Making it mandatory for organised sector employers to take health insurance cover for employees will help spread the reach of insurance products, Planning Commission Deputy Chairman Montek Singh Ahluwalia suggested on Thursday.
"There has to be a mandatory provision for providing group health insurance cover to all workers in the organised sector by their employers", he said at a Confederation of Indian Industry Health Insurance Summit in New Delhi.
"I think it is feasible, the government should give very serious consideration to this (making it mandatory for employers to get group insurance for their workers)", he said.
"We will never be able to spread (health) insurance for which people pay unless an element of incentive-cum-compulsion is introduced. If you leave it to people, only rich persons would buy. . . even middle class would not go for it," he said.
Although India's private health insurance industry's business volumes have grown by over 35 per cent a year in the last few years, a staggering 85 per cent of the population remains uninsured, according to industry estimates.
An 'India Knowledge@Wharton' report suggests that about 65 per cent of the people that incur expenditures on major health problems become indebted for life.
One of incentives, Ahluwalia suggested, could be exempting the part contribution of health insurance premium for workers by the employer.
Ahluwalia thinks that there is no point creating public infrastructure that does not work properly and general public end up bearing the entire expenditure on getting a patient treated.
Asked about whether the private insurance companies should provide cashless health insurance cover, Ahluwalia said, "We cannot say that all private insurance companies must run cashless (health) insurance."
Admitting that the government's move of making mandatory health insurance cover for all organised worker would not be the only solution, he said it is true that we cannot do it for self employed people, but government is running a Rashtriya Sawasthya Bima Yojana for them.
Under the scheme, a free health insurance cover for medical treatment of up to Rs 30,000 is provided to the people below poverty line.
The insurance premium is shared between centre and state in the ratio of 75:25 per cent.
"The Centre and states together spending little over one per cent of the gross domestic product on public health service which was even lower than one percentage point three year ago", he said.
"We want to scale the spent on health service to over three per cent of gross domestic product, but we have to think that the expenditure would be entirely on creating public health infrastructure or a part of it should be used to providing health insurance cover to people", he added.
