Health Insurance for the Poor in India

This paper explores how insurance sector reforms alter health insurance prospects of poor people in India. It examines the universal health insurance scheme, recently launched by the Prime Minister of India, while also analyzing alternate forms of community based health insurance (CBHI) schemes prevalent in the country.

Health insurance provided by the government or mediated by the market of health insurance does not seem to be appropriate for low income people. CBHI is more suited to insuring the poor. CBHI schemes can take different forms. Insurance sector reform can affect the poor through its effect on the provision of health services used by low income people and through its access to financing of health care. Findings include:

• All forms of CBHI have a role to play in diverse settings and therefore need to be encouraged by the government through appropriate interventions;
• Government can tap formal insurance providers to serve the low income population;
• Developments in formal health insurance market need to be guided in order to minimize cost escalation of health care provision.