The central government is holding dialogues with each state and union territory about joining Ayushman Bharat, popularly known as Modicare and also called the National Health Protection Scheme (NHPS), which is reportedly scheduled to be launched in August.
To date, at least 10 states have signed on so far to the scheme. There are 29 states and seven Union Territories in the country. Modicare aims to cover 500 million low-income beneficiaries with an annual coverage of INR500,000 ($7,400) per family of five persons. The central and state governments will bear the cost of the health insurance scheme on a 60:40 basis.
As health is a state subject, each state must sign an MoU with the central government to implement the NHPS. States need to be wooed to join this ambitious scheme, since many have existing parallel schemes, which they are loath to abandon and many others are worried about the sheer optics of Modicare, reports CNBCTV18.
A senior government official told CNBC-TV18 that the premium amount for Modicare will have to be arrived at through the market discovery process but he expected it to be in three digits.
The states that do not wish to implement this scheme under the so-called trust model will have to invite quotations from insurance companies to start the health cover. Under the trust model, the government fixes prices and there is no price discovery.
A senior executive at one of the insurance companies said the Health Ministry has been seeking annual premiums in the range of INR1,000-1,100, but any decision will come after insurers get extensive data on the demographic profile of the insured universe.
"We need demographic data to analyse the costs. For example, if the universe to be insured is largely above 40 years of age, the premium will have to be on the higher side. Then, all pre-existing illnesses are supposed to be covered, the scheme has to be portable. We believe the premium could be INR2,000-2,200 but a final figure can come only after data has been analysed,” the official said.
Another insurer said the premium could be in line with the government’s expectations provided it managed to curb fraudulent practices by hospitals, became lenient with package rates etc.