A number of major insurance plans have announced that they will begin to offer defined-contribution options.2 This may be attractive to employers, whose liability will be defined by a specific premium amount rather than by a specified set of benefits. Consumers will be expected to shop for their own care with a medical spending account coupled with catastrophic benefits for very large expenses. This could significantly undermine the current pooling of risk and create incentives for overuse of high-technology services once a deductible for catastrophic benefits has been met. However, such plans have yet to assume a significant role in the insurance market, and few employers offer them as an alternative. Managed care is undergoing rapid changes, some of which are likely to further undermine its viability.
The largest segment of the PPP initiative is the tax-financed program, Rashtriya Swasthya Bima Yojana . The scheme is financed 75% by the central government and 25% by the state government. This program aims to reduce medical out-of-pocket costs for hospital treatment and visits by reimbursing those that live below the poverty line.