Health Insurance Plans For Low Income Individuals in India

Explore the benefits of health insurance plans and government policies for individuals belonging to low income groups in India.
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3 min
28-February-2024

In India, health insurance is considered a necessity for all individuals to ensure that they have access to quality medical care without facing financial hardships. However, for individuals living below the poverty line (BPL), the cost of health insurance can be unaffordable. Recognising this need, various government initiatives and health insurance schemes have been implemented to provide financial protection to low-income individuals.

Health insurance for people below poverty line in India

The government of India acknowledges the need for affordable health insurance options for those living below the poverty line. Individuals identified as BPL are provided with various health insurance options by the government to ensure that they have access to quality medical care without facing financial difficulties.

List of health insurance plans for low income individuals

Discussed below are a few government health insurance policies in India:

  • Rashtriya Swasthya Bima Yojana
    The Ministry of Labour and Employment, Government of India, initiated RSBY to extend health insurance coverage to Below Poverty Line (BPL) families. RSBY aims to shield BPL households from financial burdens resulting from hospitalisation expenses. Under this scheme, beneficiaries qualify for in-patient healthcare insurance benefits tailored by respective State Governments based on local needs and demographics.
  • Pradhan Mantri Jan Aarogya Yojana (PMJAY)
    Ayushman Bharat PMJAY stands as the world's largest health assurance scheme, targeting to offer health coverage of Rs. 5 lakh per family annually for secondary and tertiary care hospitalisations. The scheme aims to benefit over 12 crores impoverished and vulnerable families. Selection of households is based on the deprivation and occupational criteria outlined in the Socio-Economic Caste Census 2011 (SECC 2011), tailored for rural and urban areas respectively.
  • Central Government Health Scheme
    The Central Government Health Scheme (CGHS) is a scheme for central government employees and pensioner. CGHS extends coverage to around 4.2 million beneficiaries across 80 cities nationwide, with ongoing efforts aimed at expanding into more cities to enhance service accessibility.
  • Mahatma Jyotirao Pule Jan Arogya Yojana
    The Mahatma Jyotirao Phule Jan Arogya Yojana stands as a prominent health insurance initiative of the Government of Maharashtra. This program offers comprehensive cashless services for specified diseases, covering a wide range of medical needs through a network of service providers from both the public and private sectors.
  • Employment State Insurance Scheme (ESIS)
    The main aim of the Government of India in introducing the ESI scheme is to provide coverage for workers facing various health-related challenges, including permanent or temporary disability, illness, or death resulting from work-related injuries or occupational diseases, which can affect their ability to earn or result in income loss. This scheme helps workers alleviate the financial strain caused by such unfortunate circumstances.
  • Pradhan Mantri Surakshit Matritva Abhiyan
    The Ministry of Health & Family Welfare (MoHFW), Government of India, has initiated the Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA). This program is designed to deliver assured, comprehensive, and high-quality antenatal care, free of charge, to all pregnant women on the 9th of each month.

How is health insurance for people with low income different from regular health insurance plans?

The table given below mentions the difference between health insurance plans for low income individuals and regular health insurance plans:

Aspect

Health insurance for low income individuals

Regular health insurance plans

Eligibility

Typically for individuals or families with incomes below a certain threshold set by the government or insurer.

Available to individuals or families regardless of income level.

Cost

Often subsidised or offered at reduced rates based on income level. Some programs may be free for those with very low incomes.

Premiums, deductibles, and co-payments are typically higher. Cost-sharing mechanisms may vary based on the specific plan and provider.

Coverage

Coverage may be more limited compared to regular plans. Typically covers essential health benefits but may have restrictions on certain services or treatments.

Generally offers comprehensive coverage. Coverage may vary based on the specific plan and provider.

Provider network

Limited provider networks may be available, generally government affiliated centres.

Typically have broader provider networks, allowing more choices in healthcare providers and facilities.

Government assistance

Often subsidised by government programs.

Generally, no direct government subsidies for premiums, although tax credits may be available to eligible individuals and families.

Administration

Administered by government agencies or contracted private insurers in collaboration with government entities.

Administered by private insurance companies, employers, or purchased directly by individuals or families.

Renewal process

Renewal process may require periodic reevaluation of income eligibility and may involve recertification.

Renewal process typically involves annual renewal without the need for income verification unless there are changes in circumstances.

 

Significance of health insurance plans in India

Health insurance plans play a pivotal role in India's healthcare landscape for several reasons:

  • Financial security: Health insurance offers a safety net against high medical costs, preventing financial crises and debt accumulation.
  • Accessible healthcare: It ensures access to quality medical services and facilities, particularly in urban areas where private healthcare dominates.
  • Critical illness coverage: Health insurance plans often cover treatments for critical illnesses, offering support during life-threatening situations.
  • Preventive care: Many plans include coverage for preventive healthcare services, encouraging regular check-ups and early disease detection.
  • Family protection: Policies often extend coverage to family members, safeguarding their health and well-being.
  • Tax benefits: Premiums paid towards health insurance are eligible for tax deductions, incentivizing individuals to invest in their health.
  • Promotes public health: By spreading awareness and providing financial security, health insurance contributes to overall public health and well-being.

Access to affordable healthcare services is a fundamental right for every citizen. The government of India has recognised this and developed policies and programs to provide health insurance options for low-income individuals. By bridging the gap between healthcare needs and financial resources, these schemes not only improve health outcomes but also contribute to the overall well-being and economic stability of the nation.

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