Modicare Is Here, And This Is Why It’s Needed

Pro-market governments are typically identified with the interests of the rich capitalists and business owners. A perception has been created worldwide that right-leaning governments only pander to the top 10 per cent of the population while it is the left which concerns itself with “soft” sectors such as health, education and farmer development. In this context, the launch of the world’s biggest health insurance programme by the Narendra Modi government goes against the vein of this compartmentalisation.

It is for the first time in the economic history of independent India that health has emerged as the biggest headline of the budget announcement. For, I do not remember when was the last time that finance gurus on the day of the budget announcement were talking about a subject so seemingly “left”.

Finance Minister Arun Jaitley today (1 February) announced the launch of a new flagship National Health Protection Scheme, which aims to cover nearly 50 crore beneficiaries. This entails a whopping Rs 5 lakh per family per year to cover secondary and tertiary hospitalisation charges.

Let us analyse how this will apply to the Indian context.

Despite an over-reliance on the socialist model of healthcare spending, India offers one of the poorest levels of financial risk protection to its health-seeking citizens. Nearly 67 per cent of what an average Indian spends on healthcare comes out of their own pocket, and less than 30 per cent of their expenses are covered by either government services or insurance cover. If we translate these medical expenses nationwide, every year, nearly six crore Indian households fall below the poverty line only because they are not able to pay for their medical expenses. And a majority of the affected populations are the Dalits, tribals, and those from rural and poor households.

The missing link in this picture is the absence of a comprehensive health insurance model in India. Nearly 86 per cent of rural Indians and 82 per cent of the urban populace are still not covered under any scheme of health expenditure support or insurance system. Though attempts like the Rashtriya Swasthya Bima Yojana were made previously, a systematic effort to provide social security and health insurance cover were missing. It is in this light that the government’s commitment to launch the world’s largest health insurance scheme sets India on the path of progressive universal health insurance.

This is proposed to be complimented by the setting up of over 1.5 lakh health and wellness centres, which will “bring healthcare closer to home”. Keeping in line with the data that nearly 70 per cent of the out-of-pocket expenses in the Indian healthcare industry are on drugs and diagnostics, these centres will primarily focus on the same. Additionally, 24 new government medical colleges and hospitals will be set up by upgrading district hospitals in the country, to ensure that there is one medical college for three parliamentary constituencies.

The right to lead a healthy life is increasingly being recognised the world over as one of the central pillars of human rights and social justice. India’s commitment towards universal health insurance, therefore, seems like the right recipe to balance the market-led growth of the economy with health insurance and financial risk protection.