If the crisis in the Indian healthcare sector seemed delusionary, a recent study confirms it as India ranks 154th among 195 countries on the healthcare index.
The government identified and narrowed down the healthcare issue to be largely caused due to the expenses of the medical treatment which majorly affects the poor and the lower middle class people. Thus, to fix this, ‘Ayushman Bharat’ scheme (an insurance based scheme) was introduced which would provide insurance coverage of Rs. 5 lakh per family to 10 crore underprivileged families across India. However, while at one hand such a massive insurance based scheme was announced, the finance minister managed to subtly declare the merger of the three existing insurance PSUs and their further disinvestment.
At present the insurance market in India consists of 62 insurers, eight in public sector and the remaining fifty four in the private sector as per IRDAI’s 2016-17 annual report. The move to merge National Insurance Company Ltd, United India Assurance Company Ltd and Oriental India Insurance Company Ltd is the government’s giant step towards conceptualising the idea of forming a colossal insurance entity with a foothold over 30 per cent of the general insurance market. While these PSUs struggled to maintain their solvency ratio as per the IRDAI standards, owing to underwriting losses and huge claims, interestingly, all four public sector general insurers dominate the health insurance with 63 per cent market share compared to private sector general insurers.
Hence, the merger and disinvestment of these three PSUs dominating the general insurance sector, especially the heath insurance market share in India in the wake of the announcement of “world’s largest public healthcare scheme” augments the government’s strategic disinvestment of 24 Central Public Sector Enterprises (CPSE) which includes Air India as well. However, disinvestment of public insurance sector along with the inception of NHPS points towards a creation of imbalance in the insurance industry itself.
After the merger of National Insurance Company Ltd, United India Assurance Company Ltd and Oriental India Insurance Company Ltd which is expected to dictate over 30 per cent of the general insurance market, The New India Assurance Company Ltd, which currently holds approximately 15 per cent market share would become sluggish in comparison. Since schemes like Rashtriya Swasthya Bima Yojana (RSBY) majorly went through public sector insurance companies, the merger will lead to an unhealthy and unfair competition between the newly created insurance entity and The New India Assurance Company Ltd.
Reacting on the merger and the simultaneous announcement of NHPS, employees of the public sector insurance companies and unions showed clear dissatisfaction. The General Insurance Employees All India Association (GIEAIA) has demanded for the unification of all four general insurance PSUs similar to LIC instead of disinvestment which would strengthen the general insurance market. Commenting on their demands put forward before MPs, K Govindan, General Secretary, GIEAIA, said, “We demand for the merger of all four insurance companies and create a LIC model corporation for general insurance as well. In terms of jobs and consolidation of existing branches, we need human resources as most of our media claim policies are processed and administered by third-party administrators (TPAs) which can be done in-house with enough human resources. The need is to unify and strengthen the public insurance sector to deal with huge schemes like NHPS.”
Looking back to where we started, it is crucial to understand if insurance schemes are a solution to achieving a better health care system? And if they are, do we need to reinforce our public insurance sector?
Welcoming government’s NHPS, Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance Company said, “I believe countries which provide higher health insurance cover to their citizens, also have people with higher life expectancy. National Health Protection Scheme offering sum insured of Rs. 5 Lakh for a family is a significant move towards bringing more people under health insurance ambit.”
While NHPS underlines the need for allocating funds to the poor and underprivileged by bringing them under the sphere of an insurance scheme, it neglects the need for better infrastructure demands of public healthcare systems. The disparity between public and private healthcare in India would also lead to health insurance schemes as lucrative as NHPS being misused by the private healthcare facilities in India paving way for further losses.
In an exclusive video interview with Delhi Post, NK Premachandran, Lok Sabha MP notified, “Rampant and indiscriminate privatization is the main goal of this government. One side they are privatizing all the public insurance companies and other side inviting the multi-national insurance companies to India as NHPS is an attractive program and it is a beginning of the process towards privatisation of heath sector in India.”
Beyond politics and GDP growth, India’s parliamentarians, policy makers and bureaucrats urgently need to inspect the existing public health care systems without causing any further disparity. While NHPS is an ambitious move towards providing public with better heath care options without worrying about out-of-pocket expenses, it is an underpinning fact that the public health care facilities are losing out to private facilities who are cashing on the vast Indian population. In this time, disinvestment of public insurance companies also points out to a complete privatisation of healthcare industry in India.
