National health scheme to cost govt Rs 12K cr a year

The Union government is likely to pay an annual premium of less than Rs 1,200 per family for the ambitious national health protection scheme, for which approximately Rs 12,000 crore is required every year.

For 2018-19, the government has made an initial provision of Rs 2,000 crore and an extra Rs 800 crore is expected from the states, when they join the scheme. Some money is also expected from the enhanced health and education cess.

Taken together, the resources are adequate to launch the scheme, most probably on October 2, say government officials.

Union Finance Minister Arun Jaitley on Friday said the scheme, dubbed as the world's biggest health cover plan that provides medical insurance to 50 crore individuals, would be cashless and not a reimbursement scheme.

There are two routes to implement the scheme - buying insurance from a private company or involving a government-supported trust to provide the insurance cover. It would be left to the state governments to decide which model they would like to adopt.

"The scheme takes care of hospitalisation, 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 a reimbursement model since there are too many complaints about this model," Jaitley said.

Asked whether the scheme would provide a profiteering opportunity for insurance companies, health ministry sources told DH that insurance firms would be asked to keep their administrative cost and profit collectively below 20%.

Currently, 24 states run health insurance schemes for the poor. The officials hoped that most of these schemes would be merged with the new programme. The Rashtriya Swasthya Bima Yojna too would be subsumed into it.

The ambitious scheme that is being hailed as Modi-care by the ruling dispensation, is yet to be approved by the Expenditure Finance Committee under the Union Finance Ministry and by the Cabinet. "We have just circulated an EFC note," said health ministry sources.

Union Health Minister J P Nadda said the Union government would provide 60% money for the scheme and the balance would come from the states. It would provide cover to the geriatric population.

Though the scheme would be Aadhaar linked, eligibility would not be denied to those not having the unique identification card.

"The scheme would change India's socio-economic scene by preventing bankruptcy of many families due to healthcare costs. It will improve India's economic productivity," Nadda said.

The rising out-of-pocket expenditure on health is one of the biggest ills facing millions of Indians. It adversely impacts the finances of 62% of the population, according to the Economic Survey.