News Life and Health08 Feb 2018

India:States can work with insurers to implement Modicare

08 Feb 2018

The National Health Protection Scheme (NHPS), proposed in the 2018-19 Budget to provide health cover to 100 million poor families, will be implemented at the state level with states to serve as custodian of the tax-funded scheme.

To implement the scheme dubbed Modicare, some states can choose an intermediary such as an insurance company while others may try a trust model in which there will be an autonomous body under the government that will bear all the expenditure, said Dr Vinod Kumar Paul, member (health and nutrition) of the country’s apex policy think tank NITI Aayog, who led the team that designed the scheme.

In an interview with Livemint, Dr Paul said that through Modicare, India will reduce impoverishment due to out of pocket health spending and take healthcare in India to the next level by covering the poor and vulnerable. In India, out-of-pocket expenditure is over 60% which is one of the highest in the world. Around 60-70 million people fall into poverty each year due to medical expenses.

Dr Paul said that the NHPS will be a cashless Aadhaar-enabled scheme with the central and state governments sharing the funding on a 60:40 basis. Aadhaar is a 12-digit unique identity number issued to an Indian resident.

The scheme will be finalised after further consultations with state governments, preparation for a fraud-proof information system, states’ preparation for beneficiary identification, and finalisation of guidelines for hospital empanelment and strategic purchase. As soon as the states are ready, the scheme will be rolled out. The scheme, to be delivered by a network of public and private hospitals, will cover most medical conditions requiring tertiary and secondary care.


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