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Unit 4: The Employees’ State Insurance Act, 1948: Definitions, Scope and Objective

Notes
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Case Study The Role of ESIC in Universal Health Care

edical care is widely regarded as the foremost concern of a social security
system since health is important to all age groups and all categories of people.
MAll comprehensive social security programmes therefore make provision for
medical care. It is one of the benefits to be provided on a universal basis under the Social
Protection Floor programme envisaged by the ILO.
Improvement in the health status of the population by providing access to healthcare and
facilitating utilisation of health, family welfare, and nutrition services with special focus
on the underserved has been the main thrust of social development programs in the
country. The responsibility of building infrastructure and manpower rests with the State
Governments, supported by funds from the Central Government. Major disease control
programmes and family welfare programmes are funded by the Centre (some with
assistance from external agencies) and are implemented through the infrastructure provided
by the States.
There are a variety of arrangements available for providing healthcare to people in India.
They consist, from the point of view of financing, of social assistance programmes, social
insurance schemes including the Employees’ State Insurance Scheme (ESIS) and Rashtriya
Swasthya Bima Yojana, health insurance schemes introduced by State governments, and
health insurance schemes run by insurance companies in the public as well as private
sector. As far as the Actual provision of healthcare services is concerned, there are hospitals
and dispensaries being run by Central and State Governments, including the Central
Government Health Service Scheme, the Railways Health Service Scheme, Defence Services
Health Service Scheme, the Employees’ State Insurance Corporation (ESIC), as well as
hospitals and dispensaries being run by private and voluntary agencies.

Yet coverage of all these arrangements is limited and there is a wide gap between demand
and supply for these services. In order to bridge this gap, the Approach to the Twelfth Plan
approved by the Government envisages the introduction of a Universal Health Care
Scheme. The Planning Commission High level Expert Group on Universal Health
Coverage, under the chairmanship of Prof K.Srinath Reddy, has recommended interalia
that the National Health Package be financed by the State with services being provided by
public as well as private institutions. The Committee has further recommended that
insurance companies (for-profit ones) not be used for the purchase of healthcare on behalf
of the Government.
There is however lack of clarity about the role of various agencies in providing healthcare.
In particular, the policy papers are silent about the role of the Employees’ State Insurance
Corporation.

The ESIC is a statutory corporation responsible for administration of the Employees’ State
Insurance Scheme framed under the Employees’ State Insurance Act. This scheme was,
until recently, the only social insurance scheme in the country. The main objective of the
Scheme is to provide certain benefits to workers and their families in the event of sickness,
maternity, employment injury or death of workers.
Of all the services offered by the ESIC, the Corporation attaches the greatest importance to
medical benefit; bulk of its funding is used for providing this benefit. Medical benefit is
Contd....

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