Understanding the Context: The Development of Health Insurance in India
27
National Commission on Macroeconomics and Health (NCMH). The commission’s recommendations created an enabling policy environment for a new wave of government-sponsored health insurance schemes. The NCMH critically appraised the health system and suggested ways of strengthening it with the specific objective of improving access for all to a minimum set of essential health interventions. NCMH advocated: (1) moving toward universal health insurance for secondary and tertiary care, (2) significantly increasing public outlays for health, and (3) stimulating a competitive provider environment. Health insurance schemes have been one vehicle applied by central and state governments to achieve these objectives (MOHFW 2005).
Health Insurance in India: Context and Historical Development The GSHISs date to the late 1940s when the central government introduced the Employees’ State Insurance Scheme (ESIS) for blue-collar workers employed in the private sector. This was followed in the mid1950s by the Central Government Health Scheme (CGHS) for central government employees and for their families. Both schemes provided comprehensive medical coverage and followed a traditional social insurance risk-pooling model in which funds are pooled through employer and employee payroll contributions, supplemented, in these schemes, by government subsidies. Other government schemes for employees in railways and defense, and other civil servants, also emerged shortly after Independence.16 Perhaps due to the supply-side focus described in the previous section, demand-side financing approaches involving government-subsidized health insurance for the poor were slow to emerge. Since the launching of ESIS and CGHS, nearly five decades passed before a new wave of GSHISs emerged.
Not Cut from Whole Cloth Context and capacities have played an important role in the development of the wave of GSHISs launched since 2007. Each of these schemes benefited from the earlier development of the health insurance industry over a 20-year period. Figure 2.4 traces the genealogy of GSHISs and the linkages among them. Among the early attempts by the central government to introduce health insurance for the informal sector was the UHIS. Introduced in 2003, UHIS was a hospitalization indemnity product that could be