India's 'Modicare' insurance scheme needs some fixing

• Chhattisgarh has become the latest state to exit the central government’s Ayushman Bharat insurance scheme.
  
• In addition to West Bengal and Chhattisgarh, the non-BJP ruled states of Odisha, Telangana as well as Delhi have also rejected the scheme.
  
• All of these states either have plans to or have already started their own health insurance coverage schemes.

The central Indian state of Chhattisgarh has become the latest state to exit the central government’s Ayushman Bharat insurance scheme. The state’s health minister, T S Singhdeo, said that the government would instead offer its own universal healthcare scheme featuring free medicines, outpatient care, and improved public health infrastructure via an existing network.

In addition to West Bengal and Chhattisgarh, the non-BJP ruled states of Odisha, Telangana as well as Delhi have also rejected the scheme. All of these states either have plans to or have already started their own health insurance coverage schemes.

Delhi, in particular, took a similar line as West Bengal in that it objected to how the scheme was being branded as mainly a central government programme. The common thread across these states rejecting the programme is that they are ruled by the rivals of Modi’s Bharatiya Janata Party (BJP). However, that is not the only challenge.

The national health insurance scheme was rolled out at the end of September last year, with the stipulated aim of covering 110 million families to the tune of half a million rupees a year. Around 685,000 patients had reportedly availed of the scheme by the end of 2018, according to Finance Minister Arun Jaitley.

As the minister from Chhattisgarh explained, Ayushman Bharat provided insurance for secondary and tertiary healthcare in hospitals, whereas nearly 80% of the state’s citizens required primary healthcare services.

Outpatient treatment, which is hugely popular with India’s poor households according to a Brookings report, isn’t provided under the scheme. In addition, as public hospitals lack the requisite infrastructure, the government is relying heavily on private hospitals, which aren’t that widespread in semi-urban and rural areas and can promote expensive treatments to improve their margins.

The programme is not well funded either. The central government will have to increase its annual funding for the scheme as its ₹20 billion allocation in the 2018 Budget is insufficient - a view echoed by the CEO of the programme, Indu Bhushan. As of end-December 2018, the central government had already authorised ₹8.5 billion worth of claims. A higher allocation will likely be unveiled in the government's interim budget on February 1st.

Whose insurance is it anyway

The state of West Bengal, which merged its own health protection programme Swastyasathi with Ayushman Bharat last year, also pulled out of the scheme. Chief minister Mamata Banerjee rationalised the move by citing the central government’s attempts to take full credit for what was essentially a joint effort, wherein the state government shared 40% of the cost.

While the states’ pull-out will affect the momentum and portability of the national programme, it also indicates the problems associated with its implementation. Granted, it's only been a little over 100 days since the scheme came into operation, but the gaps in the plan are already evident.


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