Adverse Selection and Private Health Insurance Coverage in India

Financial barrier is still a dominant problem for access to necessary healthcare for
majority of the Indians. To ensure universal and comprehensive healthcare to its
citizens, alternative healthcare financing strategies like health insurance are being
widely accepted. However, despite health insurance being an equitable and efficient
solution, the health insurance coverage still remains at an infant stage in our country.
This study specifically addresses the issue of low level of health insurance coverage
with special reference to private health insurance. The study analyses the rational
behaviour of insurance agents in the scale-up process of health insurance in an
imperfect market. Moreover, the study discusses the impact of such rational behaviour
of insurance agents on inequity in health insurance coverage and adverse selection.
This study will surely add to the existing body of literature on health insurance and has
direct policy relevance.