Universal Health Insurance in India: A way to go forward

A humane society must be able to provide basic health access to its citizens irrespective of their paying capacity.

Published: March 17, 2015 10:49 am
healthcare, health policy “The issues facing the health sector are politically sensitive. We need to build a political consensus to rectify distortions.”

By Dr. Munish Kumar Raizada

Rudolf Virchow a German pathologist, public health activist and politician stated in 1849 that Medicine is a social science and politics is nothing else but medicine on a large scale. As we know now, health is not just about diagnosing ailments, hospitals and social services; it is an issue of social justice.

Getting good health care is not a privilege; it is considered a fundamental right. A humane society must be able to provide basic health access to its citizens irrespective of their paying capacity.

All across the world, public seeks health care either through a government facility or private sector or a combination. Socialized medicine (state medicine) is a term used for a health care delivery system wherein government takes up the responsibility of providing health care to its citizens at tax payers’ cost. This is also called Public –funded health care. The latter can be largely delivered in 2 ways: One, where the government takes up the charge of providing health care by directly administering clinics, hospitals and other facilities. Cuba is a classic example in modern times. The communist country has government-run facilities. There is no private medical sector in Cuba.

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The second method is provision of health care through health insurance. Canada is a classic example where government ensures health insurance for everyone and patients can go to a government or a private facility.

In last 6 decades, India has struggled to make progress in improving health access for its people. Healthcare financing in India has been poor, it spends just 4 percent of its national budget on health. Notwithstanding its burgeoning population, vast geographical area, illiteracy rate and poverty, Indian government has been able to take health care to rural populace through sub-centers, primary health centers, and community health centers. At the same time, private medical sector has also developed significantly. However, unique challenges still remain.

Thus, it is obvious that government of India remains committed to universal health access for its citizens. India is signatory to W.H.O.’s Alma Ata (1978) convention of “Health for All by 2000 A.D.” and subsequent Millennium Development Goals (MDGs) as envisioned by W.H.O. in the year 2000.

Indian central and state governments have so far chiefly focused on owning and administering their own health care delivery system. However, government-run dispensaries and hospitals and health programs have delivered sub-optimal results. The public perception about governmental hospitals is also poor.

One alternative which has remained largely unexploited is providing health coverage via health insurance. The government rather than necessarily running its own health facilities may consider providing health insurance to its citizens. Time has come that India catches up with this alternative model of allocating resources and funding to its public health programs.

When Mr. Narendra Modi took over as Prime Minister last year, he envisioned health insurance for everyone. His ambitious National Health Assurance Mission (NHAM) is likely to be launched in coming days. This will bring much needed promise to the evolution of health insurance model in India. To be rolled out in phases, it may take a decade before the scheme can be actually offered to everyone.

National Health Assurance Mission (NHAM) is one example of Government-sponsored Health Insurance schemes (GSHISs). The Congress regimen in 2008 had launched an ambitious Rastriya Swasthya Bima Yojna (RSBY). It focuses on providing inpatient coverage to families living Below Poverty Line (BPL). With a mere registration fee of Rs. 30, RSBY provides cash-less health insurance to BPL families up to Rs. 30,000. The entire premium is paid by the state (25%) and central (75%) governments. With the introduction of NHAM, RSBY will be gradually merged into NHAM.

Government-sponsored Health Insurance schemes (GSHISs) are not new to India, but surely the evolution has been slow. Employees’ State Insurance Scheme (ESIS), Central Government Health Scheme (CGHS) schemes are in vogue since decades. ‘Mediclaim’ was a private voluntary health scheme launched in 1986 by government insurance companies. In the last decade, a few states have successfully launched health insurance schemes: AarogyaSri (Andhra Pradesh), Vajpayee Arogyashri (Karnatka), the Chief Minister Comprehensive Health Insurance (Tamil Nadu) and RSBY Plus (Himachal Pradesh). The most crucial advantage of government sponsored health schemes is that they are primarily targeted at poorer people, thus enabling a bottom up approach for health for all.

Compared to USA where 75 % of people have health insurance, the most common mode of payment for medical services in India is still ‘out of pocket’. Thus, there is ample scope for health insurance in India. With government’s push for universal health coverage, this market is likely to grow in coming years. Government sponsored Health insurance is likely to be the dominant theme, but private insurance companies can also play a crucial role. Not only they will bring in the much needed investment, their entry will bring better practices, competition and a global insight. Health insurance is currently limited to indoor treatment. There is a need of coverage being extended to outpatient treatment and procedures too.

Health insurance is not without challenges in India. In our country, there is already a high level of medical malpractice. The unfettered continuation of such unethical practices may bleed health insurance schemes. Then there is lack of standardization of medical treatment regimens and practices in India, creating challenges for the insurance companies when it comes to reimbursements.

Medicine cannot just continue as a private matter, it must evolve into a social institution wherein it can serve the basic needs of the society. Universal health assurance hopefully will accelerate the process for India in the direction.


The author practices Neonatal Medicine in Chicago.

Email ID: pedia333@gmail.com


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  1. B
    Nov 21, 2017 at 4:05 pm
    In the recent times, when the healthcare costs have risen drastically and there has been an unprecedented surge in the prices of surgeries and services, one can only hope for a marvel to happen in times of such medical emergencies.
    1. C
      Oct 28, 2017 at 11:29 am
      Prescription Pad is a clinic management softwrae provides all types of facilities for hospitals doctors. The best part of the software is Prescription writing facilities for doctors drug b interaction checker tool. For more info please visit: : prescriptionpad(dot)in
      1. P
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        Aug 23, 2016 at 8:49 am
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        1. J
          Mar 28, 2016 at 10:15 am
          1. P
            May 18, 2015 at 2:35 pm
            Thanks of this helpful blog...but can you please brief me about health insurance
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