Sayee Mandar Deshpande

PSHE 2344

Health Economics II
Assignment Sem III (PSHE A-11)

Submission date: 6th November 2024

Table of Contents
Comparative Analysis of Health Insurance Sectors: India vs. Germany..................................................2
Introduction.........................................................................................................................................2
 Insurance Coverage.................................................................................................................2
 Access to Healthcare Services.................................................................................................2
 Premiums and Out-of-Pocket Costs.......................................................................................2
 Role of Public vs. Private Sectors............................................................................................3
 Coverage for Vulnerable Populations....................................................................................3
Conclusion...........................................................................................................................................3
India's Progress Towards Universal Health Coverage (UHC): A Critical Evaluation.................................4
Introduction.........................................................................................................................................4
 Financial Barriers: High Out-of-Pocket Expenditures............................................................4
 Coverage Expansion Initiatives: The Role of Ayushman Bharat............................................4
 Disparities in Healthcare Access: Urban-Rural Divide...........................................................4
 The Path Forward: Policy Recommendations........................................................................4
Conclusion...........................................................................................................................................4

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Comparative Analysis of Health Insurance Sectors: India vs.
Germany
Introduction
Health insurance systems differ greatly across countries, shaped by each nation’s unique economic,
social, and healthcare infrastructure. This comparative analysis evaluates the health insurance systems
in India and Germany, focusing on five key areas: insurance coverage, access to healthcare services,
premiums and out-of-pocket costs, the role of public versus private sectors, and coverage for
vulnerable populations. By highlighting these differences, this report aims to provide a clear
understanding of how each country’s health insurance system operates and serves its population.

 Insurance Coverage
In India, health insurance coverage remains relatively low, with less than half of the population
insured. The Indian government has introduced several initiatives, such as Ayushman Bharat, to
increase coverage among lower-income households. However, many people, especially in rural areas,
remain uninsured. Private insurance plans are available but often cater to the middle and upper-
income groups, creating a coverage gap for low-income populations.
In contrast, Germany operates under a universal health insurance system, ensuring that almost all
residents are covered by either statutory health insurance (SHI) or private health insurance
(PHI).
Approximately 90% of the German population is enrolled in SHI, while high-income earners and self-
employed individuals can opt for PHI. German legislation mandates insurance coverage, guaranteeing
that all citizens have access to healthcare, which reduces the uninsured population to nearly zero.

 Access to Healthcare Services

Access to healthcare services varies significantly between India and Germany. In India, healthcare
access is largely dependent on an individual's socio-economic status and geographical location. Rural
areas often suffer from a lack of healthcare infrastructure, with limited access to quality medical
facilities and specialists. While private hospitals are better equipped and offer faster services, their
high costs make them inaccessible for many low-income individuals, who often rely on under-
resourced public facilities.
In Germany, healthcare access is generally uniform and high-quality, supported by a robust
infrastructure across both urban and rural areas. German citizens benefit from a comprehensive
network of public and private healthcare providers that offer timely and efficient services.
Furthermore, the German system emphasizes preventative care and regular check-ups, contributing to
better overall health outcomes. This accessibility is a hallmark of Germany’s universal healthcare
model, ensuring equal healthcare access regardless of one’s income or location.

 Premiums and Out-of-Pocket Costs

Premiums and out-of-pocket expenses vary considerably in the two countries. In India, out-of-pocket
expenditure is high, accounting for nearly 65% of total healthcare expenses. Health insurance
premiums, especially in private plans, can be costly for low-income groups, and many expenses—
such as outpatient services and prescription drugs—are often not covered, leading to significant out-
of-pocket spending. According to a study by Reddy et al. (2011), the high out-of-pocket expenses in
India lead to "catastrophic health spending," driving families into poverty.
In Germany, SHI premiums are income-based, ensuring affordability. Employees and employers split
the cost of SHI premiums, typically around 14.6% of income, with a cap to protect high-income
earners. For those with PHI, premiums depend on the individual’s age and health status rather than
income. Out-of-pocket expenses in Germany are relatively low, with co-payments required only for
specific services, such as prescription drugs and hospital stay, which are capped annually to prevent
financial burden.
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 Role of Public vs. Private Sectors
India's health insurance sector includes both public and private players, but the private sector plays a
more dominant role in healthcare delivery. Public health insurance schemes, such as the Employees'
State Insurance Scheme (ESIS) and Rashtriya Swasthya Bima Yojana (RSBY), are available, but
these often lack extensive coverage and are limited in their outreach. Most people rely on private
insurance or self-fund healthcare needs due to inadequate public health services. The private sector
provides more advanced facilities but remains unaffordable for many.
Germany's health insurance model is primarily public through SHI, managed by various non-profit
"sickness funds." Private health insurance serves as an alternative for those who opt out of SHI,
mainly high-income individuals and self-employed people. The government oversees both sectors
closely, ensuring that SHI and PHI follow standardized practices, thereby maintaining quality and
efficiency across the system. This dual approach enhances both equity and quality in German
healthcare.

 Coverage for Vulnerable Populations

In India, government programs like Ayushman Bharat aim to support vulnerable populations, but the
reach and depth of coverage are limited. For example, the elderly often struggle to find affordable
health insurance, and the poor rely heavily on underfunded public hospitals. According to a 2017
study by Gupta et al., “the Indian health insurance sector lacks a safety net for the elderly and low-
income groups,” resulting in disparities in healthcare access.
Germany’s SHI system, on the other hand, inherently protects vulnerable populations. SHI covers
low-income individuals, the elderly, and those with chronic illnesses without requiring them to pay
higher premiums or face reduced benefits. Furthermore, social welfare programs assist
unemployed individuals in maintaining health insurance coverage, ensuring that vulnerable groups
are fully supported within the healthcare system.

Conclusion
This comparative analysis highlights the distinct approaches that India and Germany take in
structuring their health insurance systems. While Germany’s universal insurance model provides
nearly comprehensive coverage and low out-of-pocket costs, India’s system is fragmented, with
limited insurance coverage and high out-of-pocket expenses. Germany’s robust public sector and
regulated private sector stand in contrast to India’s private-sector-dominated model. Although recent
initiatives in India are promising, substantial policy reforms are required to create a more inclusive
and equitable health insurance system. In conclusion, examining Germany’s model offers valuable
insights for India’s ongoing efforts to strengthen healthcare coverage and reduce financial barriers.

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India's Progress Towards Universal Health Coverage
(UHC): A Critical Evaluation
Introduction
India has taken significant steps towards achieving Universal Health Coverage (UHC), aiming to
make healthcare more accessible and affordable for its population. Through initiatives like Ayushman
Bharat and the National Health Protection Scheme, India has sought to reduce financial barriers and
expand health insurance coverage for low-income groups. Despite these efforts, several challenges
persist, including high out-of-pocket costs, healthcare access disparities, and coverage gaps. These
issues continue to hinder India’s path to achieving UHC.

 Financial Barriers: High Out-of-Pocket Expenditures

One of the key challenges in India’s journey toward UHC is the reliance on out-of-pocket
expenditures, which make up approximately 65% of total healthcare costs. This substantial financial
burden, referred to by Reddy et al. (2011) as “catastrophic health expenditure,” pushes numerous
families into poverty. Many individuals avoid or delay seeking medical care due to high costs, which
undermines India’s UHC objectives. While private healthcare provides higher-quality services, it
remains unaffordable for lower-income groups. Public healthcare facilities are often under-resourced
and poorly equipped, especially in rural areas, limiting the effectiveness of UHC initiatives.

 Coverage Expansion Initiatives: The Role of Ayushman Bharat

Ayushman Bharat, introduced in 2018, has been a transformative program in expanding
healthcare coverage for India’s lower-income population. The scheme offers financial coverage of
up to INR 500,000 per family annually for hospitalization expenses. However, the program's
impact is
constrained, as it focuses primarily on hospitalization, excluding a range of essential outpatient and
preventive services. Gupta et al. (2017) highlights the need for India’s health insurance model to
include primary and preventive care, which are currently underfunded, to better align with UHC
goals.

 Disparities in Healthcare Access: Urban-Rural Divide

India’s healthcare access is unevenly distributed, with rural areas facing significant challenges in
obtaining essential services. Roughly 65% of India’s population resides in rural regions, which often
lack adequate healthcare facilities and trained professionals. This rural-urban healthcare gap
exacerbates inequalities and creates barriers to achieving universal access to healthcare. Without
addressing these disparities, India’s UHC efforts remain limited in scope and impact.

 The Path Forward: Policy Recommendations

To make meaningful progress toward UHC, India must focus on:
1. Reducing Out-of-Pocket Costs: Expanding financial support for low-income households to reduce
the direct costs of healthcare. 2. Expanding Coverage to Primary and Preventive Care: Including
outpatient and preventive services under insurance schemes like Ayushman Bharat to provide
comprehensive care. 3. Strengthening Rural Healthcare Infrastructure: Improving facilities and
workforce in rural areas to close the urban-rural healthcare gap.

Conclusion
While India has made commendable advancements with initiatives such as Ayushman Bharat,
significant reforms are essential to fully realize UHC. Addressing high out-of-pocket costs, extending
coverage to preventive and primary care, and bridging healthcare access disparities between urban
and rural areas are critical to building a healthcare system that is accessible, affordable, and equitable
for all. With targeted efforts in these areas, India can progress closer to a truly universal healthcare
model that serves the needs of its entire population.
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