At least 30% of India’s more than 130-crore population has no health insurance, according to the government’s think tank NITI Aayog.

“…40 crore individuals are devoid of any health protection through insurance. They are not eligible under government-subsidized health insurance schemes and have not paid for private voluntary health insurance schemes,” said a report by the NITI Aayog.

There’s clearly a large “missing middle” population devoid of financial protection despite the ability to pay,” said the report. This cohort mostly comprises the self-employed (agriculture and non-agriculture) informal sector in rural areas, along with a variety of occupations including informal, semi-formal, and formal jobs in urban areas, it said.

Most health insurance schemes and products in the Indian market are not designed for the missing middle, it said. Voluntary private insurance is designed for high-income groups—it costs at least two to three times the affordable level for the missing middle, said the report.

State-sponsored Ayushman Bharat or the Pradhan Mantri Jan Arogya Yojana, launched in September 2018, and state government extension schemes, provide hospitalisation cover to the bottom 50% or 70 crore individuals.

Around 20% of the population or 25 crore individuals are covered through social health insurance, and private voluntary health insurance, according to the report.

The NITI Aayog recommended that the government can provide its data and infrastructure as a public good to reduce operational and distribution costs of insurers to cover this missing middle.

“The government can partially finance or provide health insurance. It can expand PMJAY coverage to the poorest segments of the missing middle population, and/or leverage national health authority’s PMJAY infrastructure to offer a voluntary contributory enrolment,” the report said.

The government and the private sector will need to come together to increase penetration of health insurance, VK Paul, member of NITI Aayog, said in a foreword to the report. “Private sector ingenuity and efficiency is required to reach the missing middle and offer compelling products.”

The report also proposed wider industry and government stakeholder consultations.