Providing health insurance for ‘missing middle’ segment remains a challenge: NITI Aayog member

He said, “My team did an investigation into private insurance that offers as much cover as PMJAY which is Rs 5 lakh per family, everyone included. And we made phone calls to 8-10 companies. What would it cost? The typical product starts with Rs 24,000 and goes to Rs 42,000, Rs 48,000 and Rs 66,000. These are the quotations we received. Let’s bring this in perspective of the households we are trying to cover. If we look at population distribution by quintiles (dividing a population into five equal strata), PMJAY covers the bottom two quintiles. Using household expenditure survey data, this corresponds to around Rs 15,000 a month, per household.”

Dr Paul added, “If we take deciles, the monthly household expenditure for each decile goes up by Rs 1,000. So the next decile goes to Rs 16,000 and then Rs 17,000 and so on, so it is not very different.

This is for 4.5 or 5 people per family. It is only when we reach the 80 percentile level that the curve starts to move, the jump happens by Rs 5,000 and so on.”

“The point I’m making is that the person just above PMJAY level, is also in the range of Rs 16,000 or Rs 17,000 per month per family. If this is the monthly expenditure, and insurance premium is Rs 28-30,000 would you pay a full month of salary for insurance? No.”

“We want to see what we can do to make an affordable product for what NITI Aayog called in its report “health insurance for the missing middle” and coined the term “the missing middle” which has caught the imagination of people and ever since 2018 when PMJAY came, this has been our guilt that we couldn’t cover the rest. In terms of policy enablers, we are trying to find products that can meet the need for privately funded insurance for this segment – the two quintiles above those benefiting from PMJAY. And we haven’t really come up with products that can work. The reason is that the premium works out to be a lot – almost double the monthly expenditure of these families. So it’s a challenge,” admitted Dr Paul.

He asked, “Is this good business? Can this be explained? That we cannot have a product that people in the middle quintiles can lap up? I am happy to say that the insurance regulatory authority has brought out several reforms… They are yet to trickle down.”

Speaking on the rising bane of Non-Communicable Diseases and calling on researchers to help the state, Dr Paul said, “We see how NCDs are important and their primordial prevention is essential. We need to discuss what interventions have worked to decrease NCDs like obesity and diabetes at the population level. It has happened in iron deficiency. Secondary prevention may work. Primary healthcare has nothing to do with business. Primary healthcare shall be the responsibility of the government… of the state. India has been developing a strong primary healthcare system since 2018. Primary care is 80% of our disease care and responsibility is on the state. We must put our energy and academic inputs behind it.”

Paul is a former head of the paediatrics department at AIIMS, Delhi. He was appointed to NITI Aayog in August 2017 and helped formulate the PMJAY scheme. He was chairman of the National Task Force on Covid-19, Empowered Group on Vaccination as well as the National Expert Group on Vaccine Administration for Covid-19.

Dr Atul Mohan Kochhar, CEO of the National Accreditation Board for Hospitals and Dr Rashmi Nandargi, vice president, Bajaj Allianz General Insurance, also addressed the event.