New Delhi The Narendra Modi government may launch a universal health insurance scheme if elected for a third term to cover what experts call the “missing middle” — about 400 million citizens, largely casual labourers or the self-employed or gig workers who are neither under the Ayushman Bharat scheme for the poor nor have any paid-for health insurance, two people aware of the development said.

The scheme is being worked on and is part of Prime Minister Narendra Modi’s vision to provide insurance cover to all in his government’s third term, they added, asking not to be named. While launching new projects and inaugurating completed ones worth ₹48,100 crore in Rajkot, Gujarat on February 25, the Prime Minister said: “When Modi guarantees to make India the world’s third largest economic superpower, the goal is health for all and prosperity for all.”

To be sure, the government has several insurance schemes covering the poor and vulnerable, as well as farmers. Central government employees are covered under Central Government Health Scheme (CGHS), some states have similar schemes for their employees, some private sector firms provide contributory medical cover to their regular staff, but around 400 million casual workers, self-employed and gig workers have no protection against rising cost of medical treatment and the government is thinking about them, the two people said.

The missing middle also includes senior citizens, one of the two added, referring to a NITI Aayog report on this matter — Health Insurance for India’s Missing Middle — which was released in October 2021.

According to the report, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), launched in September 2018, and state government schemes provide comprehensive hospitalisation cover to the bottom 50% of the population, estimated to be around 700 million people. About 250 million people are covered through social health insurance and paid-for health insurance. The balance – both in urban and rural areas – is the uncovered population or the missing middle.

“The report stressed on the need to design a low-cost and comprehensive health insurance product for the missing middle. The matter is under consideration with some kind of government support (subsidy on premium) to nudge this group to opt for the scheme,” the second person said.

Efforts are on to gradually move to “insurance for all” and the Department of Financial Services (DFS) and the Insurance Regulatory and Development Authority of India (IRDAI) are on the same page in this effort, this person added.

The finance ministry did not respond to an e-mail query. On November 25, 2022, IRDAI gave a call for “Insurance for All by 2047” where every citizen will have appropriate life, health and property insurance cover.

“Insurance for all is a mission and it may also require changes in laws. IRDAI is working on it,” the first person said. “A periodic review of the regulatory framework will be a continuous exercise to ensure that it is in sync with the emerging trends and dynamics of market and serves the intended objective of ‘Insurance for All’,” IRDAI’s mission statement said.

India’s insurance coverage – both life and non-life insurance – is not commensurate with its economic growth, the second person said. “The non-life insurance penetration, which also includes health coverage — measured as the percentage of insurance premium to gross domestic product (GDP) — in India is minuscule,” said the official. It was 0.56% in 2001-02, which went up to 1% in 2022-23. The penetration of life insurance during this period went up from 2.15% in FY02 to 3% in FY23. In terms of density — the ratio of premium to population (or per capita premium) — non-life insurance density increased from $2.4 in 2001-02 to $22 in 2022-23, said the official. The density of life insurance during the same period rose from $9.1 to $70, the person added.