Promising Results Found for Indian Health Insurance Program

For low-income households in India, tertiary care – or the specialized care required for more complicated medical conditions – is often too expensive, causing individuals to go without or incur devastating debt.  The resulting circumstance is one in which the poor have a much higher mortality rate than the rich.  A study led by Neeraj Sood, Director of Research at the Schaeffer Center, and funded by the World Bank Group, shows promising results of a government-backed health insurance program aimed at mitigating these health disparities.

The Indian government implemented a social health insurance program called the Vajpayee Arogyashree Scheme (VAS) in 2010 which provides free tertiary care to individuals living below the poverty line.  The program is a unique and ambitious design for a number of reasons.  For starters, families below the poverty line with historically little or no access to tertiary care are automatically enrolled in VAS.  Also, the program design has no fees or copayments, includes screening programs, funds health camps in rural areas with procedures in place to detect health issues requiring advanced care, and families in rural areas are provided transportation to urban hospitals to receive the care they need.  The program is paid for by the government and covers high-impact and expensive health problems like cancer, heart, and neurological diseases.

Sood and his team lead an evaluation of the program which included more than 82,000 households-about half of which were eligible and covered by VAS.  The report, published in the BMJ, shows promising outcomes: mortality rates from medical conditions covered by VAS dropped by 64% and the reduction of out-of-pocket expenses dropped by 60%.   Though the study was not equipped to measure it, there was also evidence of increased utilization of medical services.

The policy implications of the study are important.  The effect of health insurance programs has been historically hard to capture, in part because many social health insurance programs mainly are concentrated on primary care.  This evaluation provides evidence that insurance programs can play an important role in improving the health status for poor communities by lowering out-of pocket costs.

The study shows that public policy can play a strong role in reducing disparities in health due to socio-economic status

Neeraj Sood

“The study shows that public policy can play a strong role in reducing disparities in health due to socio-economic status. In villages without insurance, the poor had much higher mortality than the rich, but such disparities were completely eliminated in villages with insurance coverage,” Sood stated.