The Road to Universal Health Coverage in India

The Road to Universal Health Coverage in India: A Flawed Insurance-Biased Model

India’s quest for Universal Health Coverage (UHC), operationalized largely through the Ayushman Bharat (AB) scheme, underscores a troubling pivot to insurance-heavy frameworks while neglecting systemic gaps in public healthcare. This approach, emblematic of fiscal expedience over foundational reform, risks deepening inequities and marginalizing the foundational principle of accessible, quality healthcare. The reality of India’s UHC today is less an inclusive safety net and more a fragmented patchwork favouring hospitalization-centric coverage over comprehensive healthcare.

The Institutional Landscape: Frameworks and Commitments

The foundation of UHC in India traces back to the Bhore Committee report (1946), which envisioned healthcare as a state-provided universal service rather than an insurance-based model. India’s National Health Policy (2017) reaffirmed the goal of achieving UHC, aligning with SDG-3 and its universal healthcare targets. Constitutionally, obligations under Part IV (Directive Principles of State Policy), specifically Articles 39(e), 42, and 47, cast a duty on the state to secure equitable healthcare for all citizens.

The operationalization of UHC, however, remains predominantly relegated to Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), offering hospitalization insurance to economically vulnerable populations. Crucially, this thrust on public financing of insurance raises questions about its efficacy as a model for comprehensive healthcare provisioning, particularly in a country where public health expenditure remains stagnant at 2.1% of GDP—below the NHP target of 2.5%.

The Argument with Evidence: Systemic Flaws in the Insurance-Led Approach

The insurance-centric model of AB-PMJAY addresses financial protection during hospitalization but perpetuates the deeper neglect of primary and preventive care. NSSO data reveals that 63% of healthcare expenditure comes out-of-pocket, resulting in catastrophic consequences for vulnerable households. In fact, 23% of households incur debt just to meet medical costs, despite Ayushman Bharat coverage.

Infrastructure disparities exacerbate the issue. Rural India, where 65% of the population resides, is served by only 37% of health workers. Poorly equipped Health and Wellness Centres (HWCs) meant to act as gatekeepers fail to address preventive and promotive needs. Instead, the reliance on insurance schemes drives patients directly to tertiary hospitals, clogging higher-order facilities while leaving early-detection mechanisms underutilized.

Moreover, fragmented governance inherent in the federal structure further dilutes outcomes. Health is a State subject under the Indian Constitution (List II of the Seventh Schedule), yet the funding and policy direction are increasingly centralized through flagship schemes like AB-PMJAY. This mismatch has bred uneven access across states—while Kerala capitalizes on strong public healthcare infrastructure, states like Bihar and Uttar Pradesh struggle to even meet the minimum adequacy benchmarks.

Institutional Critique: Structural Tensions in UHC Policy

Firstly, the disproportionate emphasis on insurance-driven models overlooks the chronic underinvestment in primary healthcare infrastructure. The Centre’s claims of expanding HWCs and comprehensive care provision falter against budgetary inadequacies. The 2023 Union Health Budget allocated only ₹89,250 crores, with less than 20% earmarked for primary healthcare—a glaring shortfall given the fiscal demands of achieving genuine UHC.

Secondly, regulatory interventions remain toothless in controlling private sector malpractices. While AB-PMJAY relies heavily on private hospitals for care delivery, there exists no standardized regulatory framework for cost control, quality of care, or accountability mechanisms. The National Green Tribunal’s stringent oversight over environmental norms could offer a model for similar statutory regulation in healthcare.

The Counter-Narrative: Making Insurance Work?

Defenders of the insurance-led model argue its immediate fiscal feasibility and its ability to cover catastrophic costs. Countries like South Korea achieved substantial insurance coverage and reduced poverty-driven healthcare exclusion. By incentivizing private sector participation, India’s AB could theoretically stimulate clinic expansions and improve hospital accessibility.

However, sustainability here is questionable. South Korea itself has since bolstered its primary healthcare system to regulate escalating costs and ensure continuity of care—a lesson India must heed. The argument for fiscal ease also discounts human rights commitments inherent to UHC; providing access only during terminal crises, to the exclusion of preventive services, is an incomplete and inequitable solution.

The International Perspective: Lessons from China

China’s shift from insurance-heavy to a prevention-first strategy holds critical lessons for India. Initially reliant on universal insurance coverage, China faced unsustainable fiscal burdens and care inefficiencies. In response, it invested in primary care networks, strong population outreach, and enhanced disease surveillance mechanisms—steps complemented by robust public sector oversight.

A parallel shift in India would involve transforming HWCs into active agents of comprehensive care, equipped with diagnostics, medicines, and referral systems. China's example demonstrates how integrated public systems can counterbalance insurance gaps, ensuring fiscal sustainability and equitable access.

Assessment: Towards Universal Healthcare, Not Universal Insurance

India’s path to UHC urgently demands a pivot from hospitalization-centric insurance schemes to strong public health provisioning. Raising healthcare investment to 2.5% of GDP, aligning insurance models within robust primary and secondary care structures, and empowering panchayats under Article 243G could address systemic gaps.

The next steps should include workforce expansion through localized recruitment, leveraging technology for health records and disease surveillance, and statutory regulations to hold private providers accountable. India’s commitment to UHC cannot rest on fragmented patches—it must evolve into a holistic, inclusive, rights-based framework.

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