National Health Protection Scheme (NHPS) – Budgetary Provision for an Idea Under Development



FM Arun Jaitley, while delivering his Budget speech for 2018-19, made it absolutely clear that his party is back into the electioneering mode.  In fact, given the policies and programmes (primarily slogan-driven) that the government has been announcing at calibrated and regular intervals, it seems that it never settled down to govern and has been perpetually campaigning since it started preparing itself for the 2014 general elections. The sloganeering and the self aggrandizement has reached such a noisy level that, despite the fact that there are apparent problems in holding the Lok Sabha and Assembly elections together, people want that to happen to buy some peace in their day to day lives after casting their votes.   More than enabling the elected governments to work through their tenure on election promises people want respite from this uncalled for political titillation that they are subjected to on a continuous basis.  Billions of man-hours are wasted discussing issues that are either irrelevant or fabricated but made to look important by warring political entities and given airtime and print-space by TRP and readership hungry media.

The big ticket initiative that the BJP government has launched in this Budget is the Health Care Insurance Scheme.  Given the fact that the state health care sector is hugely inadequate and the private sector is prohibitively expensive, there was reason to think big and out of the box to provide a comprehensive solution to the problem that the country is faced with.   However, what has been announced in the Budget is just about the intention of doing something big.  Ironically, what the FM has done is that he has announced the launch of a scheme under which a substantial Rs 5 lac medical insurance coverage would be bought for 100 million families (half a billion people) for secondary and tertiary hospitalisation – without working out the details of how it would be rolled out and funded.

The scheme entitlements should not have been spelt out before developing the required operational plan for the same and the financials worked out.   The Finance Secretary in an interview said that the details would be worked out in the next six months and around the same time the NITI Aayog CEO claimed that detailed work has been done on this in NITI Aayog in collaboration with the Ministry of Health.  One expected slightly better coordination between the principal ‘think tank’ of the country, the concerned ministry and the ministry that is supposed to provide funds before a scheme of this nature and size is announced.

Under the same scheme it was announced that health and wellness centres would be created and these will “bring healthcare closer to home” and 1.5 lac of these centres will provide free essential drugs and diagnostic services.  A sum of Rs.1200 Crores have been allocated for this and it means that each centre would, on an average, get a meagre Rs 80,000 to deliver the “free essential drugs and diagnostic services”.   Obviously, at this level of allocation nothing meaningful can be delivered and this is only going to add to the size of the programme that is already mal-functioning, if not having become dysfunctional.

The manner in which the Ayushman Bharat Programme was announced gives a feeling that it was hurriedly put together by some over-enthusiastic team of professional ‘bakhts’ in the ruling party and pushed through their bosses and the  official channels for being a part of the Budget – with, obviously, 2019 in mind.  The clairvoyant FM would have accepted the proposal because of his keenness to offset the impact of the results of the Rajasthan by-elections that were announced later on the same day.

The state of affairs in the health sector in the country is appalling.  The government run hospitals are ill-equipped to handle the health care needs of the large and growing population of the country and the private hospitals are managed by people who are ill-intentioned and driven only by commercial considerations.  Statistics can be deceptive as these can be presented to suit the argument that is intended to be articulated. There is no doubt that the aggregate indicators of health care performance would be impressive but the ground reality is that the state of affairs in the state-run hospitals is pathetic.   If patients with their families have to travel from distant states and wait – in Delhi’s extreme climatic conditions and be at the mercy of some charitable organisations for food – for weeks on the pavements outside the All India Institute of Medical Sciences in the hope of finding admission and getting treatment in the hospital, there is a reason, and a good one, to introspect.  Obviously, these people cannot find affordable treatment closer home and cannot afford private hospital treatment.  Even if they were covered under this seemingly well meaning but ill-conceived insurance scheme that has been announced, what is the guarantee that they would get the right treatment in a private hospital and that the insurance company would not be over-billed.  We have had some glaring cases of medical negligence, professional dishonesty and complete lack of ethical conduct by the best known brands in private sector hospitals that have come to light in the recent past.   The overall health care delivery system needs a complete overhaul before doors are opened for the 500 million people who would be insurance supported for secondary and tertiary treatment.

Who would determine the eligibility of the families that would be entitled to the insurance under the scheme announced in the Budget?  It would be boom-time for the lower level bureaucracy in the state governments.   A family in medical distress or wanting to cover itself against potential distress would not mind paying a reasonably handsome  bribe to become eligible for medical insurance and officials who would be assigned to enrol people into the scheme would be more than tempted, if not determined, to get into the ‘rent seeking’ mode through the implementation process.  It would result in a scam and, in fact, a big fat one.

If a corporate with a large population of people picks up a floater health insurance policy of Rs 5 lac coverage for a family of five and ends up paying, after hard negotiations, Rs 15,000 to Rs 20,000 per family, how is it possible for the government to buy a similar policy for Rs 1100 (claimed by the CEO of NITI Aayog) and that too for a family living below the poverty line and which, obviously, would be having existing un-resolved medical issues and is more vulnerable to health related problems.  This number, obviously, is not worked out by actuaries and if it has been, and is a reasonable number, there is reason for the Insurance Regulatory and Development Authority (IRDA) to take the insurance companies to task for apparently making windfall profits from their health insurance portfolios.

In addition to creating a robust delivery system that can cater to the needs of the financially supported patients, the government should have, instead of providing Rs 5 lac health insurance cover to 100 million families, gone ahead and provided Rs 2 lac cover to all the 250 million families of the country.  This would have been National Heath Protection Scheme in the real sense and would be rolled out – corruption free at the enrolment level – and at the same ‘assumed’ cost.







  1. ashutosh agarwal

    Very well summarized the facts.

  2. shshank bhardwaj

    One may recall that similar arguments were placed during the initial roll out of the mgnrega to the first 100 districts ( where will the money come from etc.). The scheme however not only succeeded but also became a global example( WB report).criticism on the budgetary allocation is unjustified, 1. There are extra budgetary resources. 2. The state schemes on the same lines such as Aarogyashree in Andhra etc can be merged( health also is a state subject). 3. Premium as low as a rupee a day from 10 crore people can be a good amount. The point being that money has never been the issue in getting things done in India, where there is a will there is a way.
    What I agree on is the dismal healthcare infrastructure, to be able to do justice to such a scheme we must highlight the appalling condition of our healthcare. There’s just not enough doctors/nurses today for each one of us. The hospital staff is largely inconsiderate and lacks basic soft skills. There needs to be involvement of the self help groups and the NGOs to make this a reality. I think these issues( instead of just talking about money) need to be brought up so that the scheme can be properly rolled out.we need to help so that our fellow countrymen can lead a dignified life, and health is one of the pillars of a dignified life.

  3. Yes, I do agree with you Shshank. Money is never an issue and it should not be if such a wonderful and large scale social welfare program is to be launched. The issues for me are: making an announcement before working out the details; the timing – with 2019 in mind; not taking into account the work that needs to be done for preparing the sector for launching such a mammoth initiative; the size of the coverage and ridiculously low premium that has been assumed or worked out; and the way people would bribe their way into the list of beneficiaries. BTW someone well to do today told me that he wouldn’t mind paying upto Rs 1 lac for getting this insurance benefit.

    I am sure that you know that MGNERGA that you have talked about was initiated by the Narsimha Rao as early as 1991 and the Act was passed in 2008. Whenever a program of the size that we are debating is launched, it makes sense to discuss and debate before firming up the plan and making announcements and that takes time. Providing Rs 2000 Crores in the Budget for developing and launching the scheme is fine with me but mentioning categorically that the coverage would be for Rs 5 lacs and 10 crore families would be covered is nothing but a political statement. If everything has been worked out as stated by the CEO of NITI Aayog, why did the Finance Secretary say that he needs time till October to work out details.

    Just because it is a social welfare program there is no reason why the intention of the authors of the program and the efficacy of its roll out should not be challenged. We need to look at things critically and not take things at their face value – this is the least that all educated people should be doing. In this case the intention and the numbers were staring at me and I just couldn’t resist the temptation of trying to call the bluff. Nothing would make me happier than being proved wrong by the authors of the policy – but not through arguments but by making a success of the program.

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