Covid-19 and health insurance (Part-2)

The Covid-19 pandemic was devastating, not only in terms of loss of lives, but also in terms of loss of livelihoods for hundreds of families. The rural, informal sector, poor and marginalized faced the double whammy of income insecurity and high cost of treatment. India’s GDP spending on health is woefully inadequate, around 1.35%. Much of this spending in on the Pradhan Mantri-Ayushman Bharat Yojana, the government’s flagship health insurance scheme, introduced with the aim of providing affordable and quality healthcare to India’s poor. Did it fulfill its mission during the pandemic?

Only 14% of Covid 19 hospitalizations were covered by PM-ABY, and 90% of them were from only 4 states. The rest of the population was left to use up life savings and borrow money to pay for treatments. Why did the scheme fail to deliver? The reasons are many.

Firstly, not many hospitals are empanelled with the scheme, especially in semi-urban and rural areas, where they are far and few in-between. The rates fixed by the government for treatments provided for beneficiaries, is much lesser than what the hospitals normally charge. Delays in settling the claims led to hospitals demanding illegal advance deposits. Those hospitals which were empanelled did not provide information to eligible patients about the scheme.

Also, travel costs and at-home treatments were not covered under the scheme, which patients were forced to resort to due to shortage of beds and other critical infrastructure like ventilators. Utilization of the scheme was better in states which already had state insurance schemes that were merged with PM-ABY. The scheme appears to have failed when and where it was needed the most.

One of the reasons for failure of the scheme was poor regulation of the private health sector. Greater details in the next post.

Author: Mahima Prasad

Doctor, dog enthusiast, UPSC aspirant

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