance Company SEWA,11districts of GujratSEWA union women members Type IIILinkage with National Insurance Company

Types of CHI Type I Type II Provider + Insurer P R E M IU M CARECARE Community Insurer (NGO) Provider Community P R E M IU M FEES CARE

Type III NGO Community Provider Insurance Company CARECARE PREMIUMPREMIUM PREMIUM REIMBURSEMENTREIMBURSEMENT

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 Rs.25,000/- to the earning head of the family.  Compensation due to loss of earning of the earning 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 West Key FeaturesAmercan SystemGerman System Owners of health insurancePrivate companiesSickness 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 onActuarial risk (Age, sex, disease)Income - % of pay roll. Shared equally by employer and employees Selection and refusalsDo occurNot 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 R. Jacobs, M. Goddard; Social Health Insurance Systems in European Countries;Center for Health Economics,Univ of New York,June 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: ervlet?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: Universal Health Insurance Scheme (2000). Government sponsored socially oriented insurance schemes. Available at: 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

Thank You