Public health insurance is the arrangement by which the government undertakes to provide a guarantee of relief against illness, disability, or death in return for payment of a specified premium. It is imperative to understand who pays the premium and how the services are purchased; this distinction is vital to envision creating a system that can be hassle-free and convenient for beneficiaries. The goal of any model should be to prevent catastrophic out-of-pocket expenditure by the public while maximizing the coverage and type of services with enhanced quality.
The major types of health insurance and delivery mechanisms can be broadly classified shown in the table.
UK and India models
In the National Health Services (NHS) model of the UK and India, the health systems are managed by earmarking a proportion of the tax collected by the government for healthcare services. The advantages are that services are free at the point of service, and there are minimal out-of-pocket costs. However, there may be delays in obtaining elective services, especially for super-speciality care, and the problem of overuse of services in this model. Countries that follow this model in some forms are the United Kingdom, Scandinavian countries, Australia, New Zealand, and Cuba.
In social health Insurance, employers and employees contribute to “sickness funds” created by compulsory payroll deductions. Indian examples of such schemes are ESIS and CGHS. These models are seen where high formal employment exists, such as in Austria, Germany, Belgium, Switzerland, France, and the Netherlands. There is a competition to manage funds with tight market regulation, leaving little scope for profiteering.
System in US
If there is one model not to emulate, it is the private market-based insurance model adopted by the USA; while healthcare costs are skyrocketing, the lack of insurance coverage disempowers those who cannot afford it. The extreme combination of premium and delivery of services is in the US, wherein the employed and wealthier sections of society rely on purchasing private market-based health plans, which allows access to healthcare while those underinsured or uninsured must pay for their procedures out of pocket. This disastrous model has no-cost controls and poor coverage.
An ideal system of health services will have two essential features; one, health services are managed similar to NHS by the government. Two, the government pays the premium of insurance coverage for eligible families through tax-based sources, and there is no out-of-pocket expenditure for using health services. Arogya Karnataka aims to extend ‘Universal Health Coverage’ to all residents in Karnataka State by combing Vajpayee Arogyashree, Yeshaswini Scheme, and other mechanisms. In this model, the SAST trust serves as intermediary and has empaneled public and private facilities for service provision.
As a next step, the state can benefit from integrating the regulatory nature and contribution of the social health insurance model with the current model. Greater decentralization through non-profitable and autonomous regulation can help manage a pool of premiums, further expanding in areas with a high level of formal employment. An ideal health system can take lessons from several models and avoid disastrous models, such as that of the US.
(Giridhara R. Babu is Professor at the IIPH-Bengaluru, and Habib H. Farooqui is Additional Professor at the IIPH-Delhi, Public Health Foundation of India)