CHAPTER 2
Understanding the Context: The Development of Health Insurance in India The extent and efficiency of health financing arrangements, the reach and performance of service delivery, and the evolution of risk-protection mechanisms in India have profoundly shaped the development of governmentsponsored health insurance schemes (GSHISs). This is especially true of the recent crop of schemes, which as a group, were launched as a response to challenges and opportunities evident in the health system. This chapter attends to the contextual dimensions underlying the emergence of GSHISs. First the configuration of health financing in the country is reviewed and the salient problems and limitations of traditional, and heretofore dominant, health financing and delivery arrangements are examined. The discussion then turns to an examination of the historical development of health insurance in India. No scheme was woven from whole cloth. The spillover effects across schemes were extensive. The discussion focuses on the advent of a more or less common set of design elements that together fashioned the structural and organizational features of the new wave of GSHISs.
A Brief Review of Health Finance and Delivery in India India has traditionally been a low spender on health care, allocating approximately 4.1 percent of gross domestic product (GDP), US$40 per capita in 2008–09.1 In terms of India’s share in global health expenditure, 17