Breaking Down The Ambitious 'Modicare' Health Plan : A Fact File

Read the contours of Modicare, the government's ambitious health insurance scheme for the poor. Here's what we know so far.

Much has been written and spoken about the National Health Protection Scheme (NHPS) dubbed as 'Modicare' ever since Finance Minister Arun Jaitley's speech on February 1st. The NHPS aims to reduce private out of pocket medical spending, which is currently around 60 percent of all healthcare expenses. And while the scheme has been hailed as 'historic' several questions have been raised about how the world's largest healthcare scheme will work. Sensing the apprehension around the scheme, the health ministry and NITI Aayog were quick in responding and held a press conference on Friday.

Below is a list of questions that have been answered based on what the government has said so far and based on publicly available data.

What is the National Health Protection Scheme?

It is a nationwide health insurance scheme that would cover 10 crore poor and vulnerable families by providing an insurance coverage of Rs. 5 lakh per family per year for secondary and tertiary hospitalization. It aims to benefit around 50 crore people.

Who will benefit from the scheme?

10 crore families identified as poor vulnerable in the Socio-Economic Caste Census (SECC) 2011 shall be eligible under the insurance scheme.

Is it a new scheme?

No. National Health Protection Scheme was introduced in union budget 2017 but with a coverage of Rs. 1 lakh per family per year.

However, the scheme was still pending in the cabinet and did not take off. ‘The contours of the scheme are yet to be finalized’, the health ministry had said replying to a Lok Sabha Question dated December 17, 2017.

The centre was already running a health insurance scheme called the Rashtriya Swasthya Bhima Yojana introduced in 2008 which was renamed to Rashtriya Swasthya Suraksha Yojana (RSSY) in 2016-17. In the following budget (2017-18), the National Health Protection scheme was announced with a higher coverage. But it did not materialize and RSBY continued.

Under RSBY, BPL families are provided an annual insurance coverage of Rs. 30,000 and around 3.6 crore families were enrolled under RSBY in 2017-18 (up to September 2017). The government pays the premium of Rs. 500 per family per year under RSBY.

Once NHPS launches RSBY will subsume in NHPS, according to Niti Aayog.

What will be the premium amount and who will pay it?

The estimated premium is between Rs. 1000 – Rs. 1200, according to Alok Kumar, Niti Aayog member. This is to be paid by the government and thus shall be free of cost to the beneficiaries. In case of 100% active enrollment, the annual fund required for premium shall be between Rs 10,000 crore and Rs 12,000 crore.

What is the fund allocated to the scheme?

The union budget 2018 has made available Rs. 2000 crore for NHPS which is currently allocated under the Rashtriya Swasthya Bhima Yojana.

Is this fund enough to reach out to 10 crore families?

This fund is just the initial fund allocated to the scheme as per budget estimate 2018-19. In addition to this, Rs 11,000 crore shall be at the disposal for the scheme from the health and education cess levied along with personal and corporate income tax, according to NITI Aayog. Finance Minister Arun Jaitley proposed 4% health and education cess in 2018-19 as opposed to 3% of education cess in 2017-18.

Moreover, the burden of funding is not on the centre alone. Health expenditure is borne at the ratio of 60:40 by the centre and states. Thus, only 60% of the funding shall come from the centre which is estimated at Rs 6000 crore for the premium amount of Rs 1000 per family, according to Niti Aayog.

How does Niti Aayog plan to roll out NHPS?

JP Nadda, Minister of Health and Family Welfare, and the Niti Aayog reiterated that this scheme shall not be stalled due to financial constraints and that implementation is key.

Everyone listed in SECC survey list are enrolled in the scheme by default. However, they need to be made aware of the scheme.

As health is a state subject, states have to decide whether to roll out this scheme or not. As of now only 14 states have rolled out RSBY and some run their own health insurance schemes. So, it is upon states whether to run their own health insurance schemes or subsume them with NHPS. The health minister pointed out that NHPS shall provide the highest coverage of Rs 5 lakh compared to any of the existing centre / state sponsored health insurance schemes.

If the states choose to uptake NHPS, then again it has a choice to run it as a trust model or insurance company model. If run by the latter, the company that wins the bid will run the scheme in a state. However, the Niti Aayog has recommended the trust mode over the insurance company mode.

When will the scheme be rolled out?

The scheme is to be launched by October 2nd, according to media reports. The centre is yet to discuss the scheme with states, enroll hospitals and finalize health packages.

Does the government assure 100% enrollment?

No. Though the people in SECC list are already enrolled, active enrollment depends on awareness generated and the decision of the states to run it or not.

What are the special features of NHPS?

  • There is no cap on the family size which means that whatever the size, the family will get a coverage of Rs. 5 lakh per year.
  • This is paperless, cashless, Aadhaar linked but patients without Aadhaar will not be denied treatment, Niti Aayog has said.
  • It is envisioned to be a national scheme in which the beneficiaries’ will be able to claim insurance for treatment in hospitals listed under the scheme across the country.
  • A national health agency shall be established to oversee the scheme.

Correction: A previous version of the story incorrectly stated 50,000 crore instead of 50 crore as beneficiaries of the scheme. The error is regretted.

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