About 400m people in India, roughly 30% of the country’s population, are considered the “missing middle”-that is, underserved communities with insufficient health insurance protection.
This category lies between two ends of the spectrum, says Swiss Re Institute in its “Life and Health (L&H) Insurance Inclusion Radar” report.
The report says, “Data from the World Health Organization show that 65% of India’s healthcare expenditure in 2019 was out-of-pocket. There has been progress towards healthcare insurance inclusion with initiatives such as the Ayushman Bharat government scheme (Pradhan Mantri Jan Arogya Yojana, or PM-JAY). It is the world’s largest state-funded health insurance scheme and covers the poorest 50% of the population (about 700m people).”
The report adds, “At the opposite end of the spectrum, around 20% of India’s wealthiest population are covered by private voluntary or social health plans.”
Research needed
People who are in the “missing middle” are engaged in daily labour, informal work or run small businesses. Family income levels are characterised as being too poor to be rich, and too rich to be poor. Being ineligible for the PM-JAY scheme and not able to afford private cover means that out-of-pocket health expenses are high, and catastrophic expenditure can push this income group into poverty. This calls for deeper research to understand the needs of the missing middle.
Their numbers pose a challenge to the industry regulator, IRDAI, which has set itself the ambitious goal of ensuring that every Indian person and enterprise will have appropriate life, health, property and other insurance protection by 2047.
Despite the “missing middle” issue, India ranks sixth out of 16 countries covered in the Swiss Re Institute report. The report covers five advanced markets and 11 emerging markets. Each is assessed on life and health insurance availability, accessibility and affordability (3 As). The data show that India is above the average for emerging markets except for affordability. However, India beats the global average for accessibility.
The following table shows India’s “3 As” scores vis a vis averages for advanced and emerging markets, as published in “Life and Health Insurance Inclusion Radar”:
|
Country
|
Aggregate inclusion score
|
Ranking out of 16
|
Availability score
|
Accessibility score
|
Affordability score
|
|
India
|
0.52
|
6
|
0.55
|
0.53
|
0.48
|
|
Advanced markets
|
0.66
|
|
0.67
|
0.65
|
0.64
|
|
Emerging markets
|
0.50
|
0.53
|
0.47
|
0.50
|
|
|
Global
|
0.53
|
0.56
|
0.50
|
0.53
|
|
|
Source: Swiss Re Institute, “The Life and Health Insurance Inclusion Radar”
A score closer to 1 represents a high level of inclusion while a score closer to 0 infers a lack of inclusion.
|
|||||
