Prime Minister Narendra Modi announced on August 15, Independence Day from the Red Fort, that the the central government’s ambitious mega health insurance plan Pradhan Mantri Jan Arogya Abhiyan under Ayushman Bharat National Health Protection Mission (AB-NHPM), or ModiCare would be launched on September 25, the scheme is marred with a host of problems of poor infrastructure and the adoption of model for its implementation.
The countdown has now begun in earnest for the national launch of the scheme, yet, the central government is busy roping in non-life insurance companies and hospitals for the launch. Very low pricing has kept the large insurers away from participating in the scheme,
It was in the Budget for 2018-19 that the government had announced the scheme, with centrally-sponsored component anchored by the Ministry of Health and Family Welfare. The scheme promises the benefit cover of ₹5 lakh per family per year. The target beneficiaries of the proposed scheme will be more than 10 crore families belonging to poor and vulnerable population, based on SECC database. The scheme, on its launch, will subsume the on-going centrally sponsored schemes±Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme (SCHIS). The beneficiaries covered under the scheme will be allowed to take cashless benefits from any public or private empanelled hospital in the country.
While the beneficiaries have been identified and the IT infrastructure has been put in place for the scheme, the involvement of hospitals—both public and private—and that of insurers was still to be finalised, Indu Bhushan, Chief Executive Officer of the project had said last month.
Adding to its woes, lack of upgraded health facilities, dated equipment, and skilled staff in rural areas, continue to haunt the successful launch of the scheme.
According to a Crisil report, improvement in quality of government infrastructure and leveraging private sector at right price to be crucial tasks for the scheme.
Though the scale of coverage plays a crucial role in deciding the overall per capita premium, the NHPS target rate of Rs 1,082 per family for a medical cover of up to Rs 5 lakh (which translates into a premium of Rs 216 per capita) looks very low, especially considering the involvement of private insurance companies having profit motive
While there are 23,582 government hospitals having 7,10,761 beds in India, the report says, tertiary government healthcare facilities such as AIIMS-like institutions are limited. AIIMS Delhi has more than 2,000 beds (including newly constructed emergency wards and trauma centre) and six newly-formed AIIMS-like institutes in Bhopal, Bhubaneswar, Jodhpur, Patna, Raipur and Rishikesh have operational capacity of 2,744 beds. However, as per Ministry of Health And Family Welfare, almost 60% faculty posts and 80% non-faculty posts in these six AIIMS-like institutes remained vacant as of February this year.
More than 20 states have signed the memorandum of understanding for Ayushman Bharat. Though several stakeholders/ associations had recommended a trust-based model of implementation at country level, the central government has left this choice with individual states.
Though the scale of coverage plays a crucial role in deciding the overall per capita premium, the NHPS target rate of ₹1,082 per family for a medical cover of up to ₹5 lakh (which translates into a premium of ₹216 per capita) looks very low, especially considering the involvement of private insurance companies having profit motive. In addition, selection of a trust-based model by a few major states (in terms of population) may lower the scale of calculation for insurance companies, the Crisil report said.
The scheme’s recommendation on refunding excess premium if claim ratio is below 85% is another concern for insurance companies.
States that do not have a BJP government at the helm are reluctant to implement the scheme and rather adamant to have their own insurance schemes in place. For example, the Odisha government has made it clear that it would not implement the scheme in the state and launched its own similar scheme on August 15.
"There is no need to join the central government's Ayushman Bharat programme after launching state's own health assurance scheme," Health & Family Welfare Minister Pratap Jena had said last month.
Odisha Chief Minister Naveen Patnaik on Wednesday announced the Biju Swasthya Kalyan Yojana universal health scheme that will benefit 70 lakh families in the state. Beneficiaries of BSKY will get medical assistance of ₹5 lakh and women will get an additional ₹2 lakh, said Patnaik in Bhubaneswar.
Similarly, the scheme is likely to be launched in Andhra Pradesh under the banner ‘Ayushman Bharat-NTR Vaidya Seva’—a combination of the Centre’s AB-NHPM’ brand and the label given to the state’s existing health insurance plan.
States that do not have a BJP government at the helm are reluctant to implement the scheme and rather adamant to have their own insurance schemes in place. For example, the Odisha government has made it clear that it would not implement the scheme in the state and launched its own similar scheme on August 15
Pricing is another grey area in the scheme. As per Modi government’s own calculation, the annual premium to be paid by each beneficiary family comes to ₹1,082. And the insurers were batting for making it to ₹2,500 so as to make the scheme viable for them.
However, when the tender was opened for the state of Nagaland, which was the first state to go for bidding for NHPM, the stand-alone private sector health insurer, Apollo Munich had bid for merely ₹444. Now the insurers are worried if it is going to be the case, then they will have no way other than opting out of the scheme in the remaining parts of the country. Interestingly, both the state-owned largest non-life insurer (New India Assurance) and the largest private sector general insurer, ICICI Lombard, didn’t participate in the bidding for NHPM in Nagaland.
Talking to National Herald, Bhargav Dasgupta said that “Low pricing for the scheme continues to be a worry for us and we will participate only when we get the right pricing.”
As many as 23 states have opted for the trust model for the scheme, under which the claims would be settled from a corpus to be created from contributions from the central and state governments. Hence it will create another problem in establishing synergy between the trust model and the insurance model going forward, the experts believe.
Now, the question arises that will the insurers be able to settle huge claims which will start pouring in as the government has already washed off its hands in linen by saying that this has to be looked after by the insurers themselves in the absence of proper infrastructure in place.
Secondly, how will the government be able to manage frauds which may take place in the name of the scheme.