In India, nearly 65% of the healthcare spending is out of pocket by individuals. The remaining 35% is highly fragmented and comes from a number of central and state government funds, and insurance companies. The unprecedented healthcare crisis caused by the pandemic has brought a number of concerns about the effectiveness and sustainability of the healthcare system to the forefront.
The fiscal expenditure on public healthcare is only 1.4% of India’s GDP. The Employee State Insurance (ESI), which is one of India’s largest social security schemes, provides health insurance to nearly 36 million workers, but it has not been effective in providing reliable medical support to its beneficiaries during the pandemic. Even though this leaves a large share of the market available to the commercial health insurance industry, its penetration remains low.
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