Extend health cover to the ‘missing middle’

The increasing cost of quality health care combined with greater need and demand for health with increasing incomes, higher life expectancy, and epidemiological transition towards non-communicable diseases have made health coverage imperative

The National Health Authority plans to extend health insurance coverage under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojna (ABPM-JAY) to gig workers who earn between ₹15,000 and ₹25,000 per month, Mint reported on Monday. This scheme, if operationalised, will be a much-needed, welcome step because the Indian economy is moving from permanent employer-employee relationships to on-demand employer-employee relationships, and many employees cannot access health coverage since they fall in what the Niti Aayog calls the “missing middle” category.

The need to cover this “missing middle” is essential because the nature of their work is often subject to occupational hazards. (Burhaan Kinu/HT PHOTO)

ABPM-JAY, which was launched in 2018, provides hospitalisation cover to the bottom 50% of India’s population. Around 20% of the population is covered through social health insurance, and private voluntary health insurance is primarily designed for high-income groups. The remaining 30% falls in the “missing middle,” a broad category of 400 million Indians who work in agriculture and non-agriculture sectors and are positioned between the deprived poorer sections and the relatively well-off who can access insurance products.

The need to cover this “missing middle” is essential because the nature of their work is often subject to occupational hazards. Without insurance coverage and a robust public health system that forces them to make out-of-pocket expenditures, even a small health-related incident can create a significant financial burden and impoverish families. Health insurance can provide financial protection against such health shocks, which may have inter-generational impacts because households try different coping strategies— reducing food consumption, pulling children out of school, dissaving, borrowing, and selling assets— to offset unexpected health-related expenditures.

The increasing cost of quality health care combined with greater need and demand for health with increasing incomes, higher life expectancy, and epidemiological transition towards non-communicable diseases have made health coverage imperative. Therefore, along with developing products that target the “missing middle”, the government must also invest in awareness building on insurance products, identify these new customers, and devise a strategy that focuses distinctly on the segment. No one can be left behind when it comes to basic needs such as health and education.