Modicare: More of Politics, less of economics?

Prime Minister Narendra Modi calls it the biggest universal health plan unveiled by any government across the world. In what has been touted as a political masterstroke ahead of the 2019 general election, finance minister Arun Jaitley announced in Budget 2018 that the government will provide medical cover of up to 5 lakh to 10 crore citizens, free of cost.

But economists and healthcare experts are not really amused, while the main Opposition party, the Congress, calls it an “unfunded jumla”. Although Jaitley has set aside Rs 2,000 crore for this plan in FY19, many believe that the actual cost may be in excess of Rs 7,000 crore.

Not just that, back of the envelope calculations show that state governments will have to shell out over Rs 4,000 crore in the next fiscal if the plan has to succeed. Considering the poor financials of the states, many doubt if they will be ready to foot the bill.


On ET NOW’s India Development Debate, healthcare experts and politicians slugged over some important concerns over this ambitious plan. Is the Universal Health Plan just a good political slogan, bereft of sound economics?

From where will the money come from? More importantly, in the absence of standard rates for common treatments, how will it be possible to roll out this scheme at a national level? Here are some important observations:

PANEL VIEW

NARENDRA TANEJA
SPOKESPERSON, BJP

First of all, this has nothing to do with the 2019 election. This is something for the people who have been suffering. This is for the people who are poor, or have no access to medical care. This is for the people who, in the process of organising medical treatment for their loved ones, get completely destroyed.

GOURAV VALLABH
SPOKESPERSON, CONGRESS

Can you imagine a scheme that is announced in the Budget and still there is no fund allocation? I will not call this a ‘jumla’; this is the first case of an ‘unfunded jumla’. Earlier at least they used to put some amount to be spent on the ‘jumla’. Is this the way healthcare is going to be treated in India?

DEVI SHETTY
CHAIRMAN, NARAYANA HRUDAYALAYA

This is not a comprehensive health scheme which private insurance companies keep selling to the citizens of the country. This is a dramatically different insurance scheme which is meant to cover people in case of catastrophic illnesses. And we have been running this scheme for the last 14-15 years with a very modest spend because when you become a bulk purchaser you can negotiate the price both from insurance companies as well as healthcare providers like us.

SHAMIKA RAVI
MEMBER, PMEAC

We have been exploring universal health coverage for quite some time, but due to the lack of political will, it was not rolled out. Allocating funds in the current situation is perhaps the easiest thing to do. But state capacities cannot absorb such allocations. There is underutilisation. This will bring uniformity and allow states to add on. States will play ball because a fragmented healthcare market is dangerous.

VINOD PAUL
MEMBER, NITI AAYOG

The government has committed to raise the overall spending on healthcare. We have plenty of money, given the roadmap. The health cess will bring Rs 11,000 crore. We have consulted insurance companies. States have huge experience in running similar schemes. All that will be part of our framework. Participation of both public and private institutions is critical; that is the foundation for this initiative.