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Modicare—Stepping Towards Better Healthcare


This year’s Independence Day was marked by PM Narendra Modi’s address to the nation regarding the launch of the National Health Protection Mission (AB–NHPM), alternatively labelled Modicare, on 25th September 2018. Here’s a compartmentalisation of this plan in order to understand what it proposes.

What is Modicare? A massive undertaking by the government, the Ayushman Bharat healthcare insurance scheme promises 5 lakhs to insure a family for one year. With a 1500% increase from rupees 30,000 under the Rashtriya Swasthya Bima Yojana to 5 lakhs, the NHPM aims to cover 10 crore families near or under the poverty line. Covering secondary and tertiary health care services, it includes packages under cardiology, neurosurgery, and oncology (chemotherapy for 50 types of cancers). Hospital registrations, boarding charges, food for patients, and pre-checkups, as well as post-checkups, are just some of the services covered by the scheme. PM Modi made sure to highlight the plan as a step in the right direction towards better healthcare in the nation during his speech. With more than half of India’s population being forced into poverty as a result of their out-of-pocket expenses relating to health care services, Modicare aims to offer a solution to this socio-economic crisis.

Image Courtesy: Mezong Jamir, for the MIT Post

Who is on board? This health care insurance scheme targets over 50 crore people across the country. Currently, 29 states out of 36 states and union territories have aligned themselves to the plan. Karnataka is one of the states that has agreed to achieve this through the trust mode of the scheme.

What are the different modes of the system? The various states planning to join the healthcare insurance scheme have opted to apply the plan through trusts, insurance companies, or a mixed model.

How is it going to be implemented? The premium of the program is said to be distributed between the central and state governments in a ratio of 60:40, with the exception of Himalayan states where the ratio will be 90:10. Union Territories will be receiving 100% premium from the central government.

What could go wrong? Through its basic policies, the scheme was justifiably well-received by most sections of our society. Yet, as expected of any plan, there are a few deviating paths it may take rather than the one anticipated by the government:

  1. The state governments would be subject to overbearing premiums set by the scheme itself, even with 60% support provided by the central government. The current Rashtriya Swasthya Bima Yojana requires the governments to pay an average of 750 rupees, while the AB–NHPM asks for 1,082 rupees—which still may not be enough to cover the entire family.
  2. The lack of adequate healthcare infrastructure in most states adds to the probable failure in bolstering the plan, based on the states’ current foundation. To paraphrase Rajeev Sadanandan, Additional Chief Secretary for Health with the Government of Kerala (and former head of the Rashtriya Swasthya Bima Yojana), “…the lack of demand for the purpose which directly translates from the poor availability of standard healthcare facilities would impact the scheme’s performance as well.”
  3. The existing insurance system, while operational, has had its own share of fraud over the years. According to the Indian Institute of Insurance, the estimated number of false claims in the industry has been 15% of the total claims, causing the healthcare industry to lose approximately rupees 600 to 800 crores annually. The overloaded public sectors would force demand to be pushed towards private hospitals that are also free to join the insurance plan. As a result, the abatement of the public healthcare infrastructure would be inevitable.
  4. Past failures of current insurance schemes to reduce personal overheads of the insured is evident, as recorded by WHO (World Health Organization) that states, 3.9% of India’s GDP goes towards the health sector out of which health insurance accounts cover for 5-10% of the expenditure while personal payments round off to a total of 82%. Though the statistics show concerning numbers, the government is now planning a scheme of the same blueprint on a much larger scale hoping that demand will bring success to the program.

Despite the concerns of skeptics, who hold numbers that back their reasons to be hesitant, the launch is being widely anticipated by the nation. The number of citizens in need of any insurance plan is over 80% of the population, putting India in the lowest ranks of countries having a developed healthcare sector. Evidently, the seriousness of the problem is transparent to the society that is now welcoming any proposal to better the current situation. As the date of the launch for AB–NHPM comes closer, the nation can only continue to attempt to predict the outcome of this extensive project and hope for the best.

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