Cabinet approves Modicare, but can the government pull it off?
The ambitious 'Modicare,' touted as the "world's largest government-funded program," has been approved by the Cabinet, paving the way for its implementation. No rollout date has been announced, but reports say it is likely to go live from October. It is expected to benefit over 10cr poor families, providing coverage of up to Rs. 5L per family per year. But how feasible is it?
About Modicare and the benefits to citizens
'Modicare,' under the Ayushman Bharat National Health Protection Mission announced in Budget 2018, is a portable scheme targeting 40% households across India, irrespective of size, age and pre-existing conditions. Beneficiaries will get cashless benefits from any public- or private-empanelled hospital. The goal is to eventually turn it to a universal program covering all citizens. An added benefit will be job creation, the government said.
How the government has planned spending on the program
Though the premium hasn't been officially stated yet, it has been estimated at Rs. 1,200cr per family. Center and states will share expenditure on premium reportedly at 60:40 ratio. Payments for treatments will be on package rates, to be defined by the government, but "states will be able to modify rates within a limited bandwidth." Central funds will be transferred through an escrow account.
India's healthcare expenditure one of the lowest in the world
India spends only 1.4% of its GDP on public health, amongst the lowest in the world. This leads to cataclysmic expenses that push 7% of the population into poverty every year. Moreover, access to healthcare is a major problem: public hospitals are few, under-funded and under-staffed. So Indians have to approach private hospitals that cost a bomb, beginning the cycle of debt.
But will the flagship Modicare actually become reality?
Modicare will cost Rs. 11,000cr. Till February, only Rs. 2,000cr had been allocated. That means a meager Rs. 80,000 per sub-centre, which suffer from poor infrastructure, under-staffing and lack of equipment, leaving them far below public health standards. Incidentally, the NDA had announced a similar scheme in 2016, which never took off. The success (or failure) of Modicare might affect BJP's prospects in 2019.
