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May 01


Covering Aurovilians' health costs

- by Carel

The majority of Aurovilians have no health insurance. But the costs of hospitalization can be excessive, as has been testified in a number of cases. What is being done about it? So far, not much.

India's public health care system, which aims at providing free or subsidized 'Health for All,' is known to be under severe financial constraints. Public hospitals are under-funded, understaffed and the treatment provided can consequently be of poor quality. The huge demand has even led to access problems for the very poor, forcing them to visit private hospitals or clinics and accept more expensive treatments. Those who are admitted to public hospitals still have to meet many incidental expenses that are not provided freely. Even patients from the lowest income groups often pay considerable amounts for medicines, laboratory tests, dressings, linen and food, and sometimes also for treatment itself. The higher income groups tend to avoid public health services if possible, and go to private clinics instead.

The financial burden on households and individuals to cover sudden health care expenses can be excessive, particularly for individuals who are not or not adequately insured yet who expect the best treatment available. Aurovilians, almost without exception, fall into this category.

This is not to say that all Aurovilians lack coverage for health costs. For the 300 or so Aurovilians who depend on the community for their monthly maintenance, Rs 175 per person per month is set aside in an internal health care fund, which is administered by the Health Care Group. This fund aims at covering all medical expenses of these Aurovilians, both those connected with hospitalization as well as out-patient care. In order to minimise the costs of hospitalisation, the members of the Health Care Group sometimes prescribe the choice of hospital. They also check all medical bills that are submitted. It will therefore come as no surprise that the experience of working for the Health Care Group has not been enjoyable, as they are subject to a lot of psychological pressure.

The majority of the Aurovilians, that is all those who are not or only partially dependent on a community maintenance, have so far been left to their own devices to find a means to avoid or reduce unexpected health service expenditure. The costs of hospitalisation nearly always take the lion's share of these expenses. Though still low in comparison with hospitals in Europe or the USA, the costs of hospitalisation are nevertheless on the increase in India. Open heart surgery recently cost an Aurovilian approximately Rs 3 lakhs (US $ 6,500); an Aurovilian who needed a hip replacement had to pay over Rs 1.2 lakh (US$ 2,600); a hernia operation cost Rs 1 lakh (US $ 2,200). There are many more instances where Aurovilians, faced with an sudden high expenditure for health care, ended up paying from their private resources. None of them were insured. Why?

One of the reasons is that most Aurovilians are unaware of the possibilities of having a health insurance. But they do exist in India. The Indian General Insurance Corporation, set up by the government as a public sector undertaking to market a wide range of insurance services, has introduced the 'Mediclaim' health insurance scheme, which is now available from most Indian insurance companies. The standard policy covers only the reimbursement of hospitalisation and related expenses. It does not cover any out-patient care and has, as does any insurance, a number of exclusions. The premium differs for various age groups, but is relatively low. For an insured sum of Rs 2 lakhs ((US $ 4,300) the yearly premium for someone in the age group between 45-55 years is about Rs 3,000. (US$ 65). As India has recently opened its insurance market to the private sector, it is expected that soon more companies will offer health insurance.

While many individual Aurovilians are not aware of the existence of health insurance in India, the Economy Group certainly was. As early as June, 1998, its attention was called to the possibility of taking out a collective Mediclaim insurance for all Aurovilians. However, the Economy Group never followed up on this. Instead, some of its members expressed a preference to cover all medical expenses of all Aurovilians and newcomers through an internal fund, rather than 'going outside.'

A recent development is that the Health Care Group, after studying the implications of this preference, has concluded that this move would most probably be financially unfeasible for Auroville (the community, with only 1500 members, is judged by experts as 'too small' for an internal health insurance system and there is an aging population) and would also place too heavy a burden on the members of the Health Care Group as their work would more than double. Instead of fully covering all medical expenses internally, the Health Care group has now proposed that Auroville goes for a mixed system, e.g. a collective health insurance from outside, together with an in-house Health Care Fund. The latter would then cover any costs exceeding the health insurance coverage plus the costs of out-patient care. The proposal has the advantage that a major part, if not all of the costs of hospital treatment - which are the major health care costs - would be covered by the insurance. Since the insurance allows the individual a free choice of hospital anywhere in India, it has the additional advantage that the individual can make his/her own choice of hospital and choose what he or she perceives as the best treatment available, instead of burdening the Health Care Group with making an impossible decision.

It is hoped that a decision will be taken soon. For those not presently insured, such a decision is long overdue.

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