India has over 1.38 billion people, making it one of the biggest health insurance markets in the world. In FY20, the health insurance market was worth about INR 700 billion and is growing at 19% every year.

About INR 64 billion (around 9% of the total market) comes from government health insurance schemes, which cover about 500 million people — nearly 36% of the population.

However, only 55% of Indians have health insurance. That means 45% of the population — roughly 621 million people — have no health coverage, and most of them belong to lower-income groups.

The COVID-19 pandemic showed how important it is for everyone to have health insurance. Many families faced not just the loss of loved ones, but also huge medical bills. Health insurance can ease this burden, especially during serious illness or hospitalization.

People with low incomes often delay treatment because of high medical costs, which can lead to worse health outcomes or even death. To avoid this, universal health coverage is essential, especially for the poorest groups.

 

Key Challenges in India’s Health Insurance System

For Private Insurance Companies

Access: Reaching rural areas costs more, so premiums are higher.

Premium Payment: Many people delay or fail to pay premiums on time.

For the Government

Weak Systems: The government has good reach but lacks the systems to handle such a large volume of insurance processes.

Limited Hospitals: Government schemes work mostly in government hospitals or a few partnered private hospitals. This makes access to care difficult, especially in emergencies.

 

A Way Forward: Public–Private Partnership (PPP)

A PPP model can help solve many of these problems.

• The government can make the policies.
• Private insurance companies can manage implementation more efficiently because of their better reach and consumer network.

Currently, the government covers 36% of the population. But 45% of people still don’t have insurance. Many of them are farmers or live in rural areas. Since the government already supports farmers financially, the Agriculture and Health Ministries can work together to offer health insurance to these groups.

 

Benefits of PPP in Healthcare

Lower Premiums: Large volumes of customers will reduce the cost per person.

No Premium Default: Since the government pays the premium, coverage won’t lapse.

Easier Implementation: Government offices, panchayats, and banks can help distribute health cards and enroll people efficiently.

 

How Government Can Leverage PPP Further

The government, along with IRDA, can include vaccinations (e.g., COVID-19, swine flu, hepatitis A) in health insurance policies.
In 2021, the government spent about INR 350 billion on COVID-19 vaccines. If vaccines were covered by insurance, this money could be used to add 70,000 hospital beds and treat around 150,000 more patients each month.

PPP in health insurance can help cover most of India’s population, especially in rural areas. This requires data and policy support from the government and efficient service delivery from private companies.

 

Frequently Asked Questions by Rajat Sarkar

Q1. What is PPP in health?

PPP (Public–Private Partnership) is when the government partners with private companies to run health services. The government provides funding or land, and the private company operates the service. This ensures better healthcare access for everyone.

 

Q2. Can PPP improve health in India?

Yes. India’s large population makes it difficult for the government to provide quality care alone. Partnering with private players reduces the government’s operational load and improves service quality. It also attracts foreign investment into healthcare.

 

Q3. What are some examples of PPP in Indian Healthcare?

Chiranjeevi Scheme (Gujarat) – Government + private doctors and providers.

Ayushman Bharat – Government + private hospitals for affordable care.

BSES MG Hospital (Mumbai) – Brahmakumari’s GHRC + Municipal Corporation + Reliance Group.

 

Q4. Why is Universal Health Coverage (UHC) important?

Medical treatment is expensive. Without insurance, families face financial stress. UHC protects people from these costs, especially lower-income groups.

 

Q5. What are the 3 pillars of UHC?

Population coverage: Everyone in the country should be covered.

Range of services: Most essential health services should be included.

Financial protection: People should get cashless treatment or pay only a small part of the cost.