Publicly Funded Health Insurance Schemes and Inequalities in Health Insurance Coverage for Inpatient Care in India

Abstract

India, known for its low government spending on health, has been considering Publicly Funded Health Insurance (PFHI) as a mechanism to improve access to inpatient care and reduce out-of-pocket expenditure (OOPE) since 2008. Despite these and other health financing reforms, the country remains among the world's highest OOPE countries. In 2018, the government of India revamped and relaunched the existing PFHI, aiming to cover 500 million beneficiaries from the bottom 40 per cent of the Indian population. This study aims to understand the coverage of current PFHI schemes and their contribution to providing health security coverage for vulnerable sections of the country. The nationally representative NFHS-5 (2019-21) data on health insurance participation were used for the study. This information was available for 724,115 women aged 15-49 years and 101,839 men aged 15-54 years who participated in this survey. Results indicate that PFHI coverage was higher among socioeconomically disadvantaged groups and was associated with lower socioeconomic inequality in health insurance coverage in several states. However, the study does not assess whether such coverage translates into financial protection against healthcare expenditures. Further, states with higher PFHI coverage tended to exhibit lower pro-rich inequality in health insurance coverage. A substantial proportion of marginalised population was covered under PFHI schemes. Addressing the interstate disparities in implementation is seen as a key challenge for PFHI in attaining the 500 million target beneficiaries in the near future.