Budget 2018: Jaitley says Modicare roll-out in FY19, more funds if needed

Finance Minister Arun Jaitley on Friday said the world's biggest health cover plan announced in Budget 2018 will be cashless and not a reimbursement scheme, and promised more funds if required depending on the rollout later next financial year.  

The National Health Protection Scheme (NHPS), touted as ModiCare, has been envisaged to provide medical cover of up to Rs 500,000 (Rs 5 lakh) to over 100 million (10 crore) poor and vulnerable families, constituting 40 per cent of total population. 

"It takes care of hospitalisation, the secondary and tertiary care. Obviously, it will involve various state hospitals and selected private hospitals. It can be on trust model, it can be on insurance model. It's not on reimbursement model because too many complaints come on the reimbursement model," he said here. 

The model is now being worked out between NITI Aayog and Health Ministry, he said, adding that the date of implementation would be next financial year and sometime in the course of the year it will be worked out.

Assuming the model to be insurance led, the premium shrinks with the increase in the number of policyholders, he said at an event organised by Open magazine.

The scheme, although appreciated by experts, also raises apprehension about its implementation and the initial corpus of just Rs 20 billion (Rs 2,000 crore).

Assuring that the scheme will be entirely state-funded, Jaitley said initial funds of Rs 20 billion (Rs 2,000 crore) have been allocated and whatever funds required, as the scheme rolls over, would be made available. 

"In the coming year, I see a more comfortable situation as far as revenues are concerned because the graphs as far as direct tax is concerned would move very fast," he said.

Following demonetisation and implementation of Goods and Services Tax, the number of direct tax assesses have gone up ... once anti-evasion measures (are in place), I do expect a little bump up in the GST collection also. I don't see revenue going to be a major challenge in that," he said. 

On Thursday, Jaitley in the Budget speech said, "We are all aware that lakhs of families in our country have to borrow or sell assets to receive indoor treatment in hospitals. Government is seriously concerned about such impoverishment of poor and vulnerable families. Present RSBY provide annual coverage of only Rs 30,000 to poor families."

Several state governments have also implemented supplemented health protection schemes providing varying coverage, he had said in the Lok Sabha.

The finance minister also advocated that the central and the state government can pool in resources for health care to achieve efficiency.

He also emphasised on having better hospitals in rural areas even though Tier-I and Tier-II cities have good hospitals.

Setting up of hospitals in various districts is a state subject under the federal structure, he added.