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The biggest headline of Budget 2018 was the National Health Protection Scheme or what some pundits are referring to as ‘Modicare’. Under this scheme, the government claims that it will provide medical insurance of Rs 5 lakh to 10 crore families. But how will the government finance this scheme? Is it feasible for the government to implement such a massive scheme? The Quint decodes these questions.
India has approximately 25 crore families. The scheme says that about 10 crore families will be given yearly cover of Rs 5 lakh. However, the claimant should be suffering from a serious illness.
Assuming that each family has an average of 5 members, the scheme will cover as many as 50 crore people, which is more than the population of US. At the ideation level, it is indeed a grand scheme.
But how will this idea be implemented?
Many Unanswered Questions
Q1. How will the scheme be financed and have the finances been arranged?
According to the budget papers, only Rs 1,469 crore more have been allocated for FY 2018-19 as compared to FY 2019-20. This increase doesn’t seem to be enough to cover the ‘grand healthcare scheme.’
So how will the government arrange for the remaining funds?
Experts believe that to provide an insurance of Rs 5 lakh per family, an yearly premium of Rs 4,000-5,000 will be needed. This means that for 10 crore families, Rs 40,000 crore to Rs 50,000 crore can be raised. But there is no mention of this process in the budget.
According to ANI, government sources have said that government will charge a premium of Rs 1,100 per year for a family which will help them raise around Rs 11,000 crore. If that is the case, then how will the government provide the scheme at Rs 1,100 when it actually costs Rs 4,000-5,000?
Q2. How will the 10 crore families be selected?
According to government records, approximately 6.75 crore families live below the poverty line. But some states don’t have an efficient mechanism to keep track of BPL families. So, what will be the procedure to select the beneficiaries?
Q3. Will Centre and State Share the Scheme’s Cost?
It’s already unclear that how much premium per patient will be needed to pay for this scheme. On top of that, there is no clarity on who will bear the burden of the money that isn’t raised by premiums. Will it be taken out from the Centre’s kitty? Or will states be asked to pitch in?
Q4. How will it affect the pre-existing insurance schemes?
National Health Insurance Scheme was implemented in 2008, under which families below the poverty line were provided with insurance worth Rs 30,000. In 2014, the cap on this scheme was raised to Rs 1 lakh and Centre was accountable for 75 percent of the scheme’s expenses, while states took care of remaining 25 percent.
Once the National Health Protection Scheme is implemented, will the other schemes like the National Health Insurance Scheme continue or merge or be discontinued?
This is the government’s last complete budget, so no wonder they have made a mega promise. But a person only needs insurance when they fall ill. So why fall ill? Early to bed and early to rise, Yoga will keep you healthy for life.
(This story was first published on Quint Hindi)