Missing Middle: Extending Health Insurance Coverage in India

Abstract: In India’s stride towards achieving its goal of Universal Health Coverage, an important and sometimes neglected aspect is that of health insurance. The pandemic has served to highlight the state of healthcare infrastructure along with the impact of government spending on the healthcare sector. However, in the current Union Health Budget (2022-23) there has been only a marginal increase of 0.2 percent over the revised estimates of 2021-22 which clearly indicates that the financial protection extended by the government does not amount too much. Consequently, the public is directed towards the private sector which results in high out-of-pocket expenditures. Though the government schemes include insurance coverage for the ultra-poor, and there is a portion of the population that is covered by private and voluntary insurance, that leaves 30% of the population devoid of any insurance. They have been referred to as the “missing middle.” This paper looks at the health insurance landscape of countries like the USA, China, and Canada. We also look at the data regarding coverage of different schemes and took inputs from hospitals and private insurance providers to gain a perspective on how health insurance coverage in India can be expanded and be made more inclusive. Factors determining demand and supply are analyzed. We recommend that both the private and public sectors need to collaborate to achieve this outcome. Keywords: Universal Health Coverage, Missing Middle, Health Insurance, Employee State Insurance Corporation (ESIC), Private Health Insurance, Pradhan Mantri Jan Arogya Yojna (PMJAY).