News Life and Health16 Aug 2018

India:National Health Protection Scheme to be launched on 25 Sep

16 Aug 2018

Prime Minister Narendra Modi yesterday announced his flagship project, Ayushman Bharat or National Health Protection Scheme, will be launched on 25 September.

"The healthcare initiatives of the government will have a positive impact on 50 crore Indians," Mr Modi said, announcing the scheme during his Independence Day speech yesterday.

Dubbed ‘Modicare’ and touted as the world’s largest health protection scheme, Ayushman Bharat aims to cover over 100m poor families (about 500m beneficiaries) and provide health cover of up to INR500,000 ($7,090) per family per year. The scheme was initially announced by then finance minister Arun Jaitley in his Budget speech in February this year.

Premiums under the medical insurance scheme will be paid for by the government, shared between the central and state governments in proportions per Ministry of Finance guidelines. The scheme may be implemented by buying group cover from insurance companies or in a trust model.

As many as 23 states (out of a total of 29 states and seven Union territories) are understood to have decided to adopt the trust model, reports Times of India. This indicates that there will be limited opportunity for insurers.

Mr G Srinivasan, who stepped down as chairman of New India Assurance last month, said, “A trust, which will get the money allotted for the premium, will take over the job of the insurance company. If there is a shortfall in funds allocated, the government — probably the state government — will have to make good as there is no entity that takes on the risk like in an insurance model.”

However, a handful of the 23 states are adopting a hybrid model where they would buy insurance for a small amount of up to INR50,000 per family as against a cover of INR500,000 under the scheme.

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