Health Insurance for the Poor and the Vulnerable - Senior Citizens

Healthcare, nutrition, shelter, and environmental sanitation have been recognized as critical provisions that older persons require as part of their right to life with dignity. Development of Healthcare Insurance is part of the umbrella concerns listed under Healthcare. Apart from provision of healthcare services (preventive, curative and rehabilitative) in the Public Sector through the Primary Health Care System and other sub-systems, a large number of older persons have been provided healthcare services through the Private Sector Healthcare Industry both on a cash payment basis and through a system of Healthcare Insurance.

Both the Central and State Governments have formulated and funded cashless healthcare schemes for older persons as members of the BPL families – e.g. Rashtriya Swasthya Bima Yojana by the Central Government and replicated by several State Governments either fully or with some modifications. The families above the poverty line (APL families) have had to opt for healthcare insurance policies offered both by the Public Sector Healthcare Insurance Companies of the Private Sector Healthcare Insurance Companies. Healthcare Insurance policies are linked to the extent of perceived risk involved in age-specific coverage; in case of the older persons such risk has been perceived to be very high. The premia that old persons have to pay for healthcare insurance have thus been pegged at very high levels on the one hand and characterized by exclusion of several health conditions. The healthcare insurance industry has withdrawn the facility of cashless healthcare insurance; it has also introduced the principle of co-payment for all older persons opting for such policies. These tendencies appear to ignore the social and economic vulnerability of older persons as rooted in their limited capacity to pay such premia.

The rationale for a State-supported or State-subsidized, but certainly Central Government-led, initiative for healthcare insurance for older persons should be rooted in the social and economic vulnerability of senior citizens - a group of persons that continues to remain neglected or at best find some sympathetic mention in the National Health Bill 2009 (draft). This substantial group of India's population appears to have been left to the vagaries of the Private Healthcare Insurance Industry in the absence of a National Policy that could take a comprehensive view of their healthcare needs.

Healthcare Insurance must provide “an overall universal system that grants all the citizens the right to enjoy a universal basket of healthcare services as a matter of legal right. The governance systems must move towards establishing a mandatory provision of healthcare services that include, in the basket at a reasonable standard, at a reasonable time, and at a reasonable distance from the insured person’s place of residence as a legal right.

The relevant Insurance Law must recognize the right to health services in general, and, also related specifically to the senior citizens in a number of ways – price of medicines lower than charged for others, prohibition of exclusivity for membership, prohibition of discrimination on grounds of age, and, the principle of progressive taxation. It must also include long-term hospitalization of patients with complicated ailments, rehabilitation of long-term patients (with probably the principle of co-payment linked), freedom of choice, and, the freedom to transfer from one health services provider to another for the senior citizens. Healthcare providers must also facilitate access to institutional geriatric services.

The basket of healthcare services provided by the Insurance Companies must be comprehensive enough to cover the treatments and medical requirements of the population of senior citizens. As of now, there is no provision for the financing of Long-Term Care of senior citizens in institutions; “Palliative Care” for those who face end-of-life stage ailments and are beyond cure (but need care for living their last days with dignity) is also not included. Dental care is another “left out” area in the domain of healthcare insurance.

There are four options that need to be considered by the Government at the Centre:

1. The Andhra Pradesh Government's Rajiv Gandhji Aarogyasri Healthcare Insurance Scheme (initially for BPL families and later extended to Journalists and Pensioners of AP Government) offers a very meaningful model that could be canvassed with the Central Government even for APL families and their senior citizen members.

2. The second model for healthcare insurance for Senior Citizens in APL families could be based on a Central Government supported aggregation of the large number of Senior Citizens that pay/do not pay income tax; the aggregated number of Senior Citizens (with part or full support or subsidy from the Central Government) could be provided healthcare insurance through a process of auction bid for premium and other conditions, as has been done in case of the Aarogyasri healthcare insurance scheme in Andhra Pradesh. Such a measure should be considered as part of an incentive for the APL-category Senior Citizens to enable them to access healthcare insurance at radically lower costs and minimum exclusion clauses. The aim should be a pan-Indian health care card, providing low cost (not low quality), and affordable insurance protection for most of the population in the category of senior citizens. Funding subsidy for the scheme premium is something not so staggering , by comparison with BPL population. The Central Government can thus reach out to the largest number of Senior Citizens as part of the tax incentive provisions made available in the Central Budget each year. A mandatory healthcare insurance supported by the Central Government in the form of a specified payment for each senior citizen to the designated or lowest bidding healthcare insurance company could provide a large numerical base for risk coverage to the Insurance Companies. It could also encourage healthy competition among the Insurance Industry and result in consumer-friendly pricing and other conditions.

3. Healthcare insurance for employees supported by their employers could be further extended in terms of basket of services and quality of care.

4. The Sastry Committee Recommendations on Healthcare Insurance for Senior Citizens constitute a landmark document and represents a perspective that has been sponsored by the Central Government. It takes a fairly comprehensive view of the healthcare insurance needs of senior citizens in India.

The following concerns have been very well articulated by the Sastry Committee Report and Recommendations:

(i) The concept of Universal Coverage: ‘all Sr Citizens, irrespective of age, health conditions or claims history must be covered under the Scheme.’

(ii) The principle of Portability: once an elder is in the scheme, the renewal must be automatic, without any limit of upper age.

(iii) Creation of an Insurance Pool: to be created to handle high risk categories defined by the Committee so that they are not excluded.

(iv) Need to develop a cumulative history of insured persons from the date of issuance: facilitating access to discount for no claim periods.

(v) The principle of cost sharing for medical tests: The cost of medical tests has to be shared in the ratio of 50:50 as against the present practice of the entire cost being borne by the elder. In act there should be full re-imbursement.

The following issues touched upon in the Sastry Committee Report could be reviewed to facilitate better clarity and more pro-senior citizen responses.

(i) The principle of no exclusions: There is need to include, as part of the insurance cover, costs of preventive care, home-based care, dental care, long-term care and palliative care. There should not be any exclusion at all as health is a holistic concept, more so when social security in the country is at its lowest.

(ii) The insurance cover policy should not envisage variations based on health condition, age and premium; the principle of universal and common coverage must be adhered to.

(iii) Cashless Service must be provided for without any condition of co-payment.

(iv) The “per lakh cover premium” for healthcare insurance for senior citizens should be determined through a bidding process with a large base of senior citizens providing the opportunity for the lowest possible premium. The Sastry Committee recommendation of Rs. 3,000/- per lakh needs to be re-assessed through public bidding with the provision for discounts based on the principle of no-claim.

(v) The principle of “age-band” for access to healthcare insurance cover or size or premium should be done away under the framework of universality.

The IRDA could have formulated, prior to sending the Report and its Recommendations, a time bound Action Plan to be acted upon by the Insurers in terms of the following possible terms:

(i) laying down uniform cover for senior citizens, (on the lines of Statutory Motor Third Party Policy uniform in all respects),

(ii) a suggested uniform tariff, e.g. 1-5 lacs Policy with no pre existing medical exclusion,

(iii) all the accredited hospitals agreeing to subscribe to uniform rates (as is now prevalent in the Andhra Pradesh model and the Rashtriya Swasthya Bima Yojana Scheme for the BPL families funded by the Center and the State. (Hospital cost is the key to cost containment; Arogyasri data in this regard would give adequate learning lessons on this point. The large subscription base of Elder Members triggered by such a scheme would facilitate the creation of a new structure for ‘Family Clinics’ for counselling, monitoring, home care, and data bank for referrals).

(iv) All insurers subscribing to such an Insurance Cover for APL ( not taxable) category would have been entitled to a subsidy per insured person directly on submission of Certified Audit report to specified authority. Subsidy for retired employees could come from ex-Employers by a statutory provision. Small employers could, however, be exempt from such contribution.

The possibility of such an Action Plan with some of the terms mentioned above exists even today, if the Union Ministries of Finance, and, Social Justice & Empowerment direct the IRDA to act as an Activist-Catalyst for concretizing the right to health for all senior citizens.

The four models - the AP Government Aarogyasri Scheme, the proposed Central Government-supported Aggregation of Senior Citizens' Number-based bargained insurance cost and services for APL-families, the Employers-supported Healthcare Insurance for Senior Citizens, and the Sastry Committee Report/Recommendations - should be considered to widen the scope of healthcare insurance scheme that includes preventive care, diagnostic care, home-based care, hospital-based care, and palliative care.

A stakeholder meeting (including the representatives of the Senior Citizens’ Confederations, NGO’s , Federations and Associations) should be considered to develop a comprehensive perspective on the subject; such a meeting should hopefully lead to inclusion of Preventive Care, Diagnostic Care, Long-Term Care, Dementia and Palliative Care within the ambit of healthcare insurance. The meeting should also consider the possibility of inclusion of Right to Housing for senior citizens with provision for Home Modification for the existing houses for individual senior citizens and for buildings that house groups of senior citizens; it should also consider provision for the “right to assisted living” for senior citizens in need of such services.

As an interim measure, the Union Finance Ministry should consider providing a uniform amount for every senior citizen to the designated- or lowest-bidding insurance company for provision of healthcare insurance cover.

By Sugan Bhatia, Ph.D.
Advisor
All India Senior Citizens' Confederation

scbhatia_delhi@hotmail.com