Indian Weavers Shun Health Plan - WSJ.com

By VIBHUTI AGARWAL

PANIPAT, India -- Amir Jahan can spin thick, white thread into magnificent cloth, but the 46-year-old weaver has been unable to unravel her health plan to pay for stomach surgery.

Under a health-insurance program introduced a few years ago, the Indian government has provided health-insurance coverage for the country's hand-loom weavers, a group of 6.5 million workers, 60% of them female, who are mostly illiterate and invariably poor. Yet holding an insurance card hasn't helped Ms. Jahan, who says the coverage only pays for minor ailments and not for major problems, such as the removal of a stomach tumor.

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Vibhuti Agarwal/The Wall Street Journal

Amir Jahan spins thick white thread into magnificent cloth. She puts in 12 hours of work every day to earn about $15 a month.

"The health care is all a sham," Ms. Jahan says angrily. "I was refused treatment on grounds of huge expense. I won't ever go to be humiliated again."

Ms. Jahan's health-care issues represent the problems that come with trying to provide insurance to India's poor. Access to quality care remains a distant dream for many in this country of 1.1 billion.

Last year, the Indian government launched the National Health Insurance Program on promised health coverage of $700 per person for families earning less than $100 a year.

Holders of health cards have to register in their home states to access benefits, thereby precluding a large population of migrant laborers. Those who can get past the complex state-identification and qualification process often can't cope with hospital bureaucracies.

One of the biggest problems: Getting the impoverished weavers to pay $1 for the card that provides free access to health care for one year. Many weavers feel the investment in the card is a waste of valuable household income.

Other plans aimed at farmers, construction workers and other low-income groups have been dogged by problems.

In India, the hand-loom industry is the second-largest segment in the economy, after agriculture. The Handloom Weavers Health Insurance Program was backed by a private insurance company, ICICI Lombard General Insurance Company Ltd., a joint venture of India's ICICI Bank Ltd. and Fairfax Financial Holdings Ltd. of Canada.

An initial payment of $1 entitles a family of four to coverage totaling 15,000 rupees, or about $300 -- but no more than $150 of that can be for any one family member. Beneficiaries receive coverage at designated hospitals and clinics, or are reimbursed for treatment at centers not on the list -- after upfront payments that can be difficult for weavers to afford.

According to insurance-company officials, the program has been implemented in 26 states across India, and covers 1.9 million weaver families. In the Lalahar Memorial Prem Private Hospital, here in Panipat, nearly 70 weavers line up each day for health services under the plan.

Many weavers work six days a week in factories, under poor conditions and with few benefits. Others, like Ms. Jahan, work from home, making clothing, rugs and other woven items for a variety of companies.

Ms. Jahan started working at the age of eight. Today, she says she works 12 hours, seven days a week, to earn about $15 a month. That isn't enough to support her seven kids, and the insurance card can only cover four family members.

Ms. Jahan's stomach surgery was $200, but she was told she could only use $150 from the card because of the spending cap for each family member. The remaining $50 had to be paid from her own pocket. She continues to work with the untreated stomach tumor.

The ICICI doesn't deny treatment to any individual, but "the weavers think it is an ATM card and want to get it cashed to the maximum limit," said ICICI manager Milan Maheshwari, based in New Delhi. "The government has fixed a cap, so that the benefits … can be extended to the entire family."

One of the program's goals was to cut out government intermediaries. In a past program, the Indian government was running a health package for the weavers that involved complicated payment procedures that deterred many participants, according to B.K. Sinha, development commissioner of hand-looms at the Ministry of Textiles in New Delhi.

The new program has won support among those who have been able to get long-neglected medical problems addressed. Working 12 hours a day on the loom from her dimly lit house, Janmati, who uses one name, suffered from blurred vision before she had eye surgery for $80 through the health card.

"Initially the hospital authorities hesitated, but finally agreed," says Janmati. "Thanks to the card, I got my vision back."

But broad participation hasn't panned out. The government acknowledged that only 40% of weavers are covered under the health program.

Insufficient funds -- 1.2 billion rupees ($25 million) preclude covering more, even if the weavers are willing. Nevertheless, "We intend to cover every handloom weaver in the country in the next two years," Mr. Sinha says.

On a simmering afternoon in Panipat, outside India's capital of New Delhi, a group of irate weavers surrounded an insurance agent to complain about the health-insurance scheme.

Mohammad Ali, 25, said he was denied treatment at one of the private hospitals in Panipat and ended up paying from his own pocket. Another man, Mohammad Irshad, grumbled that he couldn't get his wife covered under the same card because he couldn't provide proper identification for her. "Getting the insurance card is tedious," he says.

Write to Vibhuti Agarwal at vibhuti.agarwal@wsj.com