Everyone dreads a medical emergency. When a family member falls ill, we pay from our pocket by drawing from our savings, selling assets or by borrowing. And if the person is poor, the option is to either forego care and die or get pushed further into destitution due to the costs.

Children get taken out of school, seniors work longer hours to earn a little more, and families make do with less of everything, including food. As families cope with health shocks, the vicious cycle of poverty and ill-health accelerates. Every year, health bills push some 55 million people — more than the population of 177 countries — into poverty in India.

Globally, governments bear the responsibility of providing healthcare. In many countries, the tax money is used to provide services directly. In others, healthcare is organised through social insurance. In India, the Government bears less than a fourth of the spending on health (among the lowest in the world) and households spend the rest.

In an effort to reduce the household burden on health, a plethora of tax-funded health insurance schemes have been introduced both by the Union and State governments over the last decade. Since the Rajeev Arogyashree Scheme became popular in Andhra Pradesh and helped YSR come back to power in 2009, many State governments brought in their own variants. In the 2016-17 Union Budget, the Finance Minister proposed to expand the coverage of the Rastriya Swasthya Bima Yojana. As of now, these schemes officially cover around 300 million people. And the aim was to reduce a poor household’s burden on health-care cost and provide them free access to ‘better quality’ care through hitherto inaccessible private hospitals.

Though these insurance schemes continue to remain popular among policy-makers and politicians, evidence suggests that impact on financial protection has been minimal if not detrimental. The latest National Sample Survey Organisation Survey on Health and Morbidity (2014) says that only 13 per cent of the population is covered by government funded insurance schemes. Coverage among the poorest sections in both rural (10.6 per cent) and urban areas (8.6 per cent) is even lower, leaving out large sections of intended beneficiaries.

But what happens to those who are covered and use hospital services? In contrast to what is promised, free care is rare — only three out of 100 hospitalisation cases with coverage are actually free. Those who are not covered by any insurance scheme spend around ₹14,400 on hospitalisation (on an average, between public and private hospitals). Under government-funded insurance schemes, the average cost for households is ₹10,900.

Often people in low-income households go to private hospitals in the hope of free care, but end up paying more. If they go to a private hospital with insurance coverage, the average spend is around ₹18,100. Whereas if one doesn’t have any insurance and goes to a public hospital, it is only ₹4,560. Setting aside parameters of quality and appropriateness of care, the private sector is more expensive for people and insurance fails to bring in the intended financial relief.

The reason why people end up paying from their pocket, despite insurance, may be found in the operational hitches of government-run insurances. These schemes cover only a select set of hospitalisation services and surgeries, leaving households to spend two-thirds of the health expenditure on outpatient care, particularly on medicines. Between 2004-05 and 2011-12, NSSO data suggest, hospitalisation expenses have risen faster for poorer households despite increased insurance penetration.

Public spending on health in India needs to increase to at least to 2.5 per cent of GDP and alternative pathways need to be explored beyond the unplanned and fragmented expansion of insurance to bolster better healthcare access. The National Health Mission has shown, albeit in limited ways, that with some investment in health systems, safe motherhood can be ensured. Tamil Nadu has demonstrated that moderate investments in improved medicine procurement and distribution can curb healthcare expenses, and improve access. Investments in health systems, in addition to a strategic and planned insurance roll-out, can improve access to health-care and bring-down the household burden more effectively in the long term.

The writer is a Wellcome Trust post-doctoral fellow and Senior Research Associate at Public Health Foundation of India. Views expresses are personal

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