The Insurance Cascade Framework to Diagnose Bottlenecks and Improve the Effectiveness of Health Insurance Programs: An Application to India

Many low- and middle-income countries are looking to achieve universal health coverage by implementing large social health insurance schemes. India has been a frontrunner in this effort, introducing state and national health insurance schemes, especially for tertiary care. Despite these efforts, Indian households remain at risk of high out-of-pocket spending due to inpatient hospitalizations. We examine bottlenecks to the effectiveness of health insurance schemes in India by using the “insurance cascade,” a framework that traces the steps from enrolling eligible households to ultimately delivering their benefits at no charge. For each cascade step, we characterize potential constraints, discuss findings from existing literature, and describe what data could inform interventions to alleviate the bottlenecks. The existing evidence suggests substantial bottlenecks across all cascade steps, with especially large gaps in beneficiaries’ awareness of how to enroll in schemes, what the schemes cover, and how to access scheme benefits. However, there is limited evidence for other cascade steps and existing data sources lack information to determine where exactly on the cascade individuals are lost and what steps contribute most to the poor functioning of these schemes. More systematic and comprehensive data are required to fully characterize the cascade and to identify potential solutions.