Group Insurance

The Union budget of 2016-17 is being regarded as a progressive budget from the standpoint of health insurance. Under the new scheme, the government has announced coverage up to 1 lakh rupees per family. The premium of health insurance from has been increased from rupees 15,000 to 20,000 and from 20,000 to 30,000 for senior citizens. Additionally, citizens above the age of 80 years will be allowed deduction of Rs. 30,000 towards medical expenditures.  But are these measures enough, or does India needs an Obamacare clone to curtail the rising health cost in the country?

What is Obamacare?

Officially known as the Affordable Care Act, Obamacare is the most ambitious project of the US Federal Government in the health sector under the leadership of President Barack Obama. The basic premise of the act is to make health care delivery system more distributed by offering quality and affordable health insurance coverage to everyone, including people belonging to lower income groups, thus reducing the cost of medical care for individuals, families and the Government.
Background to the Affordable Care Act
Health care reforms were an integral component of Obama’s presidential campaign in 2008. In the US, medical care expenses are unnervingly high, which had become a hurdle in the way of providing universal health services to average citizens in the country. To put an end to this, a landmark law known as the Patient Protection and Affordable Care Act of 2010 was enacted, that lay special emphasis on the role of public health in the healthcare delivery system.
Problems within India’s Public healthcare delivery system
The Indian health care delivery system is a mixed one. Although government plays an active role in providing health care facilities at primary, secondary and tertiary levels, the public health infrastructure suffers from major flaws. To begin with, public hospitals are over burned with outpouring patients that exceeds capacity. There is also shortage of medical supplies, hospital beds and sometimes even well trained staff.
At the same time there are major issues with regard to the maintenance of hygiene and upkeep of hospital infrastructure. All this has led to the mushrooming of number of private hospitals in tier II and III cities in the past decade throughout India.
So, while health care may have become more accessible, owing to the presence of several privately owned multi-specialty clinics in the peripheries of some urban towns, the cost of treatment has become grossly high. And in the absence of mandatory individual and group insurance coverage, the out of pocket expenses for health care and treatment is increasing by leaps and bounds.

What happens in the absence of mandatory universal health coverage scheme?

If we analyze the health care delivery system closely, they are four major stakeholders namely the patients, providers, public health and payers.  The rising cost of health is putting an immense burden on the economy of a nation as well as individual capacity of paying for the health expenses. Families often take fat loan from unauthorized money lenders to meet the cost of medical expenses.  The interest rates of which are quite exploitative which further pushes rural families into the abyss of poverty.
In Urban areas, the situation is no better. In face of the rise of lifestyle diseases, many urban middle class India’s are susceptible to ailments such as Hypertension, Diabetes and Cardiovascular diseases.  A single trip to the hospital can cost thousands of rupees, which put immense burden on personal wealth and savings of family and individual. Conversely, private hospitals and service providers are making insane profits that have put the balance between providers and seekers out of sync.
Take-away for India from Obamacare
For an emerging economy such as India, Obamacare like policy is beneficial at so many different levels. There are a number of key take-away that maybe suitable for the Indian context. Let’s discuss them one by one.

  • Mandatory group insurance policy for employees

Under Affordable Care Act, it is mandatory for all employers to offer mandatory health insurance coverage to their employees. Although the trend of providing health insurance policy to employees is slowly catching up, it is totally up to the discretion of the employer of management of an enterprise to offer group health insurance plans to the employees.  If only health insurance policy by employer to employee is made mandatory more and more Indians working in unorganized private sector can afford better health care facility.

  • Insurance coverage for People from lower income groups

In India, 70% of health care cost made from personal savings and assets.  In order to get more and more people under the fold of health cover, Government needs to take active initiative to popularize health insurance scheme amongst poor families and the rural population. At the moment although limited, health care coverage is a very urban concept and there is an urgent need to popularize health coverage scheme in rural areas by offering inexpensive health plans to the poor.

  • Greater Emphasis on Women health care

One of the key notes of Obamacare is its commitment to ensure that women get equal health care rights and better health care service.  This entails insurance coverage for the screening of preventive diseases such as breast cancer, gestational diabetes etc.  Insurance coverage towards maternity benefits and care is another untapped area that needs attention of the policy makers of the country.
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