How COVID-19 medical costs are bankrupting middle-class families in India

by Atmanirbarananda Bharati*

I have been teaching at a reputed private college in a major Indian city for the past 35 years. My wife teaches at a high school. With our two steady incomes, we own a decent apartment, a Maruti car and have provided a good school and college education for our two children.

We have also been financially supporting our parents. Over the years, we have had short-term financial pressures from unforeseen expenses, like major repairs for the apartment or the car. Yet, by controlling our expenses, we have built a good savings for our retirement. But now the savings is rapidly depleting and our fairly comfortable lifestyle is under serious threat.

A month ago, I began getting calls twice a day from my sister about the condition of our 85-year-old dad. He was having headaches and breathing problems. They went to see a local doctor. He could not diagnose the condition, but said my dad should take Tylenol tablets to try and ease the pain.

But dad’s condition continued to worsen. None of his relatives in Hyderabad, in South India where my parents live, offered any help. Three weeks ago, I took leave from college, got a last-minute ticket on Air India and flew to Hyderabad.

Over the next three days, I took dad for a series of blood and other tests, including one for COVID-19 that cost Rs.3,500 ($50.) As I suspected, results confirmed that he had the deadly infection. He likely caught the virus when he went to visit a neighbor, some of whose family members were infected, to find out how they were doing. He says he was careful to chat with them from a safe distance, by standing outside their door. But he cannot recall if he wore a mask or not.  

My dad retired in 1993, after 33 years of teaching at a college in Hyderabad. His medical insurance ended when he retired since, like most private employers in India, the college did not offer it to retired employees. In India, only the central government and a few big private companies offer employees low-cost medical insurance coverage after they retire. Overall, about 85% of India’s population have no medical insurance coverage.

There is a free healthcare system run by the state and local governments. It consists of clinics where you can see a doctor and, for serious ailments, you can get treated at government-run hospitals. But their capacity is highly inadequate and the hospitals are few in number and located in cities and big towns. Middle-class families avoid using them because the level of care and hygiene may endanger lives instead of saving them.

The poor, who have no choice but to use the government services, wait in long lines at the clinics. They often find that the clinics do not have supplies of the drugs they are prescribed. Most patients, without the money to buy the drugs from private pharmacies, try to survive without them. At the government hospitals, there is a big waiting list and typically the wards are full of patients sleeping on the floor, due to overcrowding.  

In 2018, Prime Minister Narendra Modi started a National Health Protection Scheme with the goal of providing free health care for about 100 million poor families, or about 500 million Indians. But the central government provides only 60% of the costs, expecting state governments to cover the rest. Most state governments, with huge budget deficits, do not have the funds. Also, most private doctors and hospitals do not accept patients with the plan saying the government payments do not cover their costs. Some treat only those patients on the plan who pay cash upfront to cover the difference between the amount the government pays and the prices they charge for their medical services.

India ranks near the bottom in public healthcare services, 145th out of 195 countries and behind China, Bangladesh and Sri Lanka. Government spending on public healthcare in India totals 1.34% of GDP, less than half the 3.1% in China and 3.8% in Brazil.

There is no government-run safety net for retirees in India, like a pension plan for life. When he retired, dad got a lump-sum pension payment from his employer. That was enough to cover expenses for my mother, sister and him for only about ten years. After dad’s pension savings were used up, I have been sending them checks to cover their expenses.

When he retired, my dad did not purchase medical insurance since he was healthy and has healthy habits. These plans, sold by New India Assurance and other private insurance companies, are expensive. A policy offering coverage of 80% of medical and hospital expenses up to Rs 500,000 ($6,700,) for a 65-year-old in good health, costs over Rs.50,000 ($670) annually.

Even in cities and big towns, with large private medical practices and hospitals, private medical insurance is bought by only about 10% of retirees. In the case of the rich, they find it cheaper to pay for the medical costs directly. For most middle-class families too, it is far more economic to directly pay private doctors and hospitals for treating typical ailments than to buy post-retirement health insurance. Unless, as I am finding out now, there is a major unforeseen medical expense.   

After the test results found that dad had COVID-19, I decided to have him tested further to find out the extent of the infection and if he needs to be admitted to a hospital. Even if we wanted to, we could not take him to a government hospital since they were not taking any new patients and had long waiting lists.

I took dad to a private hospital in Hyderabad, which is run by a for-profit company. I paid Rs. 10,000 ($134) for a blood test and Rs. 6,300 ($84) for a chest scan of his lungs. Rates at private hospitals in Hyderabad vary from Rs. 24,000 ($320) to Rs. 70,000 ($935) per day depending on whether a bed is in a ward or a private room; and the hospital’s reputation for quality. Hospitals expect COVID-19 patients to stay for at least 3 to 7 days, depending on the extent of the infection.  

A pulmonologist looked at the test results and said my dad needs hospitalization for at least five days since he has a “mature infection.” The hospital admitted dad only after verifying that my credit card was valid and the total amount that could be charged to my account.

At the time of my dad’s admission, I signed for a credit card payment of Rs. 70,000 ($935.) I assumed that the daily hospital rate covered all costs. Each day I signed for more payments to the hospital. I was too distracted to look at the amounts, consumed by my dad’s health and the desire to get him treated.

At the end of his five day stay, I paid the hospital a total of Rs. 2,25,000 ($3,000) – which equals my salary for one and half month. Besides the hospital bed, there was a charge for everything including masks, gloves and gowns used by the nurses, doctors and other staff; also, Rs.7,000 ($95) for inedible food. 

A doctor at the hospital said dad needed seven doses of Covifor injections to help clear up the viral infection in his lungs. The drug is made for the Indian market by Hetero, under license from Gilead Lifesciences of the U.S., as a local replication of Gilead’s Remedesivir, an anti-COVID-19 drug. The doctor said the hospital did not have any supplies. It was up to me to find and pay for the drug. I called over 15 pharmacies in the city and finally, in heavy rain, found one that had the medication. I paid Rs. 38,000 ($510) for the seven vials, nearly twice its reported minimum price. It appears that a few major pharmacies control the supply and the prices in Hyderabad, and presumably elsewhere in India..

After the five day stay, we moved dad back to his apartment. It has two bedrooms and two baths. So, he is quarantined in one of them with his own toilet, which is said to be a major source of the virus spreading in India. My mother, sister and I are also quarantined in the rest of the apartment.

I bought an oximeter for Rs.999 ($13), and test my dad’s oxygen intake several times a day. Each week I spend between Rs. 12,500 ($170) and Rs. 25,000 ($340) to purchase oxygen cylinders. I spend an additional Rs 6,000 ($80) for a weekly supply of 80 tablets of Fabiflue, which is an anti-COVID-19 drug made by Glenmark. There are no cheaper, generic equivalents of the drug available.

My family and I are happy that dad’s condition has stabilized. I have a Ph.D. and studied in Europe and so consider myself rational and worldly-wise. Yet, in angry moods, I blame China for the COVID-19 infections and deaths in India.

When calm, I realize that the promises made by Prime Minister Narendra Modi in March, that he will do what is necessary to contain the virus and cure patients quickly, is a cruel joke. Since then, Infections in India have risen from a few thousand cases to nearly three million and about 55,000 have died, according to official statistics. As numerous reports point out, these official figures on the impact of COVID-19 vastly under-counts both infections and deaths. Several studies and experts predict that India will soon have the most infections around the globe. In a worst case scenario, the virus could continue to cause harm around the globe till 2025. .  

I have become more spiritual and read the Bhagavad Gita daily. I now realize that, in an emotional state, I perhaps made a mistake, medically and financially, to rush to get my dad admitted to a hospital. Maybe he did not need hospital care. His infection could have stabilized with the way we now treat him at home. This view is reinforced each day when I read news reports about investigations into hospitals and drug and medical services suppliers cheating and overcharging patients. I should have consulted with reputed doctors and done my own research on the best ways to treat an infected patient. A friend did this and had her parents treated at home.  

In between checking on my dad, I cook, clean and wash dishes and clothes, since hiring help risks infections. In two weeks, after the quarantine ends, I plan to move my parents and sister to the city where I work. They will live with my wife, our two children and me. It will be challenging to share the apartment, while also handling dad’s medical care.  

But then I can resume teaching and avoid the risk of losing my job. The weekly cost for my dad’s treatment will be much higher in the big city, further reducing our savings. I fear that, if dad does not recover, in about two years our savings will be gone, spent on his medical care.    

Yet, I see that my condition is not as bad as that of the hundreds I saw at the hospital. They were middle class folks, mostly from nearby towns and villages, who rushed to the city to get a relative treated. Some, who were told that their father or mother or son or daughter would not be admitted since they could not pay the full cost upfront, were crying outside the entrance. I saw others like them being taken out of the building by the hospital’s security guards. I would walk away as far as I could, wiping off my tears, when I heard women wail inconsolably upon hearing that a relative had died.

Many had borrowed money from big local landowners by pledging their farms and from money lenders by pledging their jewelry, motorcycles and even homes. The annual interest rates charged for these informal and illegal loans far exceed the official limit of 19%.

It is highly likely that most borrowers will be unable to pay the interest, let alone the principal to re-possess the assets. By taking on the loans, some desperate families I talked to effectively sold their assets at half, or even 10%, of their market value. I had read in academic texts that this is how big landowners acquire more land and money lenders get wealthier during a major economic crisis.

In the past, this transfer of wealth in India started mostly due to severe droughts and famines. This month, while waiting in a hospital lobby, I saw it triggered by the spread of a virus and fueled by the failure of government policies. Even in normal conditions, each year over 30 million Indians are pushed into poverty by major, unexpected health care costs. This number will be far larger this year and next; maybe till 2025.

I often have nightmares recalling the sadness on the faces of women and men I saw at the hospital, who have been pushed into poverty and possibly a life of bonded labor or modern day slavery.

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*Atmanirbarananda Bharati teaches at a college in India. He thanks Bibu Bose (@bose-bibu) for providing the health insurance data.