Health insurance to be extended to the ‘missing middle’

The State government has taken the policy decision to extend health insurance cover to the “missing middle” -- those who are outside the purview of the government-funded Ayushman Bharat-Karunya Arogya Suraksha Padhati (KASP) because they are the APL category but who cannot afford to purchase health insurance either.

The decision would bring approximately 38.9 lakh more families in the State under the umbrella of KASP, who may have to pay a “nominal premium”.

If the government decides to pay the premium in full for the “missing middle”, it would result in an additional annual financial commitment of at least ₹ 1,200-1,500 crore, according to sources. The State Health Agency is still working out the implementation modalities.

It is also being proposed that a “limited version” of KASP (with just emergency health packages) be offered to the “missing middle” for the “nominal premium” , which could be anywhere from ₹2,618-₹3,021, according to official documents

NITI Aayog, in its 2021 report, Health Insurance for the Missing Middle, had highlighted the need to design a low-cost comprehensive health insurance product for the “missing middle”, who were vulnerable to catastrophic health expenditure.

It had suggested that the government could partly/fully finance it; expand the Ayushman Bharat health insurance coverage to the poorest segments of the “missing middle” population or offer a voluntary contributory enrolment.

“Health insurance provision for the “missing middle” has been something the State Planning Board has been discussing since the past few years. About 42 lakh families in the State are at present covered under KASP and another 10 lakh families under MEDISEP. A chunk of families are covered by public-funded insurance schemes such as ESI, ECHS (Ex-servicemen Contributory Health Scheme), CGHS (Central Government Health Scheme) as well as insurance schemes for employees sponsored by private companies. We have reasonably assumed that about 55 lakh families in the State have some insurance cover or the other and that the ”missing middle” cannot be more than 38 lakh families,” says P.K. Jameela, member, State Planning Board

The earlier estimation was that the “missing middle “ would constitute about 18 lakh families from the priority families as per the National Food Security Act database. But the gap widened when the actual numbers of the pink ration card holders (priority households) and yellow card holders ( Antyodaya Anna Yojana/poorest households) were taken into account.

It is also a fact that many families technically categorised as APL became KASP beneficiaries when the government added labourers and pensioners from 57 unorganised sectors such as coir, handloom, khadi, tailoring etc. into the scheme. But the government now reckons that the free treatment benefits cannot be withdrawn from them.

Public health experts point out that no actuarial studies have been done to arrive at the premium amount and that the figures being quoted now are mostly arbitrary. They also express apprehensions that while Universal Health Coverage (UHC) is an ambitious goal, given the financial mess that KASP is currently in, bringing in a paying category into the scheme could only complicate matters more.