Too rich for govt schemes, too poor to go private — prepaid health card targets ‘missing middle’

Mumbai-based fintech firm QubeHealth's prepaid cards, with upper limit of Rs 10 lakh, can be used at any health facility or pharmacy. Amount spent can be repaid in interest-free EMIs.

New Delhi: Health finance for India’s “missing middle” — the segment that’s too rich to be covered by government health insurance and too poor to buy private insurance — has been one of Indian healthcare’s most stubborn problems. A three-year-old Mumbai-based fintech health-tech company has set out to change just that with its prepaid health card.

The idea that QubeHealth has adopted is simple. You can pay use the prepaid card to pay at point-of-sale machines, just like a credit card, but it can be used only at healthcare facilities and pharmacies.
Currently available only for companies to give to their employees — especially those not eligible for regular insurance — the card has a limit of Rs 10 lakh. The amount spent can be repaid over 24 months in interest-free EMIs.

Chris George, the co-founder and chief executive officer of QubeHealth, told ThePrint that the card was unique because users could use it not just for themselves and their immediate family, but also for friends and live-in partners. Using the card, he said, is as simple as “swiping your credit card to buy a washing machine”.

“It can be used in any machine powered by RUPay or Visa, and there are no restrictions on procedures, no restrictions on how many family members you can use it for,” he said. “You can use it even for friends or to buy medicines — [neither] of which normal health insurance would allow. There is no requirement [for an] empanelment,” he said.

The only condition is that the card must be used at a healthcare establishment.

“You cannot use it at Shoppers Stop,” he said, adding that about 30,000 such cards are already in use.

How it works
QubeHealth is a company that counts Inflection Point Ventures, the Keiretsu Forum, and Dabur Vice-Chairman Mohit Burman among its Indian and international angel investors.

Angel investors are individuals that provide backing to companies or startups, typically in exchange for equity in the company.

Companies opting for the card are required to pay an annual enrolment fee.

“There is also a small margin that hospitals give us on the packages that are bought. But the basic idea is to reduce out-of-pocket health expenditure in India,” he said.

Interest-free payment and fewer restrictions on its use are among the reasons why restaurant chain Nando’s recently chose QubeHealth for a section of its employees.

Ruchira Priyadarshini, director (people) at Nando’s, told ThePrint that the company had been using the card for the last two months for its blue-collar staff. Providing such staff with health cover is challenging, she said.

“First, the family size is usually bigger, and second, they earn less and have less savings,” she said.

Although such employees are usually covered under the Employees’ State Insurance Corporation (ESIC), they would have to go to ESIC hospitals, which are often not present in their villages.

“The QubeHealth card can be used everywhere and there is no bar on who it is used for,” she said.

QubeHealth is also at various stages of negotiation with companies including Indian fabric brand Raymond and co-work space solutions provider SmartWorks.

India’s ‘missing middle’

India’s public expenditure on healthcare is a little over 1 per cent, leaving vast swathes of the population vulnerable to bankruptcy when there is a catastrophic health expenditure situation.

It was to address this situation that the National Democratic Alliance (NDA) government launched the Pradhan Mantri Jan Arogya Yojana (PMJAY) — the tertiary care arm of Ayushman Bharat — in 2018. The scheme aimed at helping over 10 crore households with “deprivations” — as defined in the socio-economic caste census (SECC) of 2011 — to access healthcare.

Despite this, about 80 crore Indians (at an estimated average family size of five) were left out of the scheme’sambit. Health insurance penetration in India is pegged at 35 per cent.

In his foreword to NITI’s Aayog document last year on how to cover the “missing middle”, the think tank’s member (health) Dr V.K. Paul wrote that 30 per cent of India’s population — over 40,00,00,000 individuals — “still lacked any form of financial protection for health”.

“Adverse health events can lead to financial hardships, and even push them to poverty. This segment is termed as the “missing middle” because they are not poor enough to be covered by government-subsidised insurance but not rich enough to buy private insurance. The missing middle is characterised by informal employment with unstable incomes and [the] lack of social security benefits,” Dr. Paul wrote.