Health Savings Accounts Come to India

India has developed a program to care for its poor that could be a model for how U.S. Medicaid should work. The Wall Street Journal reports Indian families who earn less than $100 per year qualify for a health debit card worth up to $700 in medical care. Prices are set by the government but hospitals are free to decide whether they want to enroll in the program and accept the card or not.  For instance, a day in intensive care might cost up to $23 per day at the card reimbursement rates. The card is good at both public and private hospitals that have enrolled in the program.  The card system functions very much like health savings accounts with some of the same consumer-driven incentives to manage costs wisely.

 India Smart Card

A hospital ID card, right, and a health-care smart card, left.

The card allows family members to choose where they wish to receive care. Although the program is bankrolled by the government to the tune of $1 billion dollars, the card is administered by private insurers. The program launched in April has already drawn 1.5 million enrollees.  The government hopes 60 million more will join buy the 1st anniversary of the program.

India already has a robust private health care market.  It is common for Indian hospitals to quote prices in advance.  Prices are competitive and closely resemble actual costs.  This type of card should not lead to the market distortions that occurred in the United States after Medicaid and Medicare came into existence. If India's poor deserve control of the health care dollars that pay their medical bills, does America's Medicaid population deserve any less?

Comments (1)

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  1. Anna Starikovsky says:


    Your article was interesting. Have you heard anything more recent about India’s plans to do this? I work for a radiology nonprofit founded by Johns Hopkins radiologists, and we would like to help establish an incentivized savings plan for some regions in India so that poor patients can save up for their basic radiology services (prenatal care, bone density scans for malnutrition, cancer).

    Kind regards,