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Can We Really Ensure Health Insurance for All?

Aug 07, 2018 | 2 years ago | Read Time: 4 minutes | By iKnowledge Team
Health Insurance

Credit: Pixabay

At the Union Budget announcement in February, Finance Minister Arun Jaitley announced the plans for a National Health Protection Scheme (NHPS), “This will be the world’s largest government health programme,” he said. Jaitley added the scheme will be a step towards “New India 2022” and ensure “universal healthcare.” The program finally approved by the Cabinet in March was launched under the Ayushman Bharat National Health Protection Mission also dubbed Modicare.

What does the programme entail?

The program has three main initiatives that aimed to provide overall universal healthcare for Indians. The NHPS promises to provide insurance coverage of Rs. 5 lakhs per family, thus, making the large claim of providing health insurance for all. Additionally, the government also announced an initiative to ensure the establishment of new government medical colleges as well as hospitals, along with upgrades to current district hospitals.  The third initiative under the programme promised the setup of 1,50,000 health and wellness centres across India.

According to estimates by the Niti Aayog, the NHPS will cost around Rs. 5000-6000 crore at a premium of about Rs. 1000-1200 per family in the country (with the assumption of 50% coverage in the first year.) The costs for the same will be shared by the Centre and state, with the Centre accountable for around 60% of the scheme, which would be around Rs. 3000 crore. “Modicare” aims to target about 500 million individuals from households that are “financially vulnerable” which will account for about 41% of the Indian demographic.

Under the scheme, 20% of Indians will be able to claim secondary and tertiary care in both government and private hospitals, given it is under the insurance cap allocated per family. Secondary healthcare is defined as services provided by skilled medical professionals, or hospital stays for serious illnesses, whereas, tertiary care is for people admitted into hospitals for longer time periods, and require special doctors or are terminally ill.  The scheme also calls for the establishment of a national health agency that will oversee the implementation of the project on the state level.

Dire need for the NHPS in India

Shortly after the NHPS was announced, Prime Minister Narendra Modi, tweeted, “A constant worry in poor people’s lives is how to treat illness. Will free them from this big worry.” The NHPS is undoubtedly a step in the right direction as it acknowledges the need for better and improved universal healthcare in the country. Expenditure on healthcare is a major cause of poverty in the country and often government leaders and experts claim that the lack of a healthy workforce is what prevents the country from realising the actual potential of its “demographic dividend.”

According to World Bank estimates, India’s health expenditure per capita is about $267 (2014), which is much lower than the world average which is around $1,271, therefore, the NHPS, which aims to provide health insurance for all, is undoubtedly the need of the hour. However, the NHPS also an incredibly ambitious project, the success of which will depend on a wide variety of factors, including the implementation of the programme and the success of other initiatives launched along with the NHPS.

health care expenditure

What are the challenges?

One of the most profound challenges the NHPS faces is that its success hinges on the implementation and success of the other initiatives under the Ayushmaan Bharat programme, as these will be critical to increasing the access to healthcare and increase provision across the country. The NHPS will raise coverage from the current Rashtriya Swasthya Bima Yojana (RSBY) which provides for about Rs. 30,000 insurance coverage per family to Rs. 5 lakhs, which is a 1500% increase. To implement such a huge transition everything has to be flawless. Setting up of 1,50,000 health and wellness centres along with increasing the number of doctors available, by increasing the number of medical colleges will be key in ensuring health care and access to all.

According to data provided by the Medical Council of India, India has one doctor for every 1,668 people, while nearly eight lakh doctors across the country. The numbers change drastically for rural areas, where doctors are harder to find. Increasing the number of doctors, by ensuring more Government Medical Colleges and Hospitals are opened is rudimentary to ensure the NHPS will be successful. As of now, there are only 479 medical colleges for 543 parliamentary constituencies, which have a very uneven spatial distribution.

One of the main criticisms of the NHPS program is that it is not a new initiative. During the 2016 Budget, a similar programme aiming to provide health coverage up to Rs. 1 lakh per family has still not implemented by the government. Given the track record, can we really trust the government to take active steps for the implementation of the NHPS?

While the NHPS is an ambitious and certainly very beneficial scheme for India, it is also a very ambitious project that requires precise and skilled implementation, along with efficient integration with other initiatives. Merely, launching the NHPS without ensuring the other healthcare provisions in the country are stable and improved will mean the program will fail to be effective. The NHPS certainly has the capability of making the ultimate dream of providing health insurance for all come true, however, the dream hinges on countless other factors, which will require seamless implementation and integration into the current healthcare system.

You can get tax breaks if you have a life insurance policy as well, provided you have add-ons like medical insurance and critical illness riders.

Advt. no.: IA/Jul 2018/4256




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