‘Modicare’ For Half Billion People

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India has launched one of the world’s largest health insurance programs that expects to cover 100 million families or an estimated 500 million people, at an annual estimated cost of some $1.7 billion.

India’s Finance Minister Arun Jaitley announced the ambitious plan on Feb. 1 as part of the 2018-2019 Budget, saying in parliament, that “This will be the world’s largest government-funded health-care program.”

It also includes the setting up of wellness centers around the country on an unprecedented scale.

While the U.S. is moving away from Obamacare, the program dubbed ‘Modicare ‘by Indian media, will be covering more than one and a half times the size of the U.S. population, akin to the U.S. Medicaid program which provides coverage for the poor, but focused on catastrophic illnesses.

The government plan will cover close to 500,000 Rupees, or roughly little less than $8,000 in expenses for serious illnesses requiring hospitalization.

The government is budgeting $188 million for wellness centers to expand accessibility at local levels, especially for the poor who otherwise have to travel long distances to avail of modern healthcare.

Revenues raised from a 1 percent health access — an add-on to income taxes — is expected to go partway in financing the new deal, with national insurance companies as well as states chipping in to share the cost. The government hopes that as enrollment grows, the program will begin to pay for itself.

The need for universal health care is necessary in India, says Indian-American physician and Padma Shri Dr. Sudhir Parikh, founder of the Parikh Foundation for India’s Global Development. “It is a great initiative which will, according to the government, cover 40 percent of the needy population (in India),” said Parikh, who is also the joint secretary of the Global Association of Physicians of Indian Origin (GAPIO), as well as past-president of the American Association of Physicians of Indian origin (AAPI). He called it an “long overdue” measure, that would help people access state-of-the-art health services. While the life expectancy in India has risen to 68.3, and infant mortality has dropped from 83 per 1000 live births in 1990 to 34 per 1000 live births in 2016 according to government statistics, and maternal mortality rates have declined, India still has to go a long way improving the health of its citizens.

The program “will be a game changer”, Prathap Reddy, chairman of Apollo Hospitals Enterprise Ltd., and founder president and emeritus advisor of GAPIO, is quoted saying in a Reuters report

Rajiv Kumar, vice chairman of NITI Aayog, (National Institute for Transforming India) the premier government think tank, told Bloomberg News, “If we roll this out enough within this calendar year it will be an absolute game changer,” adding, “It’s a new India that we are giving birth to.” Kumar also said funding of nearly $2 billion a year to meet the expense of health insurance for the poor, would not be hard to meet as more people enrolled in the service.

But Kumar did sound a note of caution, speculating whether state governments would work in concert with the center to make the plan a reality.

Scope of Problem

In 2014, according to the World Health Organization, India spent some 4.5 percent of its GDP on health for a population of 1.3 billion. Meanwhile, data compiled by NITIAayog, shows significant drops in infant mortality in almost every state between 2002 and 2016. However, while India has made significant advances in its health system in the last few decades, the WHO notes that India accounts for 21% of the world’s global burden of disease; the greatest burden of maternal, newborn and child deaths in the world,

Key challenges the WHO identifies in India’s health situation include the need to expedite progress in child health, under nutrition and gender equity problems; High burden of disease (BoD), even though important progress has been achieved with some diseases; and dealing with the emergence of maladies like cardiovascular and cerebrovascular diseases, metabolic diseases, cancer and mental illnesses, as well as tuberculosis, viral hepatitis, acquired immunodeficiency syndrome, water-borne diseases and sexually transmitted diseases.

NITI Aayog data also reveals the need for more healthcare centers in line with the plan outlined by the government. In 2005, there were 146,026 health “Sub-centers” around the country, rising to 153,655 in 2016; The number of Primary Health Centers rose from a mere 23,236 in 2005 to just 25,308 in 2015; And Community Health Centers rose from just 3,346 around the country in 2005,to 5,396 in 2015, inadequate by a long margin for the population of the country, and it is hoped the $188 million allocated for building Wellness Centers will meet part of the dire health infrastructure needs.

India has a patchwork of health insurance programmes — a network of private health insurance companies that provide private sector employees and individuals, government programs for its employees, Employees State Insurance that covers some workers in the organised sector and programs of some state governments, but the new program put the country on a path to universal coverage by insuring the poor across the country who have no other access to health insurance.

Solutions Tried

Anup Karan, associate professor at the Public Health Foundation of India, speaking to News India Times via Skype, said India has tried government health insurance in various forms since the middle of the last decade, and noted that there are both concerns as well as positives about the latest initiative. While the history of state-level and national health service efforts is checkered, the new initiative will have to take into account that 60 percent of health issues in India are treated in outpatient care, according to Karan’s findings, and the new insurance program covers only hospitalization.

Karan noted the “huge success” of the 2007 “pioneering” effort by Andhra Pradesh’s state funded wellness plan, Rajiv Arogyasri; the 2008 Rashtriya Swasthya Bima Yojana which saw very low enrollment ratios and huge operational issues; and the 2010 launch of state-level health insurance by Tamil Nadu, Karnataka, and Maharashtra covering only tertiary and surgical conditions, with mixed results, where Tamil Nadu experienced “very great success.”

“The new scheme announced February 1, is an enhanced version of the National Health Protection Scheme launched in 2016, in terms of coverage and funding,” says Karan. He worries that because poor people use mainly outpatient care, the new program’s hospitalization coverage may not help them as much; in addition, he worries that when the poor did access the new plan, healthcare providers may tend to “overprescribe and overtreat” the poor who may not be adequately informed about the details of the coverage.

“But at least there is a scheme and maybe gradually these points will be considered as it matures and outpatient healthcare will get covered,” Karan said. He hopes to see results by the second or third year of implementation.

Vinay Aggarwal, former president of the Indian Medical Association, gave a positive reading to The Washington Post, saying, “Before this, hardly 5 percent of Indians were covered by health insurance. If you take into account private health care, it’s hardly 10 percent. Now we’re addressing 45 percent.”

Parikh said, “On behalf of AAPI and GAPIO, I want to congratulate the Prime Minister on this initiative and hope it will be successful and eventually lead to universal healthcare,” an objective Jaitley says is achievable if the new initiative goes according to plan.