Modi sham health insurance scheme

Not Health Insurance, India Needs Robust Public Health System


The Union Budget 2018-19 has one major big-ticket gimmick that is trumpeted by the Modi regime as a significant programme – a health insurance scheme for 100 million families of the country, which includes 500 million people, with an insurance cover of ₹500,000 per household.

This is, of course, the largest health insurance scheme run by any government in the world. Though named as National Health Protection Scheme, the BJP and the Indian bureaucracy are jointly calling it “Modi Care”, using an Indianised nomenclature pattern that copies the former American President Obama’s health insurance programme – Obama Care.

However, as there is already a business entity named Modicare operating in India since years, it’s not known whether this programme will be still called Modi Care or simply NaMo Care in the unofficial bureaucratic and political parlance. Irrespective of what it’s christened as the programme is now highlighted by the corporate media as a game changer. With our narcissist prime minister’s personal branding added to the scheme, the programme will be used to garner votes on the name of development in 2019.

How will this Modi Care or NaMo Care help the poor people of India in meeting the healthcare challenges?

There is absolutely no clarity on the above question, as the National Health Protection Scheme is designed by copying similar programmes of Kerala and Tamil Nadu governments and it has a lot of loopholes within. For example, the CEO of the Niti Ayog, Amitabh Kant, told the NDTV during a panel discussion over Union Budget 2018-19, that the state governments will bear 40 per cent of the NaMo Care cost, while the central government will bear 60 per cent of the cost.

According to Mr Kant, the premium of the insurance programme will be around ₹1,100 per family per annum and can be broken down to ₹220 per individual. However, the allocation of mere ₹2,000 crore for the programme by Arun Jaitley increased confusion over the official stand of the government on this health insurance scheme.

Overall the insurance scheme looks very egalitarian if seen using the tinted glass of the corporate media, the bureaucrats, the big bankers and financial experts. However, when reviewed carefully, we will find that it’s a scheme that will do little or almost no good to the people in need of good healthcare, i.e. the broad ranks of the poor and toiled masses.

Instead of them, this health insurance programme will help the big insurance companies, public and private general insurance companies, to reap an immense profit. The same goes for the private healthcare companies, hospitals and wellness centres that would reap the actual benefits of such a government-funded health insurance scheme.

If we delve a little deeper into the health insurance programme announced by the Modi government, we will be able to find out the hollowness of this scheme of the government that’s covered up with a shimmering shell.

The old wine in a new bottle

Arun Jaitley didn’t announce this health insurance scheme for the first time now. The National Health Protection Scheme was first declared in Union Budget of 2016-17. Before this, the Ministry of Labour and Employment of the Congress-led UPA I government launched a scheme known as the Rashtriya Swasthya Bima Yojana (RSBY) in 2008. The RSBY was initiated to provide health insurance coverage to poor households to save their out-of-the-pocket expenses on healthcare.

By 2016, 41 million families, which include around 150 million individuals, out of the targeted 65 million families, came under the coverage of the RSBY. The RSBY scheme is operating in 520 out of 625 districts of India. This scheme came to limelight during the reign of Narendra Modi, when Arun Jaitley promised to increase the health insurance coverage to ₹100,000 per family in the Union Budget 2016-17.

However, despite this promise, the initial roll-over in these two years haven’t reached any inspiring tally and the insurance coverage hovers around ₹30,000 per family. To cover this project, the finance minister allocated ₹1,500 crore in 2016-17. The government could only spend ₹500 crore on the programme and therefore, the allocation was reduced for this programme last year.

Now by upgrading the RSBY programme to reach 100 million families with ₹500,000 cover, the Modi government has allocated only ₹2,000 crore for it to start the programme. This is actually a mere ₹500 crore increase from the RSBY allocation two years back and in the present circumstances, it’s unlikely to provide quality health insurance coverage to the targeted families.

The health insurance gimmick

The Modi Care or NaMo Care programme is a health insurance scheme and in health insurance, the money paid as premium by the insured person is placed in a pool where the insurer (one who sells the insurance cover) keeps the total amount collected as premium from all of its customers.

However, there are different pools for different age groups and location, as health risk and treatment costs vary according to age and location. For example, an 80-year-old living in Delhi will be prone to greater health risks than a 24-year-old living in the outskirts of Cherapunji. The premium of health insurance policies, therefore, differ according to age and location, as healthcare cost also varies according to age and location.

Once insurance cover is provided, the insured can claim insurance benefits from the insurer for covering the expenses of any treatment for which the insurer gives coverage. There are many diseases and treatments that the insurers generally do not cover. They pay the insured from the pool of their respective gender and area-group. The lesser the health risk, the greater is the scope of a pool remaining unutilised and thus the money from it goes as the profit of the insurance service provider to the book of accounts.

Now, as the Modi government is finalising the insurance programme and will share it with vendors for tender, the government will actually put money out of public exchequer and give ₹1,100 x 10 crore (100 million) = ₹11,000 crore (₹110 billion) to the insurance vendors to earn profit from. The low amount of claim settlement will leave the poor at the same stage they have been for years now.

(Calculation is done on the basis of Amitabh Kant’s estimation of ₹1,100 per family premium)

There is also an issue of allocation over this programme at present, as the cat isn’t fully out of the bag yet. The states aren’t told to contribute to this scheme, which is related to health – a state subject. The total allocation for the National Health Protection Scheme in the Union Budget 2018-19 is only ₹2,000 crore. The roll-out will take another six months, according to Amitabh Kant’s estimation, and it can be operational only from the beginning of the next financial year, in case the government can finalise a vendor capable of delivering such a mammoth coverage.

By this time, the states will be asked to cough up money for the implementation of this programme. If Amitabh Kant’s estimation is correct, then to meet the target gap of ₹11,000 crore, the government will need an extra ₹9,000 crore and where this amount will come from isn’t still clear.

There will be an additional cess on transactions under the head of “Health Cess”, which will be on top of the existing Education Cess. This will mean the government will try to fund the ill-thought programme by directly taxing the people and the tax collection will determine the future of this campaign.

At present, when the states aren’t told about their contribution to make the programme successful, the total premium breakup for the National Health Protection Scheme comes to ₹40 per head and it will not be enough to create a working pool to cover ₹100,000 coverage a year per head, considering that a family has five members. This will seriously affect the insurance service for the old age people, as the low amount will not add up enough for their frequent healthcare cost.

The Modi government didn’t clarify whether this National Health Protection Scheme, a new avatar of the RSBY, will be a cashless programme or a cost transfer programme during the budget speech. A cashless programme will save the insured the hassle of arranging the funds at the beginning and then running pillar to post in order to get their due claim from the insurer. Also, it’s not clear that the government will keep on covering only hospitalisation cost or outdoor treatment, medicine and medical test and procedure costs as well under this programme.

Health insurance vs healthcare

What is that the people of a big country like India need? A health insurance policy or a better health care regime? The past data of India and the world have shown that the health of the people tend to be better if they get access to universal and preventive public healthcare system than mere health insurance, which only helps them to pay for the treatment and doesn’t prevents them from falling sick.

Throughout the world, the WHO has differentiated healthcare coverage into two broad categories; the first one deals with those countries where the universal healthcare issue is addressed by providing the best services to the people, the second one deals with those countries where healthcare is covered under financial protection and not through universal free healthcare service. India does quite well on the financial protection list, however, its position is very weak in terms of providing free and universal preventive healthcare service.

According to the survey by the NSSO, the out-of-pocket healthcare expenditure in India throws 63 million people into abject poverty every year. The health insurance plans, especially under the government schemes that have been in the market for some time, like the RSBY, provide coverage for only hospitalisation costs, while NSSO survey shows that 63 per cent of the medical expenses are incurred in the outdoor department and clinics that aren’t covered under health insurance.

A pro-active and preventive healthcare system will allow the people to remain aloof from diseases and live a qualitatively better life. Spending in building up a better healthcare infrastructure, attaching it with the overall goal of providing better environment, good quality water and a pollution-free locality to the people must be the onus of the government and it cannot be allowed to shrug it off by bringing in insurance schemes, which will benefit the big insurance companies (in which the big private healthcare companies have huge stake) as they will earn immense profit at the cost of the people’s agony.

While health insurance pays for the healthcare costs, a good preventive healthcare system would ensure that the population remains healthy and can contribute more to the development of the nation and its economy. A robust public health system would make insurance redundant, as the universal healthcare system would ensure that people get end-to-end treatment for all types of diseases at no cost. The preventive healthcare will ensure a healthy population and will save overall national expenditure on treatments, medicines and surgeries.

Improving the ailing public health sector

If it really had anything close to a goodwill, the Modi government could have improved the ailing state of public healthcare in India by increasing the number of medical colleges that can provide quality medical education and produce qualitatively better and quantitatively more doctors and trained paramedical staffs for India, who could be compelled to work in the rural areas, in the primary health centres and to visit the people to ensure they fight diseases with a preventive approach rather than a curative one.

More doctors are reluctant to go to the villages or small towns to treat patients as the neo-liberal economic agenda has deprived a large-section of the doctors of their professional commitment to serve the people. The parents want their wards to become doctors so that they can earn huge money. This greed fuelled by the neo-liberal economic reign is turning the medical profession into a more profit-driven profession than a noble service-driven one. Capitalism worships money, the doctors can’t remain aloof from the seduction of the bait of wealth and luxury for long in this situation.

The only way to purge this filth that has made its room in all spheres of the medical profession is by detaching all aspects of the medical profession from profit. A goal, quite impossible to realise, unless the existing economic foundation is uprooted. However, as an alternative, if the government could have made it compulsory for the doctors to work in a government-run healthcare clinic, for one or two years, to validate an MBBS degree, then it would have pushed a large number of doctors to the villages and clinics in urban areas.

This would have improved the health condition in rural India, where it’s in shambles at the moment and its rickety condition is pushing more people to either death or to abject poverty due to the exploitation they are subjected to at private hospitals.

More doctors, paramedics, manpower, equipment and better infrastructure for healthcare centres, hospitals, etc. run by the government will result into a better healthcare service for the people at the grassroots and their protection from all types of chronic diseases, viruses and ailments. But within the present system, where the corporations decide every action of the government, no political party will be able to bring any real transformation in the public health system, unless an anti-capitalist political bloc wins power.

The revised budget estimate of Department of Health and Family Welfare for the financial year 2017-18 stands now at ₹51,550.85 crore, however, in the Union Budget 2018-19, the Modi government has allocated ₹52,800 crore for the same. A mere 2.5 per cent increase from the previous year. This is in the year when the government is claiming that health is their prime focus! Only ₹1,200 crore is allocated to build up 150,000 health and wellness centres throughout India, which means only ₹80,000 is allocated for each centre. This is grandiose!  

More than 23 per cent of Indian primary healthcare centres run without electricity. Nearly 70 per cent of them operates without a qualified full-time MBBS doctor, clean water isn’t available in 20 per cent of them. This ailing state of the public health forces a large number of people towards private hospitals for treatment, even at the cost of being financially ripped off by the greedy monsters who run the private healthcare industry.

While the government-run hospitals choke due to the lack of infrastructure, doctors and medical equipment to treat the huge rush of patients, the private hospitals make a kill by exploiting the situation. With every passing day, the condition of the public health system of India, especially in the BJP-ruled states, is deteriorating and getting out of control.

It’s time that the people’s movement for health force the government to relook into the importance of the public health system and discard the “minimum governance agenda” pursued by Narendra Modi.

Public health or private healthcare – which one to benefit the majority of the Indian people?

Since the last two decades, with the government of India shedding its responsibility of providing free, universal and preventive healthcare and private hospitals owned by big foreign and domestic corporations making a kill in the market, a debate is on over – which way should India take to provide healthcare to the people? Is the public healthcare viable or the market should be allowed to play and operate the healthcare industry like everything else?

The answer to these questions is a set of questions – which one will benefit the majority of the Indian people, i.e. the poor people, the working class, the peasants and the toiled masses? Can corporate bodies be allowed to earn a profit by fiddling with the lives of the people? Can someone allow big corporations play with their health or that of their near ones?

The big corporate-controlled private healthcare industry has grown rapidly in the last two decades and with the advent of lifestyle diseases, deterioration of the environment and with rising pollution, these companies are now doing great business. Their business is good only when the people are sick and thus, these organisations and their pharmaceutical allies will never love to see a preventive healthcare system working in India.

Thus, the necessity of preventive healthcare is slowly diverted by the government and a host of other entities towards the realm of embracing ancient techniques like Ayurveda, Siddha, Unani, Yoga, etc. to build a health barrier. Despite the intense campaigning over their benefits, these methods are not proved effective, under modern scientific standards, in preventing diseases.

However, extensive marketing campaigns are implemented to ensure these traditional medicine and fitness methods are projected as the most viable preventive healthcare solutions. Big corporate houses are earning a huge profit by selling these solutions, which remained under the carpet for decades, by packaging them with a nationalist label with the sole aim of exploiting the middle-class’ anxiety for good health.

An effective preventive healthcare programme, on the other hand, can scrutinise the sections of the society and the individuals, who are susceptible to a certain type of diseases and would recommend and initiate corrective actions to prevent the occurrence of such diseases and thereby save the people from incurring any form of physical or mental sufferings.

This method may or may not necessitate the use of medicines or surgeries, however, hygienic practices, usage of proper vaccination, avoidance of self-medication and timely health checkup, etc. can give rich dividends to the nation in terms of good health.

A robust preventive healthcare mechanism can not only prevent people from falling sick by reaching to the people before the disease or the virus can and improve the immunity cover, they will also save the government-run hospitals from excessive patient load and will ensure that the doctors and medical staffs can provide better services to a lesser number of patients.

The improvement of preventive healthcare mechanism, building up of a resilient follow-up and tracking system and several community outreach programmes targeting the poor people, will provide a booster to the country’s economy as well because a healthy workforce is always a productive workforce.

In the long run, to survive and overcome the challenges on the way of building a healthy India, the entire public health sector must be overhauled and streamlined. The private health sector must be nationalised without any compensation and turned into centres of medical excellence where the poor and toiled masses can have themselves treated with respect. To do so India needs a political force that will be eager to sever the threads that tie-up the functioning of the government to the diktats of the big corporations.

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An avid reader and a merciless political analyst. When not writing then either reading something, debating something or sipping espresso with a dash of cream. Street photographer. Tweets as @la_muckraker

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