ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconFacebook IconIcon FacebookGoogle Plus IconLayer 1InstagramCreated with Sketch.Linkedin IconIcon LinkedinShapeCreated with Sketch.Icon Mail ContactPath LayerIcon MailMenu BurgerIcon Opinion QuotePositive ArrowIcon PrintRSS IconIcon SearchSite TitleTitle ChevronTwitter IconIcon TwitterYoutube Icon
Politics

Modi's health care will 'dramatically change' India, chief vows

States and hospitals expected to embrace project to insure 500m people

"Modicare," as India's new health insurance program is known, will offer over $7,000 worth of free treatment per family annually.    © Miro May/picture-alliance/dpa/AP Images

NEW DELHI -- India is set to start extending health insurance coverage to 100 million low-income households next week, and the head of the ambitious program is confident the move will transform the country's medical care.

The initiative -- popularly known as "Modicare," after Prime Minister Narendra Modi -- will apply to 500 million of the country's population of over 1.25 billion. Back in 2015, a report had noted that 75% of Indians lacked access to health insurance.

"We will start rolling it out on Aug. 15," program chief executive Indu Bhushan said in an interview. Modicare, he said, will "dramatically change" the country's health picture in the coming years.

As of last week, 28 of India's 29 states and seven federally administered territories had signed up for what is officially called the Ayushman Bharat - National Health Protection Mission, or AB-NHPM. Bhushan suggested more regional governments and hospitals would come on board by Aug. 15, which is Independence Day.

Under the system, each family will be eligible for free medical treatment worth up to 500,000 rupees ($7,280) per year. More than 6,500 private hospitals have also started the application process to take part.

States with their own health coverage are likely to align their schemes with Modicare. Bhushan said that while it is not mandatory for states to accept Modicare, most are willing to cooperate. He pointed to West Bengal, a state ruled by the opposition All India Trinamool Congress, which was initially reluctant to join the program but later came around.

Indu Bhushan, chief executive of the Modicare program.

Bhushan stressed that state-run insurance programs offer limited benefits. "None of them are covering up to 500,000 rupees, none of them have national portability [and] none of them have the number of benefit packages that we have [under Modicare]."

At present, the states are putting in their own resources to run their programs. Funding under Modicare, billed as the world's largest government-funded health protection drive, will be split 60-40, with the central government contributing the bigger portion.

On private hospitals' participation in Modicare, Bhushan said the goal is to have 15,000 hospitals on board by Oct. 2, the birthday of Mahatma Gandhi.

The participation of private hospitals, which account for over 70% of health care services in India, is crucial for the success of Modicare. Local media reports have said hospitals are concerned they will be offered low prices to treat patients under Modicare. But Bhushan said the rates "are not fixed" and states have the flexibility to change them.

He further added the government wants to give hospitals "fair rates" so that they are able to cover their costs. "Our objective is to benefit the ultimate beneficiary, not the hospitals or insurance companies."

Modi, who has said the program will bring about a "paradigm shift" in India's health sector, reviewed the preparations last Saturday and intends to unveil it himself. India is to hold a general election by mid-2019, and the insurance scheme is expected to be a key part of his Bharatiya Janata Party's campaign for a second five-year term in power.

Most of the states opting for Modicare have preferred a trust-based model, where reimbursement of claims will be done by a government trust instead of insurance companies. This, Bhushan said, means "the role of insurers is not that prominent in this scheme anymore."

Get unique insights on Asia, the most dynamic market in the world.

Offer ends September 30th

You have {{numberReadArticles}} FREE ARTICLE{{numberReadArticles-plural}} left this month

Subscribe to get unlimited access to all articles.

Get unlimited access
NAR site on phone, device, tablet

{{sentenceStarter}} {{numberReadArticles}} free article{{numberReadArticles-plural}} this month

Stay ahead with our exclusives on Asia; the most dynamic market in the world.

Benefit from in-depth journalism from trusted experts within Asia itself.

Try 3 months for $9

Offer ends September 30th

Your trial period has expired

You need a subscription to...

See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

See all offers
NAR on print phone, device, and tablet media