Presentation (CTI)

OBJECTIVES: With the rolling out of the world’s largest health insurance scheme in 2018, India has made clear that it would take the health insurance route to addressing challenges in its health sector. However, given the paucity of robust research on such schemes, it is still not clear if these schemes reduce financial burden borne by the individuals due to medical costs. This paper delves into analysing if the Public-funded health insurance (PFHI) schemes have had any impact on reducing an individual’s out-of-pocket expenditures.
METHODS: This paper aims to estimate the impact of being enrolled in PFHI schemes on an individual's out-of-pocket expenditure level. To account for insurance selection bias, this paper uses Heckman’s treatment effects model, where we first model the insurance-seeking decision and then estimate the impact of being enrolled in PFHI schemes on (log) OOP expenditure by accounting for the effect of unobserved variables. We apply this model on the complete sample as well as on the sub-sample of the bottom 40% of the population classified by consumption expenditure. The treatment effects model has also been replicated for different states in India to identify the states which have been more successful in reducing the OOP expenditures from the states where there is no reduction, and identify the underlying causes behind the success.
RESULTS: The results confirm that the PFHI schemes have led to a reduction in (log) OOP expenditure for the complete as well as for the sub-sample.We find that the schemes were successful in the Indian states that have prioritized their health sector through building a primary health system, health professionals and health workers and, raised awareness about the scheme.
CONCLUSIONS: The paper shows that improving the efficiency of public health systems requires creating the health infrastructure as a prerequisite before rolling out insurance schemes.