Govt Plans Rs 1 Lakh Crore Covid Fund For Helping Uninsured Citizens With Heath, Jobs, Food

The second waveof Covid-19 has taken the entire country by storm and India in order to help uninsured citizens whose incomes or health get hit by Covid, is contemplating to set up a pandemic pool worth at least ?1 lakh crore.

As only 4-5% of India’s population is covered under the health insurance, this move is aimed to help the country’s large population of uninsured people handle losses in incomes and offer them financial support to handle hospitalisation costs.

One of the three people, who are in involved in this policy, said under the condition of anonymity that the work on creation of a pandemic pool for the uninsured population is currently at an assessment stage. Currently, the team is in talks with the Insurance Regulatory and Development Authority of India (Irdai) and the Reserve Bank of India (RBI) regarding the same.

Various parameters in the creation of the pool :

• Number of positive cases
• Proportion of hospitalization cases
• Impact on their incomes
• Nature of their livelihood
• Sustainability of their businesses or source of income
• Medical infrastructure available to them
• General comorbidities among the age group of the most-affected low-income population
• Proportion of recovery
• Costs involved at various stages of infection
• Demographics of the most-affected population by the virus
• Average cost of their living

Prior to launching the pool it is important that the range of the parameters are assessed, the pricing of the pool as well as the contribution to be made by the government, health insurance companies, and other public stakeholders can be calculated.

Government shall initially contribute at least half of the pool’s corpus, while rest shall be coming from the health insurers and from life insurers at a later stage.

The healthcare infrastructure of the nation is currently overstreched as the nation gets new 300,000 coronavirus cases each day.

The non-health aspect of the same is also worrisome as lockdown and restrictions have severely affected the livelihoods of those who depend on services and small businesses.

Only 10 out 130 crore Indians Insured

The states and health insurers jointly bear the costs of claims for government’s health insurance scheme—Ayushman Bharat—for the extremely poor under which as many as 100 million have been covered. However, a major part of India’s population still remains uninsured and hence vulnerable, especially the lower strata which in turn comprises the majority.

Lakhs of citizens, when a pandemic hits, are neither able to insure their health nor their small businesses and as many of them lose their basic income source are pushed into acute distress in case someone from the family gets hospitalised. Also, at least ?200,000 is required on an average if a patient gets hospitalised due to Covid-19.

IRDAI, previously also floated a proposal to create a pandemic pool. This was shelved by the government in the light of decline in the number of cases.

Focusing on risk considerations of business continuity, a working group with representatives from the insurance and reinsurance industry formed by IRDAI are working to explore the option of creating an Indian pandemic risk pool.