PM's new health insurance scheme may cost over Rs 8000 crore

Currently, the poor families are covered under Rashtriya Swasthya Bima Yojana for up to Rs 30,000 expenses

Prime Minister National Health Insurance Scheme, which is under consideration for providing up to Rs 1-lakh health cover to poor families, may bring Rs 8000 crore premium income for insurance companies.

Currently, the poor (below-poverty-line) families are covered under Rashtriya Swasthya Bima Yojana (RSBY) for up to Rs 30,000 expenses. There were 11.8 million hospitalisations under the RSBY scheme till the end of last the financial year. RSBY will be phased out once the PM’s new health scheme is rolled out.

“Health ministry will require at least Rs 4,000 crore to Rs 5,000 crore budgetary support in order to pay the insurance premium,” a health ministry official said. “The centre will be responsible for disbursing 60% of the premium for the scheme, while the states will be responsible for the rest,” he said. This would mean higher contribution from most of the states who currently bear only 25% of the cost for cover under RSBY. The contribution of Northeastern states and Jammu & Kashmir to the premium for coverage under RSBY is even lower at 10%. 

The health ministry is now preparing the guidelines for the scheme. It also plans to start the process to empanel insurance companies and hospitals for the scheme soon. A cabinet note is in the making to lay down all the rules for companies to participate in the scheme, said the official.

The scheme was first announced this year by the prime minister Narendra Modi on the independence day. The number of people covered under health insurance has crossed over 36 crore as per Insurance Regulatory and Development Authority, most of them are under government schemes.