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Niti Aayog bites bullet on Modicare, asks healthmin for realistic estimates

Niti Aayog has announced that Modicare would cost Rs. 100-120 billion a year

Sahil Makkar 

NITI Aayog

In a proposal put up before the expenditure finance committee (EFC), the Union Health Ministry and the Niti Aayog have suggested that the total cost of the (NHPS) or would be around Rs 250 billion, including Rs 100 billion that is to be borne by state governments, for 2018-19 and 2019-20.

Niti Aayog, which is said to be brainchild behind the scheme, however, said this cost was based on “assumption”.

“As per the total cost estimates of the scheme placed at Rs 250 billion is based on an assumption of Rs. 650 per family from the Centre and Rs 432 from the states including the administrative cost. This tantamount to a premium of Rs 1082 per family. As per the current practices in the medical insurance field, the rate of premium is in the range of Rs. 5,000 or above for a cover of Rs. 500,000 per family. Therefore, the ministry may prepare a realistic estimate of insurance premium after taking into account the prevalent market rates of premium and taking on board the prospective insurer,” the Niti Aayog said in the EFC proposal dated Feb 13. 

Business Standard has reviewed the note. Currently, many state governments are paying a high premium for an insurance cover up to Rs 300,000. For instance, Rajasthan, which runs Bhamashah health insurance scheme for around 10 million families is paying a premium of around Rs 1,250 per family for an insurance cover of Rs 300,000. The Centre has proposed to provide an insurance cover of Rs 500,000 per family.

An official said the Union health ministry had to move the EFC as the latter's approval is required for all schemes of the Union government where the budgetary allocation is in excess of Rs 5 billion.

Niti Aayog bites bullet on Modicare, asks healthmin for realistic estimates

The EFC, which is chaired by the Secretary (Expenditure), had its first meeting on on Thursday which remained inconclusive and the bureaucrats are expected to meet again next week.

The Niti Aayog and the Union Health Ministry had moved the EFC for the approval detailing how the would be rolled out. It said the government would be setting up a National Health Protection Council (NHPC), National Governance Board (NGB) and National Health Agency (NHA) before  roll-out of the scheme on August 15.

The NHPC, which will provide the policy guidance, would be chaired by the Union Health Minister and co-chaired by the vice-chairman Niti Aayog. Health Ministers of states would be his members and co-chairperson of NGB would act as its member secretary.

NGB, which would be the decision-making body, would be constituted after appointing Member (Health) at Niti Aayog its chairperson and secretary (Health) as its co-chairperson. NGB members include CEO Niti Aayog, Mission director National Health Rural Mission, secretaries of various central ministries, four principal secretaries of the states, two domain experts to be nominated by the chair and co-chair and CEO of National Health Agency (NHA).

The NHA, would be the implementing agency for Modicare, and his CEO would be an officer of the rank of additional secretary or joint secretary. The proposal before the EFC has also demanded an additional joint secretary in the Union Health Ministry.

The proposal estimates that setting up of NHA, infrastructure, IT and another administrative cost would be a one-time cost of around Rs. 3 billion. 

First Published: Sat, February 17 2018. 00:34 IST