Day 51 – Q 3. Do a critical assessment of the performance of government funded medical insurance in India. (15 Marks)

  • IASbaba
  • March 22, 2022
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TLP-UPSC Mains Answer Writing
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3. Do a critical assessment of the performance of government funded medical insurance in India. (15 Marks)

भारत में सरकारी वित्त पोषित चिकित्सा बीमा के प्रदर्शन का समालोचनात्मक मूल्यांकन करें।


Candidates need to do a critical assessment of the performance of government funded medical insurance in India.


Health spending is one of the important causes of poverty in India.Public financing for health in India is low, leaving households to rely heavily on out of pocket payments for health expenses.

Critical assessment of the performance of government funded medical

Insurance in India

  • The health insurance industry in India is the fastest growing segment in the non-life insurance sector. The market witnessed a robust double-digit growth of 24% in FY 17, with a market share of 24%, in the entire non-life insurance sector. It has been the fastest growing market segment, registering a CAGR of 23%, for the past 10 years. 
  • This phenomenal growth may be attributed to the liberalization of the economy and growing general awareness among the public on healthcare.
  • The health insurance industry is at an embryonic stage, with roughly 25% of the population under its coverage. 
  • There exists a huge potential for growth and penetration of health insurance to a larger population. Additionally, there are both opportunities and restraints in the marketing and distribution of health insurance products in India. 
  • A national Publicly Funded Health Insurance (PFHI) scheme called Pradhan Mantri Jan Arogaya Yojana (PMJAY) was launched by government of India in 2018 that seeks to cover 500 million persons with an annual cover of around 7000 USD per household. 
  • PMJAY claims to be the largest government funded health scheme globally and has attracted an international debate as a policy for Universal Health Coverage. 
  • India’s decade-long experience of the earlier national and state-specific PFHI schemes had shown poor effectiveness in financial protection. 
  • Most states in India have completed a year of implementation of PMJAY but no evaluations are available of this important scheme.
  • PMJAY provided substantially larger vertical cover than earlier PFHI schemes in India but it has not been able to improve access or financial protection so far in the state. 
  • Though PMJAY is a relatively new scheme, the persistent failure of PFHI schemes over a decade raises doubts about suitability of publicly funded purchasing from private providers in the Indian context. Further research is recommended on such policies in LMIC contexts.


Healthcare in India is in a state of enormous transition: increased income and health consciousness among the majority of the classes, price liberalization, reduction in bureaucracy, and the introduction of private healthcare financing drive the change.

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