In February’s budget statement given by Finance Minister Arun Jaitley, the Indian government announced plans to implement a health insurance scheme which would grant coverage to India’s poorest citizens. In the latest of Prime Minister Narendra Modi’s ambitious policies, the Ayushman Bharat - National Health Protection Scheme, dubbed colloquially as ‘Modicare’ – aims to provide India’s poorest 100 million families with insurance coverage of $7,300 per year, per family, increasing insurance coverage by 1500 per cent compared with current levels; if successful, the government hopes to expand ‘Modicare’ to provide insurance for 500 million families. Under the scheme, it is estimated that the proportion of India’s 1.3 billion-strong population with health insurance will increase to four in ten (approx. 520 million). Secondary and tertiary care services will be covered, and a planned 150,000 health and wellness centers will be established to provide for primary care needs. Set to be rolled out on August 15th following Prime Minister Modi’s speech from the Red Fort on Independence Day, ‘Modicare’ will be the largest national health insurance scheme in the world.
This new scheme comes amidst a growing concern for the state of healthcare provision and insurance coverage in India, with the population plagued by both communicable and non-communicable diseases. Despite the demand for health care services to meet this dual burden, and the guarantee of free treatment for all enshrined in the Indian constitution, just 1% of GDP is spent towards healthcare, the lowest amongst all BRICS nations. In a recent report from The Lancet, India ranked 145th out of 195 countries in terms of accessibility and quality of healthcare, coming in behind neighboring countries such as China, Bangladesh, Sri Lanka and Bhutan. In fact, due to the insufficient availability or affordability of health insurance, over 80% of Indians incur out-of-pocket expenditure on health care, often seeking expensive emergency care at tertiary health facilities, rather than maintaining regular visits to a primary care provider. As a result, out-of-pocket healthcare expenditures are reported to have driven 55 million Indians into poverty in 2017; it is, therefore, easy to see why many are hailing ‘Modicare’ as arriving not a moment too soon.
But will ‘Modicare’ be able to fix the myriad issues which face India’s healthcare system? Even if successful, health insurance alone will not be able to account for the mass shortage of public doctors, with a mere 1 million registered doctors and 15,000 state hospitals reported by the government as serving the needs of the entire population. Due to what economist Amartya Sen has described as “the amazing neglect of primary healthcare compared with health interventions needed at later stages [and the] hasty and premature reliance on private health care, which goes hand in hand with neglect of public health care,” it is unclear whether the additional millions of Indians eligible for ‘Modicare’ will be able to receive timely access to public health care without massively increasing investment in the health systems infrastructure across the country. Furthermore, given widespread reliance on private health practitioners in areas without accessible public health facilities, it is imperative for ‘Modicare’ to work in partnership with the private sector, not only to expand insurance coverage, but also to lower the often-exorbitant and exploitative cost of doctor’s visits, medication and treatment which plunge families into poverty.
It is also possible that the scale and reach of ‘Modicare’ has been overstated: by development economist Jean Dreze‘s calculation, the 2,000 crore budget for the scheme amounts to less than 20 rupees per person, when broken down, despite Arun Jaitley’s assurance that, “if more [funding] is required, then we definitely will give that from the budget.” According to Jaitley, the scheme will be financed by a recently re-imposed capital gains tax and a 1 percent increase in education cess on income tax (a tax used to fund government-sponsored programs). However, Dreze is not the only party skeptical of ‘Modicare’: several states, particularly those with upcoming state elections such as Rajasthan and Odisha (which already have state-level health insurance schemes in place) have expressed hesitation about the implementation of ‘Modicare’, given the inability to predict voter reactions to the scheme. Anti-BJP states are also reluctant to assist the Modi government in a potential policy win; meanwhile, states with underdeveloped health systems infrastructure are concerned about the practical logistics of offering health insurance coverage to populations without building sufficient facilities to treat them.
It is thus clear that it will take more than an increase in the share of the population with health insurance coverage to improve health outcomes in India. Given India’s complex and numerous logistical and operational challenges, Modicare must form but one scheme amidst a multi-pronged approach to build the capacity of health systems infrastructure, and increase the accessibility and affordability of treatment for both the rural and urban poor alike, whilst maintaining quality of care. But as long as it is a step in the right direction, ‘Modicare,’ and whatever challenges it may bring in seeking to expand universal health coverage, is a pill worth swallowing.