Implementation of the Narendra Modi Government’s ambitious National Health Protection Scheme (NHPS) to cover 10 crore poor families with Rs 5 lakh health insurance will not be a child’s play as the Budget allocates only Rs 2,000 crore for the programme.
The Government plans to roll out the scheme in the next fiscal in October. According to the sources, the estimated cost of insuring each family would be about Rs 1,100. If that amount is taken into account, the total premium outgo per year will be around Rs 11,000 crore annually.
While at a Press conference on Friday Union Health Minister JP Nadda said the nitty-gritty of the programe are still being worked out, at another media interaction, his cabinet colleague Union Finance Minister Arun Jaitley said it will be cashless and not a reimbursement scheme. He also said the programme will be launched in the next fiscal.
He said more funds will be doled out depending on the rollout later next financial year. The Government has kept some cushion to fund the scheme as it replaced the current 3 per cent education cess with 4 per cent health and education cess with an aim to garner additional Rs 11,000 crore.
“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,” he said.
The model is now being worked out between NITI Aayog and Health Ministry, he said adding the date of implementation would be next financial year and sometime in the course of the year it will be worked out. If assuming the model to be insurance led, the premium shrink with the increase in number of policy holders, he said at an event.
“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,” Jaitley said.
Niti Aayog advisor Alok Kumar said that while the Centre will bear an annual burden of around Rs 5,000-6,000 crore towards premium on health cover, the remaining amount will come from the State Governments.
Kumar said that the premium for each household for the insurance cover would work out to be between Rs 1,000 and Rs 1,200, which will be borne by the State.
The entire premium outgo of health insurance was Rs 30,392 crore in FY17 covering 43.75 crore people as per the latest annual report of Insurance Regulatory Development Authority (IRDA).
The Government proposes to implement NHPS by replacing the Rashtriya Swasthya Bima Yojna (RSBY) which covers 37.2 million families with health insurance of Rs 30,000. It accounts for three-fourths of total insured in the country. However, RSBY has been fraught with problems of transparency and poor service delivery. Given the low coverage, private healthcare providers kept away from the scheme.
In different districts, insurers are selected on the basis of a competitive bidding process. The actual annual premium works out to be Rs 300-400 across the regions. The Centre and the state divide the subsidy based on a pre-determined formula of 3:1. Number of states participating in the RSBY has dwindled, with only eight states utilising the money disbursed to them under the scheme. Unlike RSBY, the NHPS policyholders will have a fully pre-paid smartcard that will allow for maximum deductions of Rs 5 lakh per year.
Not everyone are excited about the scheme. While some point towards the execution - other expressed apprehension over putting healthcare in the hands of private healthcare providers and insurance companies when they are poorly regulated.
They were also instances of scams - such as one in Rajasthan where a leading private insurer was accused of siphoning funds from the government on names of ghost beneficiaries.
Habil Khorakiwala, the chairman of the Rs 4,000-crore Mumbai-based Wockhardt group expressed apprehension over the Government’s track record of implementation citing the experience of the RSBY scheme. Khorakiwala also pointed out s chronic shortage of medicines, lack of infrastructure and skilled manpower such as nurses, technicians and doctors in semi-urban and rural areas as a huge challenge in rolling out the NHPS.