‘Modicare’ Health Cover Plan to be Cashless: Arun Jaitley

National Health Protection Scheme envisaged to provide medical cover of up to Rs 5 lakh to over 10 crore families.

National Health Protection Scheme seeks to provide medical cover of up to Rs 5 lakh to over 10 crore poor and vulnerable families.

(Photo: iStock)

Finance Minister Arun Jaitley on Friday, 2 February, said that the world's biggest health cover plan announced in the Budget will be cashless and not a reimbursement scheme, and promised more funds if required.

The National Health Protection Scheme (NHPS), touted as 'Modicare', seeks to provide medical cover of up to Rs 5 lakh to over 10 crore poor and vulnerable families, constituting 40 percent of total population. It is likely to be launched either on 15 August or 2 October, sources told PTI.

It takes care of hospitalisation, the secondary and tertiary care. Obviously, it will involve various state hospitals and selected private hospitals. It can be on trust model, it can be on insurance model. It’s not on reimbursement model because too many complaints come on the reimbursement model.

Arun Jaitley

The model is now being worked out between NITI Aayog and Health Ministry. If assuming the model to be insurance led, the premium shrink with the increase in number of policy holders, Jaitley said at an event organised by Open magazine in New Delhi.

The scheme, although appreciated by experts, raises apprehension about its implementation and the initial corpus of just Rs 2,000 crore.

Assuring that the scheme will be entirely state funded, Jaitley said initial funds of Rs 2,000 crore have been allocated and whatever funds required, as the scheme rolls over, will be made available.

However, a Reuters report quoting a government official revealed that the scheme would require Rs 11 thousand crore in federal and state funding each year.

In the coming year, I see more comfortable situation as far as revenues are concerned because the graphs as far as direct tax is concerned would move very fast.

Arun Jaitley

Following demonetisation and implementation of Goods and Services Tax, the number of direct tax assesses have gone up... once anti-evasion measures, I do expect a little bump up in the GST collection also. I don’t see revenue to be a major challenge in that.

The Finance minister also advocated that the central and the state government can pool in resources for health care to achieve efficiency.

He also emphasised on having better hospitals in rural areas, even though Tier-I and Tier-II cities have good hospitals.

Setting up of hospitals in various districts is the state subject under the federal structure, he added.

(With inputs from Reuters)