The National Health Authority (NHA) has proposed to the government to extend the scheme’s benefits to sections of society who lack any health insurance, two people aware of the development said.

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Launched in September 2018 to provide free health cover of up to 5 lakh to around 107.4 million poor and vulnerable families, Ayushman Bharat, which is being implemented along with state health schemes, now covers over 140 million families consisting of approximately 720 million individuals, protecting 60% of the population.

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An additional 250 million, or approximately 10%, have some form of private health insurance, leaving about 400 million, or 30% of the population, out of the ambit of any health scheme, according to a NITI Aayog report published in October 2021.

“The missing middle scheme would not be an individual-based scheme; rather, it would be expanded for groups. If it would be individuals, then only unhealthy people would be inclined to enrol under the scheme, and if it would be for groups, healthy people may also opt for health coverage plans and pay the premium. Our concept will be successful if our risk pool is larger. And if the risk pool is smaller, then the premium will shoot up, and people may not come forward to opt for the scheme. So, we have to take care that all categories of people, healthy and unhealthy, should come under the missing middle category,” one of the two people cited above said on the condition of anonymity.

The NITI Aayog report defines the missing middle as those not poor or vulnerable enough to qualify for public-funded health insurance schemes but not wealthy enough to purchase private plans either.

However, this segment remains equally vulnerable to sudden healthcare expenses. Last year, a World Bank report said that out-of-pocket healthcare payments had pushed more than half a billion people into extreme poverty.

However, a peculiar feature of Ayushman Bharat may lead to steep insurance payouts in the initial stages. Under the scheme, all beneficiaries can immediately avail of the treatment, even for pre-existing conditions. This is not the case with the majority of private insurance policies. Hence, the early enrolments may be in part from those already in need of healthcare, boosting the scheme’s utilization without enough premium payers and raising financial risks to the scheme.

The NHA is exploring how to resolve the challenge, often called “adverse selection”. One possible solution could be to encourage associations of taxi and truck drivers, gig workers, sugarcane farmers, and cooperative societies in the agriculture and dairy sector to sign up for their members. This can bring in an influx of premium-paying beneficiaries to offset the potential costs of “adverse selection”.

There have been multiple discussions about expanding Ayushman Bharat, the second person cited above said on the condition of anonymity. “Under the new plan for the missing middle, the health package rate would be different in comparison with the existing package rate. The beneficiary would be able to avail of the benefits of the general ward, semi-private ward and private ward as per their package plan,” the person said.

India’s National Health Policy released in 2017 underlines the need for universal health coverage, and the missing middle completes the last link to achieve that goal.

In a recent interview, NHA chief executive officer RS ​​Sharma said the authority is engaging NITI Aayog and other ministries to identify other missing groups and devise mechanisms to extend healthcare protection to them by using different modes of financing.

Queries sent to a spokesperson for the health ministry, NHA and finance ministry remained unanswered till press time.

Welfare schemes to ensure access to tap water, cooking gas, toilets, electricity, and free food grain to the vulnerable sections of society have been a priority of the Narendra Modi government, which has helped the ruling Bharatiya Janata Party electorally in the past.

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