The 2018 Budget contains the Modi government’s biggest commitment to healthcare to date with the announcement of the National Health Protection Scheme (NHPS).
The NHPS – dubbed ‘NaMoCare’ or ‘Modicare’ by the press – is a wholesale effort to extend health coverage to 10 crore (100 million) economically vulnerable households. It is being called ‘the world’s biggest government-funded healthcare scheme.’
The budget also contains tax incentives to encourage more middle-class families to take out private health insurance and to do so for longer terms.
The NHPS looks to target around 41 percent of Indians. This translates to roughly 500 million people. Households will be covered for up to Rs 5 lakh (US$7,795) worth of services in government and private sector hospitals, including primary, secondary and tertiary care. The scheme is to integrate Aadhaar and will be cashless. The NHPS was at least two years in the making, Rollout is expected by October 2.
Money for Modicare
The scheme has attracted scrutiny over its financing. The government expects the scheme to cost Rs 10,000 crore which it says will be covered by a ‘health and education’ cess (hypothecated tax) of four percent on personal income and corporation tax. This will replace the existing three percent education cess.
The exact formula of the NHPS has yet to be worked out in full, reports suggest. Part of the cost will be borne by the states. The Centre expects to cover Rs 4,000 crore of the total in the first year according to ‘preliminary estimates.’ This depends, however, on which model is adopted for the programme.
A trust-based model is most likely to be adopted. Proponents point to its use in existing health coverage schemes within India such as the Arogyarsi programme in Andhra Pradesh and the Yeshasvini Cooperative Farmers Healthcare Scheme in Karnataka.
If a trust-based model is utilised, funds will be allocated to trusts by the Centre and state governments. These trusts will then ‘act as the main gatekeeper for processing and settling claims of hospitals that treat the scheme’s beneficiaries’, according to Money Control.
Some are questioning the Centre’s estimates of how much the scheme will cost. An anonymous official says the scheme will likely necessitate Rs 110 billion (US$1.7 billion) in funding in the first year alone. One financial services analyst calls the per household allocation of Rs 1,200 ‘grossly insufficient.’ CNN reports that ‘if the program is fully taken up, it would cost close to $780 billion.’
Many regard the NHPS with cynicism – both over its prospects and its rationale. Some critics point to the failings of the Rashtriya Swasthya Bima Yojana (RSBY, or National Health Insurance Programme).
The RSBY was introduced with a similar goal in mind – to insure poor families for health services. However, a study published last year said a combination of ‘low enrolment, inadequate insurance cover and the lack of coverage for outpatient costs’ meant the RSBY failed to bring down out-of-pocket expenditure among those it targeted.
Such expenditure in India continues to be among the highest in the world. It for almost two thirds of healthcare spending in India. The poor are particularly liable to bear the brunt.
Past inadequacies probably account for some of the scepticism surrounding the NHPS. This is not just limited to Opposition politicians, who are calling the NHPS ‘a big jumla.’ A Business Standard poll found 68 percent of respondents on Facebook and 57 percent of respondents on Twitter did not think the scheme would succeed.
Scroll.in, a reliably anti-government outlet, calls the scheme ‘a disappointment.’ They deemed it a ‘gimmick’ to help Modi’s BJP win next year’s general election. It notes the Budget does not contain provisions to strengthen India’s healthcare sector: ‘The increase in budgetary outlay for the health sector is trivial, and in real terms probably stagnant.’
Scroll.in further notes that some existing health cover schemes under the Modi government have yet to be operational. Meanwhile, inherited schemes – such as the National Health Mission – have had their budgets cut.
An obstacle to implementing the NHPS is that India’s healthcare system suffers severe shortages of facilities, resources and personnel.
Dr K. Srinath Reddy, president of the Public Health Foundation of India (PHFI), writes “If primary health services are not strong enough to reduce the need for advanced care and act as efficient gatekeepers, there is great danger of an overloaded NHPS disproportionately draining resources from the health budget.”
More doctors, more nurses and more hospital beds are needed, particularly in rural areas. Despite being home to seventy percent of India’s population, rural communities have just three percent of the country’s doctors. As a whole, India has one doctor for every 10,189 people; one hospital bed for every 2,046 people; and one government hospital for every 90,343 people.
After almost four years in office, the Modi government has made progress on key health indicators. However, crippling inadequacies remain. They do so at considerable expense to patients, both in terms of their wellbeing and their wallets.
Committing to ensuring poor Indians can access the care they need is indisputably a noble goal. If the world’s largest health insurance programme is to succeed, however the capital and resources must be behind it.