Health Insurance Coverage in India: Insights for National Health Protection Scheme

William Joe
william@iegindia.og
Assistant Professor
Population Research Centre
Institute of Economic Growth, Delhi

Introduction

To provide Universal health insurance coverage as a part of the provision of affordable health

care is seen to be an important development strategy and has been included in Sustainable

Development Goals (SDGs).To eradicate poverty, the emphasis on good health and well-

being plays and instrumental role, which are interconnected deeply as they are contingent

upon each other. Importantly, UN members have agreed to achieve Universal health

Coverage (UHC) by 2030 as a part of SDGs. UHCs promotes that all individuals and

communities receive the health services – ‘promotive, preventive, curative, rehabilitative and

palliative’- they need without any financial hardships. In other words, three objectives were

envisaged under UHCs; (a) equity in access to health services, (b) quality of services should

be good enough to improve the health of those receiving services and (c) one should get

protection against financial risk.

Different countries have adopted different approaches while introducing / adopting UHCs.

For example, China has achieved Universal health insurance in 2011. China has launched

several schemes while achieving this “unparalleled” expansion of insurance coverage: (1)

New Rural Cooperative Medical Scheme (NRCMS), launched in 2003 in rural areas. (2)

Urban Resident Basic Medical Insurance (URBMI), launched in 2007 to target the

unemployed, children, students, and the disabled in urban areas. (3) Urban Employee Basic
Medical Insurance (UEBMI), launched in 1998 as an employment-based insurance program.

(Hao Yu, 2015) 1 . United states of America too have expanded public insurance programme

and cover its distinct demographic group, for example in 1966 it introduced Medicare and

Medicaid insurance coverage for people aged 65 and above or had low income.

UHC has three important dimensions. These dimensions are how many people / populations

are covered, what kind of services are being covered, and proportion of cost covered. It needs

to satisfy these dimensions if one wants to achieve universal health coverage. However, main

challenges in achieving UHC are resource requirement: financial, clinical, managerial and

infrastructural. Especially, low- and middle-income countries have been facing these

important bottlenecks in achieving UHCs as most of them engulfed in poverty trap and

underdevelopment. Many developing and low-income countries use social insurance and

payroll taxes to provide health services to its citizens with equal access 2 .

However, in the post SDGs era, countries tried expanding UHC to enhance quality of health

services and to tackle with bottlenecks in health care service with their initiatives in the forms

of insurance, social schemes and investment in its health sector. These important initiatives

serve as a marker toward UHC. India has been displaying increasing commitment to UHC

from 12th Plan and High-level expert group (HLEG) were constituted by planning

commission in October 2010 with the mandate of developing a framework for providing

easily accessible and affordable health care to all Indians (Singh 2013). India as a federal

structure (with both state and central support) have launched several initiatives to provide

health care services via alternative forms of insurance. One of the most noted initiatives in

this regard is RashtriyaSurakshaBemaYojana (RSBY) in 2008 in 25 states for poor (BPL

households) in which almost 36 million household were enrolled till 2014 (Devadasan et al

1
Universal health insurance coverage for 1.3 billion people: What accounts for China’s success?
2
Hsiao, W. C., &Fraker, A. (2007). Social health insurance for developing nations. Vol. 434. World Bank
Publications
2013; Patel et al 2015). Further, Ayushmaan Bharat: Pradhan Mantri Jan Arogya Yojana

(PMJAY) was launched in 2018 to subsume RSBY (Chatterjee 2018). In addition to this few

states in India like Maharashtra, Karnataka, Tamil Nadu have also launched alternatives

schemes to cover health expenditure. For example, Mahatma JyotibaPhule Jan Aarogya

Yojana previously Rajiv Gandhi JeevandayiArogyaYojana (RGJAY) were launched by

Maharashtra government who holds one of the four cards issued by government (Tayade et al

2018). Andhra Pradesh had Aarogyasri health care programme and now Aarogyasrihas

become flagship health care scheme of Telangana. It may be noted that Andhra Pradesh

renamed its health care scheme to Dr, NTR Vaidya Seva (Nagarathnam et al 2016).

In addition, there are increasing investments in private sector with various private insurances

which covers different segments of health care (Mahal 2002; Devadasan 2006).In this regard,

under National Health Mission (NHM), technical and financial support were provided to the

States/UTs to strengthen their health systems through public-private Partnership based on the

state’s requirements. Moreover, States under NHM are encouraged to contract in or outsource

health services to the private sector in viewing efficiency and quality of these services. Also,

private sector participation in health systems is geared in through increasing umbrella of

health insurance schemes.

Overall health insurance is viewed as an important policy strategy to provide health care

services while reducing out of pocket expenditure as well as catastrophic expenditure in

health sector which burdens individual heavily in case of poverty ridden households. An

understanding of state wise insurance coverage assumes salience because regional patterns do

not only vary in terms of reimbursement but also cost of expenditure. Three types of services

covered under health insurance: 1) in-patient 2) out-patient and 3) treatment/morbidities. For

example, in Maharashtra, Mahatma JyotibaPhule Jan Arogya empanelled 488 hospitals for

971 types of diseases including surgeries, therapies up to Rs. 150,000 per year per family
(Anand 2017). About 6,61,333 surgeries were carried out in 35 districts of Maharashtra till

Nov 2015 3 and Rs. 1641.1 crores spent on these surgeries. Similarly, in-patient and out-

patient were accounted to 230951 and 2407378 respectively till the date from 2012. 4

Given the various efforts, it is critical to take an assessment of the current status and pattern

of health coverage insurance in India. National health Policy 2017 envisages health insurance

as an important quality service as well as to increase population coverage reduces

catastrophic expenditure in health sector (Government of India 2017). This paper attempts

to measure the coverage of health insurance in India by using 71st round of NSS, 2014 data.

In addition to this, the paper also analyses theoutreach of specific types of health insurance

classified on the basis of providers (i.e. government, employer and private/household).From a

policy perspective it is crucial to understand which social and economic section are covered

by government funded insurance schemes or employer provided schemes. Therefore, this

study also aims to understand the socioeconomic patterning of health insurance coverage in

India. Additionally, it also provides estimates for inpatient and outpatient cases occurred (in

last 365 days and 15 days respectively) under each type of insurance as it will elicit the

information regarding adverse selection which is critical for future policy discourse.

Data and Sample

The study is based on data from nationally representative Social Consumption: Health survey

(71st round, 2014) conducted by the National Sample Survey Organisation (NSSO), Ministry

of Statistics and Programme Implementation, Government of India. The survey collect

comparable data from sample-households selected randomly from a multistage stratified

4
https://www.jeevandayee.gov.in/MJPJAY/FrontServlet?requestType=CommonRH&actionVal=Right
Frame&pageName=Explore-Statistics
survey design. The first strata (First Stage Units) include census villages as rural areas and

urban blocks as urban areas across India; whereas second strata (Second Stage Units) are

sample households. The health survey by NSS provides complete information regarding

health insurance (and its types) of each household’s members. These surveys provide

comparable information on aspects of maternity and child healthcare including financing of

hospitalization services (public and private) for the reference period of 365 days. Information

on aspects of morbidity, treatment-seeking of inpatient and outpatient care services for the

reference period of 365 days and 15 days respectively are available from these surveys. In

addition to this, the survey also provides data on infectious and chronic ailments for which

such medical care is sought is also collected by these surveys. The survey also elicits

information on first and second major source of financing the expenditure on inpatient and

outpatient healthcare. Additionally, the survey also provides household level information on

demographics and access to services and utilities as well as individual level data on age, sex,

education, monthly per capita expenditure and primary occupation of households.This study

is based on 65,932 households (36,480 rural + 29,452 urban) and 33,102eligible sample of

individuals.

Outcome Variables and Socioeconomic Indicators

The outcome variable of the study was binary classification of population with or without

insurance (1-Yes/0-No). Further, information on four types of insurance schemes based on

provider is available from NSS 2014. These are (a) specific insurance four Government

funded insurance scheme includes schemes such as RashtriyaSwasthyaBimaYojana (RSBY),

Arogyasri, Central Government Health Scheme (CGHS); (b) Employee State Health

Insurance Scheme (ESIS); (c) Employer supported health protection contains categories other

than government as an employer; (d) Household purchased insurance are those which are
arranged by households with insurance companies. Also, any insurance category comprises

of individuals covered under any of the above insurance type categories.

The analysis mainly focuses onthree SES indicators: household monthly per capita

expenditure (MPCE) quintile, social group of the mother’s household and education of

mother. The education of mother was categorized as illiterate (0 years), primary education or

below (1-5 years), middle school education or below (6-10 years), secondary education (11-

12 years) and higher education (graduate school and above). Social group was categorized as

scheduled tribes (ST), scheduled castes (SC), other backward classes (OBC) and other castes.

The study also includesmothers age, information on household location (urban vs. rural), and

religion (Hindu, Muslim, Christian, or other).

Statistical Analyses and Outcomes

The percentage population with insurance coverage across socioeconomic groups is reported

through cross tables. These estimates are presented for rural and urban India separately.

Further, the estimates for average out-of-pocket expenditure according to insurance types on

across socioeconomic groups are also presented. The net OOP expenditure is estimated by

deducting the amount reimbursed by health insurance provider from gross expenditure. The

average expenditure is the sum of medical and non-medical expenditure. In this regard, the

medical expenditure covers information on doctor’s/surgeon’s fee, expenditure on medicines,

diagnostic tests, bed charges and other miscellaneous expenses (like attendant charges,

physiotherapy charges, personal medical appliances, blood and oxygen). The non-medical

expenditure captures information on transport charges for patient, food transport on others,

expenditure on escorts and their lodging charges. We also present an analysis of incidence of

inpatient and outpatient cases across types of insurance cover.

The socioeconomic gradient in the distribution of insurance cover (across MPCE quintiles is

also estimated through concentration index (Wagstaff and Van Doorslaer 1997). We employ

multilevel linear and logistic regression (adjusting for state and community level random

effects) to understand the mutually adjusted associations of insurance cover with various

socioeconomic factors in a multivariate framework. The logistic regressions estimates are

reported in the form of Odds Ratio (OR) along with respective 95 percent confidence

interval. These odds ratios are the relative measure of effect which allows comparisons of

group relative to the reference group. The analysis was carried out in Stata 15 and MLwiN

(version 2.28) using the runmlwin module (StataCorp. 2013; George 2010; Leckei and

Charlton 2013). All the analysis use sampling weights as prescribed by the NSSO (NSS

2004; 2014).

Results

At national level, about 15.2 percent (SE: 0.058) of population in India is covered with ant

type of health insurance (Table 1). About 12.8 percent of population is covered by

government funded insurance schemes, 1.2 percent (SE: 0.019) by employer supported and

1.3 percent (0.020) by household purchased (others) schemes.Overall, insurance coverage in

rural India (14.1 percent; SE: 0.080) is relatively lower than in urban areas (18.0 percent; SE:

0.101). However, coverage of government supported schemes is slightly higher in rural areas

(13.1 percent; SE: 0.078) than urban (12.0 percent; SE: 0.086). On the other hand, coverage

of employers supported health insurance is about four times higher in urban areas than rural

areas.

Further, figure 1 presents state-wise estimates for insurance (any) coverage in India.

Mizoram has the highest insurance coverage with about three-fourth of population covered by

any health insurance scheme. This is followed by Andhra Pradesh (64 percent), Telangana
(61 perrcent), Keraala (40 perccent) and Chhattisgarh
C h (39 percennt). On thee other hand
d, states

like Utttarakhand, Manipur

M annd Madhya Pradesh
P hav
ve almost negligible
n cooverage in terms
t of

health insurance.
i I fact popuulous statess like Uttar Pradesh
In P (4 percent) annd Bihar (6 percent)

also havve very low

w insurance coverage. Itt can be obsserved from
m figure 1 thhat only 6 sttates out

of total 36 states and

a UTs havve insurancee coverage m ore than 25 percentt. This cleaarly calls

for policy attentionn towards inncreasing aw

wareness in some of thee developedd states also
o.

Table 1: Percentagge of Populaation with Innsurance, In

ndia, NSS 2014

All India Ruural India ban India

Urb
Insurannce type
Meann SE Mean SE Mean SE

Governnment fundeed 12.88 (0.058) 13.1 (0.078) 12.0 (0.086)

Employyer supporteed 1.22 (0.019) 0.6 (0.018) 2.4 (0.041)

Househhold purchassed/Others 1.33 (0.020) 0.3 (0.013) 3.6 (0.049)

Any inssurance 15.22 (0.062) 14.1 (0.080) 18.0 (0.101)

Figure 1: Percentaage of Popullation with Any Insuraance by Stattes, India, NSS 2014
Further table 2 presents state-wise coverage of specific insurance types. Across states, the

coverage of government funded schemes is highest in Mizoram (72 percent) followed by

Andhra Pradesh (62.6 percent). On the other hand, Uttarakhand (0.2 percent) has lowest

coverage of government schemes. It may be noted that Meghalaya (5.7 percent) has the

highest proportion of population with employer supported insurance schemes followed by

Karnataka (3.5 percent). Further, population covered with privately purchased schemes are

highest for Gujarat (6.4 percent). It is disconcerting to observe a low coverage of

government funded insurance schemes even in wealthy and developed state like Gujarat,

Maharashtra, Punjab and Haryana.

Table 2: Percentage of Population with Specific Insurance by States, India, NSS 2014
States Govt. Employer
Private/Other Any Insurance No insurance
Supported Supported
Andhra Pradesh 62.6 0.6 0.6 63.8 36.2
Arunachal Pradesh 3.1 0.9 1.3 5.4 94.6
Assam 1.2 1.2 0.2 2.6 97.4
Bihar 5.3 0.8 0.1 6.2 93.8
Chhattisgarh 38.8 0.5 0.0 39.3 60.7
Goa 13.2 0.1 0.0 13.3 86.7
Gujarat 7.1 0.7 6.4 14.2 85.8
Haryana 3.8 0.5 2.6 6.9 93.1
Himachal Pradesh 7.6 0.7 1.0 9.3 90.7
Jammu & Kashmir 3.8 3.2 1.1 8.1 91.9
Jharkhand 2.4 1.3 0.0 3.8 96.2
Karnataka 5.2 3.5 1.9 10.5 89.5
Kerala 34.6 2.2 2.7 39.5 60.5
Madhya Pradesh 1.2 0.2 0.2 1.7 98.3
Maharashtra 2.8 1.3 3.1 7.2 92.8
Manipur 0.4 0.0 0.1 0.5 99.5
Meghalaya 14.6 5.7 0.2 20.5 79.5
Mizoram 72.0 1.8 0.2 73.9 26.1
Nagaland 27.1 0.3 0.0 27.4 72.6
Odisha 19.2 0.9 0.6 20.7 79.3
Punjab 3.3 2.0 0.3 5.6 94.4
Rajasthan 22.4 0.2 0.1 22.6 77.4
Sikkim 2.2 0.7 0.0 2.9 97.1
Tamil Nadu 17.8 1.9 2.2 21.8 78.2
Telangana 58.2 2.3 0.6 61.2 38.8
Tripura 11.4 0.7 0.7 12.8 87.2
Uttar Pradesh 3.3 0.7 0.2 4.2 95.8
Uttaranchal 0.2 0.0 0.1 0.3 99.7
West Bengal 13.5 1.3 2.0 16.8 83.2
All India 12.8 1.2 1.3 15.2 84.8

Although overall health insurance coverage in India is considerably low, but it is important to

understand the coverage across different economic sections. In this regard, table 3 presents

percentage of population with any health insurance cover by household MPCE quintiles. It

can be observed that a clear socioeconomic gradient exist as any insurance coverage is

highest for richest household quintile (i.e. 25 percent) and lowest for poorest group (11

percent). Similar pattern can be observed in case of government funded schemes with 10

percent of population from lowest wealth quintiles and 15 percent of population from highest

wealth quintiles are covered by government supported schemes.

Table3: Insurance Coverage by Wealth Quintiles, All India, NSS 2014

Employer
Coverage Govt supported Private Purchase Any insurance
supported
Lowest 10 1 0 11
Second 11 1 0 12
Middle 14 1 0 15
Fourth 16 1 1 18
Highest 15 4 7 25

India is marked with intrinsic social and religious diversity and therefore it is important from

a policy perspective to understand the distribution of insurance across social and religious

groups. In this regard, table 4 shows that 19.1 percent for population from scheduled tribes

are covered with health insurance (any), whereas, about 14.4 percent of population from non-

marginalised groups are covered.Further, coverage of government supported schemes are also

higher among population belong to SCs and STs households. However, coverage of

employer supported (1.8 percent) and private insurance (3.1 percent) is highest for general

social group.
Across religious groups, it can be noted that coverage of health insurance schemes (any) is

lowest among Muslim households (10.6 percent). Similar observations reflect across all

types of insurance schemes. For instance, only 9.7 percent and 0.5 percent of Muslims have

insurance schemes supported by government and employer respectively. On the other hand,

about 13.3 percent of Hindu population have government supported health insurance cover.

Table 4: Insurance Coverage by Social Groups and Religion, All India, NSS 2014

Employer
Social group Govt Supported Private Purchase Any Insurance
Supported
Schedule Tribes 18.2 0.5 0.3 19.1

Schedule Castes 13.1 0.6 0.3 13.9

Other Backward Class 13.6 1.1 0.8 15.5

Others 9.5 1.8 3.1 14.4

Religion

Hindu 13.3 1.2 1.4 15.9

Muslim 9.7 0.5 0.3 10.6

Others 12.2 2.3 3.2 17.8

To discern the distribution of insured population across MPCE, table 5 presents concentration

index estimates for rural and urban areas. All positive values in the table clearly elicit a

significant concentration of insurance cover among wealthy households. For instance, the CI

value for any insurance is 0.018 for all India. This concentration is significantly higher in

urban areas (0.27) as compared to rural areas(0.12). The socioeconomic gap in insurance

coverage is substantially higher in case of private schemes and lowest in case of government

funded schemes.

Table 5: Concentration Index Estimates regarding Distribution of Insurance across MPCE,

India, NSS 2014
Concentration Employer
Govt supported Private Purchase Any Insurance
Index Supported
All India 0.10*** 0.48*** 0.77*** 0.18***

Rural India 0.11*** 0.06*** 0.59*** 0.12***

Urban India 0.12*** 0.43*** 0.65*** 0.27***

Table 6 present estimates regarding inpatient and outpatient cares (per 100000 persons) by

types of insurance coverage for rural and urban areas separately.Of all people who are

covered with any type of health insurance in India, the rate of hospitalisation is about 50 per

100000 persons. For all India, the hospitalisation cases are highest when insured from private

purchase (54.4 per 100000 persons). In urban areas, cases for inpatient care is observed to be

highest for those covered by government funded schemes (60.4 cases per 100000 persons).

On the contrary, in rural areas, inpatient cases are substantially higher for those purchase

private insurance (73.5 cases per 100000 persons). Also, overall inpatient cases are higher

for urban areas compared to rural areas.

Table 6: Inpatient and Outpatient Cases per 1000 by Insurance Types, India, NSS 2014

IPD OPD
Insurance Type
Rural Urban All Rural Urban All
Government Funded 45.9 60.4 50.0 155.7 221.0 174.0
Employer supported 40.9 54.5 49.4 124.5 166.0 150.4
Household purchase/other 73.5 50.5 54.4 177.2 176.4 176.5
Any insurance 46.3 57.6 50.3 154.8 204.6 172.5
No insurance 30.2 37.2 32.2 85.9 116.4 94.7
Total 34.3 43.2 36.9 95.3 131.9 106.3

Similarly, among those who are insured with any health insurance scheme, the incidence of

outpatient treatment is about 172 cases per 100000 persons. Generally, the incidence of

outpatient cases for those who are insured is relatively higher in urban areas (204 cases per

100000 persons) than rural areas (154.8 cases per 100000 persons). It may be noted that in
rural areas, incidence of outpatient cases is highest for those with privately purchased

insurance cover.

To further the understanding, we also estimated gross and net average OOP expenditure on

inpatient care under each type of insurance for public and private hospitals separately. In this

regard, table 7 shows a significant difference in the gross and net expenditure both in public

as well as private facilities. For instance, the gross average expenditure on inpatient care of

those with any health insurance is Rs. 26298, whereas after deducting insurance

reimbursement, the average expenditure falls to Rs. 19723. As this reduction is in average, it

will be manifold when estimated in absolute terms. The difference between gross and net

expenditure is substantially higher in case of private hospitals. In case of those with private

insurance schemes, the average gross expenditure on inpatient care in private facilities is

more than two times of net expenditure. Further, it can be observed that the difference is

lowest for those with government funded insurance schemes both in public as well as private

facilities. For instance, the absolute difference between average gross and net OOP

expenditure on inpatient care is Rs. 2361 and Rs. 626 for private and public hospitals

respectively.

Table 7: Average Out of Expenditure on Hospitalization by Insurance Types, India, NSS

2014

Public (Rs.) Private (Rs.)

Insurance Type
Gross Net Gross Net
Government Funded 5068 4442 22173 19812
Employer supported 10491 4813 36586 19223
Household purchase/other 20953 13491 43311 19990
Any insurance 5674 4662 26298 19723
No insurance 7362 NA 26032 NA
In addition to this, it can also be observed from table 7 that average expenditure after

insurance reimbursements is less than half of gross average expenditure in case of those

covered with employer supported insurance. Finally it can be observed that OOP expenditure

in public hospitals is significantly lower as compared to that in private hospitals

Table 8: Econometric Estimates Regarding Association between InsuranceCoverage and

Socioeconomic Correlates, India, NSS 2014
All India Rural India Urban India
Background Characteristics
OR 95% CI OR 95% CI OR 95% CI
0-14 years® 1.00 1.00 1.00
15 – 24 years 1.14*** (1.04, 1.25) 1.19*** (1.10, 1.29) 1.08 (0.95, 1.21)
25 – 59 years 1.28*** (1.17, 1.40) 1.31*** (1.20, 1.43) 1.23*** (1.11, 1.36)
60+ years 1.35*** (1.22, 1.49) 1.41*** (1.28, 1.55) 1.27*** (1.11, 1.44)
Male® 1.00 1.00 1.00
Female 0.98*** (0.97, 0.99) 0.98*** (0.97, 0.99) 0.98** (0.97, 1.00)
Illiterate® 1.00 1.00 1.00
Primary education 1.16*** (1.09, 1.24) 1.15*** (1.09, 1.23) 1.19*** (1.11, 1.29)
Secondary education 1.09*** (1.05, 1.14) 1.09*** (1.04, 1.13) 1.12*** (1.06, 1.18)
Higher education 1.18*** (1.12, 1.25) 1.12*** (1.08, 1.16) 1.23*** (1.14, 1.33)
Casual labour® 1.00 1.00 1.00
Self-employed in agriculture 0.90** (0.81, 1.00) 0.93* (0.85, 1.01) -
Self-employed in others 0.84*** (0.77, 0.93) 0.93* (0.85, 1.01) 0.77*** (0.67, 0.90)
Regular wage/salary 1.37*** (1.11, 1.69) 1.32** (1.06, 1.63) 1.36** (1.07, 1.73)
Others 0.84 (0.68, 1.04) 0.92 (0.75, 1.10) 0.78* (0.59, 1.03)
Lowest MPCE quintile® 1.00 1.00 1.00
Second MPCE quintile 1.02 (0.95, 1.08) 1.01 (0.93, 1.08) 1.09 (0.97, 1.21)
Middle MPCE quintile 1.05 (0.96, 1.14) 1.01 (0.91, 1.11) 1.22*** (1.07, 1.38)
Fourth MPCE quintile 1.08 (0.97, 1.22) 1.00 (0.89, 1.13) 1.30*** (1.11, 1.54)
Highest MPCE quintile 1.40*** (1.14, 1.71) 1.13 (0.95, 1.34) 1.81*** (1.39, 2.35)
Scheduled tribe® 1.00 1.00 1.00
Scheduled caste 0.92 (0.82, 1.01) 1.03 (0.90, 1.16) 0.77*** (0.65, 0.91)
Other backward classes 0.91* (0.81, 1.01) 0.99 (0.86, 1.12) 0.82** (0.69, 0.97)
None of the above 0.85*** (0.76, 0.95) 0.82*** (0.71, 0.92) 0.83** (0.70, 0.98)
Hindu® 1.00 1.00 1.00
Muslim 0.77*** (0.69, 0.87) 0.86*** (0.78, 0.96) 0.72*** (0.62, 0.85)
Other religion 1.02 (0.92, 1.14) 0.99 (0.87, 1.15) 1.06 (0.95, 1.20)
Male headed household® 1.00 1.00 1.00
Female headed household 1.03 (0.96, 1.09) 1.02 (0.94, 1.11) 1.04 (0.97, 1.11)
Log of household size 1.07** (1.00, 1.14) 1.05 (0.97, 1.14) 1.10** (1.02, 1.18)
Joint family 1.00 1.00 1.00
Nuclear family 1.07*** (1.03, 1.12) 1.09*** (1.04, 1.14) 1.06 (0.98, 1.13)
Rural® 1.00 - -
Urban 0.91 (0.80, 1.04) - -

To understand how insurance coverage in India is associated with the socioeconomic

correlates, we performed a series of multilevel logistic regression models (Table 8). Across

all age groups for all India, the probability of being covered with any health insurance

scheme is highest for old age group (i.e. 60+ years) (OR: 1.35; 95% CI: 1.22; 1.49). This

pattern is consistent across both rural (OR: 1.41; 95% CI: 1.28; 1.55) as well as urban (OR:

1.27; 95% CI: 1.11; 1.44) setting. Expectedly, compared to illiterate individuals, the

likelihood of obtaining health insurance (any) is about 18 percent higher among educated

persons (OR: 1.18; 95% CI: 1.12; 1.25). This gradient is observed to much sharp in urban

population as value of odds ratio for those with secondary education is estimates to be 1.23

(95% CI: 1.14; 1.33). Further, it can be observed that odds for having insurance is

substantially higher for t=regular salaried persons compared to casual labours. For instance,

the all India value of OR for casual labour is estimated to be 1.37 (95% CI: 1.11; 1.69).

Similar pattern was observed for both rural (OR: 1.32; 95% CI: 1.06; 1.63) as well as urban

(OR: 1.36; 95% CI: 1.07; 1.73) areas. Across wealth quintiles, a clear gradient in odds of

having insurance was observed with higher value odds ratio in urban areas. However no such

gradient was observed in rural areas. Further table 8 shows that Muslim population has

significantly lower odds of having any health insurance. For instance, the value of odds ratio

for all India for Muslims is estimates to be 0.77 (95% CI: 0.69; 0.87). Interestingly in urban

areas, individual with higher household size have higher likelihood of having health

insurance cover (OR: 1.10; 95% CI: 1.02; 1.18). Also, for all India, the value of odds ratio

for nuclear family against joint family is estimated to be 1.07 (95% CI: 1.03; 1.12).
In addition, we also ran regression models to further to further the understanding on how the

magnitude of average OOP expenditure on inpatient acre is associated with insurance

coverage in India for public and private hospitals separately. It can be observed from table 9

that compared to those individual; with no health insurance cover, the value of coefficients is

lower indicating lower probability of OOP expenditure if covered with ay type of health

insurance (government funded or employer supported or private purchase).

Table 9: Econometric Estimates Regarding Association between Average Out-of-Pocket

Expenditure on Inpatient Care and Socioeconomic Correlates, India, NSS 2014

Public Private
Background Characteristics
Co-efficient 95% CI Co-efficient 95% CI
No insurance® 1.00 - 1.00 -
Government Funded 0.09** (0.01,0.17) 0.10 (-0.12,0.31)
Employer supported 0.14 (-0.07,0.34) 0.58** (0.02,1.14)
Household purchase/other -0.04 (-0.23,0.15) 2.97*** (2.44,3.50)
0 to 5 years® 1.00 - 1.00 -
6 to 14 years 0.02 (-0.08,0.12) -0.49*** (-0.77,-0.21)
15 to 24 years 0.15*** (0.05,0.25) -0.35** (-0.62,-0.08)
25 to 59 years 0.35*** (0.27,0.43) 0.91*** (0.69,1.13)
60+ years 0.92*** (0.82,1.02) 5.17*** (4.89,5.45)
Male® 1.00 - 1.00 -
Female -0.09*** (-0.14,-0.05) -0.49*** (-0.61,-0.36)
Illiterate® 1.00 - 1.00 -
Up to primary 0.02 (-0.05,0.10) 0.46*** (0.26,0.66)
Up to secondary -0.02 (-0.09,0.06) 0.59*** (0.38,0.79)
Higher Education -0.09** (-0.18,-0.01) 0.55*** (0.31,0.79)
Lowest® 1.00 - 1.00 -
Second 0.10*** (0.03, 0.13) 0.19* (0.00,0.38)
Middle 0.16*** (0.08,0.24) 0.48*** (0.28,0.69)
Fourth 0.23*** (0.15,0.30) 1.06*** (0.84,1.27)
Highest 0.41*** (0.32,0.50) 3.99*** (3.74,4.23)
Rural® 1.00 - 1.00 -
Urban -0.04 (-0.09,0.01) -0.13* (-0.27,0.01)
Schedule Tribe® 1.00 - 1.00 -
Schedule Caste 0.13*** (0.03,0.23) 0.04 (-0.22,0.31)
Other backward classes 0.07 (-0.02,0.16) 0.29** (0.05,0.54)
Others 0.07 (-0.02,0.17) 0.67*** (0.41,0.92)
Hinduism® 1.00 - 1.00 -
Muslim 0.01 (-0.06,0.08) -0.05 (-0.25,0.14)
Other religion -0.01 (-0.12,0.10) 0.21 (-0.08,0.50)

Discussion
The salient findings from present analysis are as follows: firstly, the overall insurance

coverage in India is very low with even lower coverage in rural areas. Second, among the

given classification of insurance providers, the proportion of government funded schemes is

observed to be highest. Third, significant socioeconomic equity gap in insurance coverage

was observed with higher proportion of insured members among economically affluent and

socially advanced households.Fourth, huge gaps in insurance coverage across Indian states

with higher coverage among those with state specific insurance schemes. Finally.

Considerable net effect of insurance reimbursements in OOP expenditure on inpatient care in

private sector.The present estimates do not suggest much adverse selection but out of pocket

expenditure on inpatient care continues to be high both in public and private settings.

The observed gaps in coverage across states and regions merits policy attention. In this

regard, it is important to understand that several publicly-financed insurance schemes are

such that health benefits are defined on the basis of state of residence whereas similar

benefits are unavailable to fellow citizens residing in other parts of the country. This clearly

elicits horizontal inequities in place of insurance schemes as a major public health concern.

Implementation of insurance programs have been very uneven across states and also between

villages. With existing access conditions across states, districts ad villages, higher enrolment

needs to be matched. Also,it calls for a need to have a universal appeal for right to health. In

fact, it makes sense to consider government mandate for universal coverage across all the

states.
Apart from a substandard coverage in health insurance, the socioeconomic gradient in

coverage is observed to be unequal and deviating from the principle of equity in health and

health care particularly amongschedule castes and Muslims. In the same vein, it is important

for recently launched insurance schemes like PMJAY (Pradhan Mantri Jan Arogya Yojana)

to spell out the criteria (norms) for selecting 500 million beneficiaries. Given the low

demand for health insurance, the proposed cover under NHPS (PMJAY) of 100 million

households inadequate as over 80% households may be in need of insurance support. In

addition. It was also observed that existing cover of government supported is not consistent

with socioeconomic gradient. Rather, it should have been much higher among the low-

income households particularly in low income and populous states like Uttar Pradesh, Bihar

and Madhya Pradesh.

As demographic composition of India is currently experiencing increasing share of youth am

working age population, policy emphasis on providing coverage for children and youth

assumes salience. In addition to the potential life years saved and economic benefits,

following reasons make a clear favorable case for covering youth; this age group has lowest

rate of hospitalization and lowest OOP expenditure on health care; insurance premiums for

teen and youth can be very low; also, risk-pooling can be very effective for this age group. In

addition to this, commencing insurance cover at early age will inculcate a habit formation.

Another important demographic aspect for insurance coverage is the greater needs for elderly

population. In this regard, states with higher share of elderly population (and therefore higher

rate of hospitalization and OOPE) can be compensated or provided additional resources (15th

Finance Commission transfers). With the increasing share of elderly population and the huge

population base in India, this can have significant policy implication sin future.

As such, health equity is a prominent global developmental agenda (Sustainable

Development Goals 20165) but the current discourse is preoccupied with equity concerns
associated with maternal and child health.However, given the low insurance coverage, it will

be further interesting to extend equity analysis in the domain of elderly health, especially for

developing countries like India (Bongaarts 2006). Existing studies have extensively

documented the demographic profile of elderly population across Indian states (Bloom et al

2010; Visaria 2001; Tripathi 2014). it is also important to develop good demographic

statistics from a socioeconomic perspective. For instance, we do not have estimates of life

expectancy at birth or life expectancy at 60 of different socioeconomic groups and thus are

blind to all the inherent inequalities which perhaps may be widening over time and space.

Availability of such disaggregated information can generate much needed impetus for elderly

health and well-being as a social and political agenda.

At this point it is important to mention that the study have certain limitations. Firstly, the

cross-sectional nature of data restricts us to identify the overtime changes (or additions) in

insurancecoverage.Further, it does not allow to infer about any causal associations between

outcome and explanatory outcomes. In addition, in the absence of data on income,

household’s monthly per capita expenditure (MPCE) is taken as a proxy indicator for same.

Therefore, any conclusion regarding poverty and deprivation can be sensitive to the adopted

proxy for household economic status. Yet, evidence suggests that variables such household

MPCE are valid in general in population-based surveys (Filmer and Pritchet 1998).

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