ESIS optimal for missing middle, says NCAER study
Missing middle is described as population groups engaged in informal sector work, and are not poor enough to benefit from State subsidized contributions to insurance premiums
image for illustrative purpose
New Delhi: A study by the premier think-tank National Council of Applied Economic Research (NCAER) finds the Employees State Insurance Scheme (ESIS) for the private formal sector ‘optimally placed’ to cater to the needs of the ‘missing middle.’
The missing middle is described as ‘population groups that are, or have been, engaged in informal sector work, and are not poor enough to benefit from State subsidized contributions to insurance premiums. We estimate that the missing middle number is at least 300-350 million in India, with large variations in their economic circumstances.”
The NCAER working paper, authored by Ajay Mahal, Vivek Panwar, Arun Tiwari, Rahul Reddy and Sumit Kane, favours the ESIS because of its national reach and wide coverage.
“While the ESIS has its issues too, it has all the features and building blocks for an integrated system to be initiated and kick-started quickly- and is well-placed to overcome the key bottleneck of fragmented care provision,” it said.
This is because the ESIS functions at a large enough scale, being the largest contributory risk pooling system in India, covering more than 100 million workers and their dependents with an existing mandate to provide health insurance coverage to all formal sector workers (earning less than Rs21,000 per month) and their dependents, the paper said.
The ESIS provides coverage through funding a network of dispensaries (primary care level providers) and hospitals. One possible extension of its responsibilities could involve ESIS expanding its coverage to include the informal non-poor in contributory health insurance, although this would first need strengthening ESIS functioning in health service delivery, the paper said.
ESIS’s recent opening of its hospitals and services to PM-JAY beneficiaries, and (implicitly) raising the opportunity to include the non-poor in the informal sector, presents a timely opportunity to attempt a potentially insightful natural policy experiment.
The ESIS is likely to require considerable enhancement of its capacity to manage its insurer role, including ways to greater accountability to its enrolees, by improving its healthcare services, and paying attention to equity objectives, the NCAER paper said.
