HEALTH LAW PROJECT ON

Public Health Insurance In

India

Submitted to:

Dr Ghulam Yazdani

FACULTY OF LAW

Submitted by:
VARUN MITTAL
SECTION - B
 Semester- VIII, B.A. LLB. (Hons.)
Acknowledgement

I would like to express my special thanks of

gratitude to my teacher Dr Ghulam Yazdani who
gave me the golden opportunity to do this wonderful
project, which also helped me in doing a lot of
Research and I came to know about so many new
things I am really thankful to him.

VARUN
 CONTENTS

1) Health insurance in India

2) Brief History
3) Current State of Health Insurance
4) The Central Government Health Scheme (CGHS)
5) Employees' State Insurance
6) Mediclaim Policy of the GIC
7) Specialised Insurance Scheme
8) Limitations of Insurance Sector
9) Prospectus: Directions for the Future
10) Ayushman Bharat Yojana 2018
11) Concluding Remarks
12) BIBLIOGRAPHY
Health insurance in India
The concept of Health Insurance was proposed in the year 1694 by Hugh
the elder Chamberlen from Peter Chamberlen family. In 19 th Century
“Accident Assurance” began to be available which operated much like
modern disability insurance. This payment model continued until the start of
20th century. During the middle to late 20 th century traditional disability
insurance evolved in to modern health insurance programmes. Today, most
comprehensive health insurance programmes cover the cost of routine,
preventive and emergency health care procedures and also most prescription
drugs. But this is not always the case. 1

For the last century, healthcare delivery and financing in India has been
shrouded by life insurance challenges and importantly, shares key
landmarks with general insurance. Health insurance can be defined in very
narrow sense where individual or group purchases in advance health
coverage by paying a fee called "premium". But it can be also defined
broadly by including all financing arrangements where consumers can avoid
or reduce their expenditures at time of use of services. The health insurance
existing in India covers a very wide spectrum of arrangements and hence
the latter- broader interpretation of health Insurance is more appropriate.
Health insurance is very well established in many countries. But in India it
is a new concept except for the organized sector employees. In India only
about 2 per cent of total health expenditure is funded by public/social health
insurance while 18 per cent is funded by government budget. In many other
low and middle income countries contribution of social health insurance is
much higher

Despite some progress, the current state of India's healthcare outcome

leaves much to be desired. It has glaring challenges around high out-of-
pocket spending, inequality of services, and fragmented social and
regulatory standards. Since 2001, medical insurance has gained ground
amid the proliferation of private health insurance (PHI) entities. However, it
still remains a minor contributor in the current healthcare ecosystem.

1 http://nipfp.org.in/media/medialibrary/2013/08/insurance_report_final.pdf
Amid its ongoing transformation, a govern-ment-driven universal healthcare
delivery and financing model is likely. However, PHIs still have a key role
to play in shaping goals of access, cost and quality. With healthcare
financing opening to private players, current challenges offer oppor-
tunities. A strong synergy between private and public players,
complementing each other is a major objective. A focused approach
encompass- ing public and private sectors and leveraging

emerging technology will play a disruptive role in the healthcare

transformation ahead.

PHIs need to carefully design and implement their strategies in a 1.3 billion-
strong popula- tion segmented in various strata. There are key trends around
operational efficiency, integration and standardization and customer
awareness – of which PHIs should be cognizant. Their response to these
trends will likely define the cornerstones of success stories in India.

Brief History

Since India’s independence in 1947, the govern- ment sector has been the
backbone of the health- care ecosystem, including healthcare delivery and
insurance. The term “insurance” is primarily associated with life insurance –
the most popular form of insurance in India (around 570 million insurable
lives in 2011.) There are two reasons for this- first, with low life expectancy
(37 years in 1951) and a tight-knit family structure, people primarily sought
financial security.2 Second, life insurance has been traditionally positioned
as a tax-planning tool. Health insurance evolved slowly in tandem with
general insurance (See Figure 1) with both sharing key landmarks. The
growth of healthcare delivery too was limited in the pre-liberalization (pre-
1991) era. However, after economic liberalization in 1991, care delivery
equipment, methodology, and process sharing from developed nations
became mainstream. With the improvement in healthcare delivery and
increase in disposable income, life expectancy had increased to 65 years by
2011. The Insurance Regulatory and Development Authority (IRDA)
legislation in 2000 served as a key milestone in healthcare insurance. It
opened up the health insurance industry to private players. Health insurance
membership quadru- pled between 2007 and 2011 (300 million in 2011) and
is expected to be 600 million by 2015.

2https://pdfs.semanticscholar.org/f7aa/e26952c424d84a37331b9da12af2bed
1753e.pdf
Current State of Health Insurance
Currently, healthcare delivery and financing is marked by around 72% out-
of-pocket spending. India’s per capita spending on healthcare of $109 (See
Figure 2, next page) is much lower than the global average of $863. India
trails in health outcomes behind its South Asian neighbors like Sri Lanka
and Bangladesh, which have compa- rable per capita income. There is a
wide gap in healthcare delivery for the insured and for the total population.

Health insurance is dominated by government schemes. The major public

health insurer in India is the government-owned General Insurance
Corporation (GIC) and its four subsidiaries with about 60% market share.
However, Private Health Insurers (PHIs) expanded rapidly in tier-1 and tier-
2 cities post 2005 with products cen- tered around ‘in-patient
reimbursements’ and ‘cash-less payments’.

Health insurance in India, which covered around 11% of the population by

August 2005, is provided through voluntary (2%) and mandatory (9%)
health insurance schemes.5 The market share of PSU insurers in health
insurance decreased from 64% in 2006-07 to 57% in 2008-09. The average
annual premium growth in private sector was 47% compared with the PSU
insurers’ growth rate of 27% for the period 2006-07 to 2008-09 which
indicates growing presence of pri- vate insurance in India.

Most health insurance products offered by private entities are similar to the
government-defined product, Mediclaim, and are indemnity-based. Given
its high premiums, most Mediclaim and similar policy holders belong to the
middle and upper class.

While the urban population has witnessed a proliferation in the means of

healthcare financ- ing and delivery over the past two decades, the rural
population lacks basic healthcare delivery and financing. Community health
insur- ance schemes sponsored by the government and non-governmental
organizations (NGOs) are evolving to cater to the needs of the rural
population. However, healthcare delivery and finance still leave much to be
desire3.

The Central Government Health Scheme (CGHS)

The Central Government Health Scheme (CGHS) was started under

the Indian Ministry of Health and Family Welfare in 1954 with the objective
of providing comprehensive medical care facilities to Central
Government employees, pensioners and their dependents residing in CGHS
covered cities. This health scheme is now in operation with cities such as
Bhubaneswar, Bhopal, Chandigarh and Bangalore.

The dispensary is the backbone of the Scheme. Instructions on these various

matters have been issued from, time to time for the guidance of the
specialists and medical Officers. The Central Government Health Scheme
offers health services through Allopathic and Homeopathic systems as well
as through traditional Indian forms of medicine such as Ayurveda, Unani,
Yoga and Siddha.

The CGHS is widely criticised from the point of view of quality and
accessibility. A study by the NCAER (1993) on public hospitals in Delhi
highlights many such problems. For instance, it suggests that people used
hospitals disproportionately for access to specialist consultants and notes
that individuals showed up without any referrals in 83 per cent of these
cases. Other problems included long waiting periods, significant out of
pocket costs of treatment (Rs 1,507 for first treatment in an episode),
inadequate supplies of medi- cines and equipment, inadequate staff and
conditions that are often unhygienic

Employees' State Insurance

3 https://www.scribd.com/document/20524449/Health-Insurance-Policy-
India
Employees' State Insurance (abbreviated as ESI) is a self-financing social
security and health insurance scheme for Indian workers. This fund is
managed by the Employees' State Insurance Corporation (ESIC) according
to rules and regulations stipulated there in the ESI Act 1948. ESIC is an
autonomous corporation by a statutory creation under Ministry of Labour
and Employment, Government of India.

Benefits
For all employees earning ₹21,000 (US$320) or less per month as wages,
the employer contributes 4.75 percent and employee contributes 1.75
percent, total share 6.5 percent. S This fund is managed by the ESI
Corporation (ESIC) according to rules and regulations stipulated there in the
ESI Act 1948, which oversees the provision of medical and cash benefits to
the employees and their family. ESI scheme is a type of social security
scheme for employees in the organised sector.
The employees registered under the scheme are entitled to medical
treatment for themselves and their dependents, unemployment cash
benefit in certain contingencies and maternity benefit in case of women
employees. In case of employment-related disablement or death, there is
provision for a disablement benefit and a family pension respectively.
[3]:67
Outpatient medical facilities are available in 1418 ESI dispensaries and
through 1,678 private medical practitioners. Inpatient care is available in
145 ESI hospitals and 42 hospital annexes with a total of 19,387 beds. In
addition, several state government hospitals also have beds for exclusive use
of ESI Beneficiaries. Cash benefits can be availed in any of 830 ESI centres
throughout India.
Recent years have seen an increasing role of information technology in ESI,
with the introduction of Pehchan smart cards as a part of Project
Panchdeep. In addition to insured workers, poor families eligible under
the Rashtriya Swasthya Bima Yojana can also avail facilities in ESI
hospitals and dispensaries. ESI Corporation also runs medical, nursing and
paramedical schools in some ESI hospitals across India.

Mediclaim Policy of the GIC

The GIC was set up by the government in 1973 as a public sector
organisation to market a range of insurance services, including
hospitalisation cover. It introduced the standard ‘Mediclaim’ health
insurance scheme in 1986, and became operational in 1987. This policy was
modified in 1996 to allow for differentials in premium for six age groups: 5-
45, 46-55, 56-65, 66-70, 71-75 and 76 plus. This policy was framed by the
GIC for both groups and individuals.

Before the GIC came into existence, a number of private insurance

companies were engaged in offering group health insurance cover to most
corporate bodies. With the formation of the GIC these companies were
merged into four of its subsidiaries: the National Insurance Cor- poration
(Calcutta), New India Assurance Company (Bombay), Oriental Insurance
Company (New Delhi) and United Insurance Company (Madras). All the
four companies operate nationally, although each has a regional
concentration reflective of the location of its home office. They offer a full
range of insurance types, with health accounting for a very small share of
their total business.

One purpose of the merger of all the insurance companies was to

standardise the coverage and various medical benefits. This was indeed
accomplished.

The standard Mediclaim policy covers only hospital care and domiciliary
hospitalisation benefits. Although some insurance companies have earlier
experimented with direct reimbursement to hospitals and other providers, at
present all that is offered is reimbursement insurance. With this the
‘enrollees’ are reimbursed for their medical claims only after the payments
have been made out of pocket to the provider. The GIC so prescribes
premiums, eligibility and benefit coverage for all the four subsidiaries that
they do not compete along any of these dimensions. All four firms have
significant delays in claims processing. We discuss these delays and other
related issues below. 4

Detailed overviews of the Mediclaim programme have been provided in

studies by Ratnam (1995) and the GIC (1995). These reviews present a
more favourable user attitude to Mediclaim than to ESIS. This is clearly
reflected in enrolment trends. Whereas enrolment in the ESIS programme
has increased by only 10 per cent over the past five years, enrolment in

4 http://shodhganga.inflibnet.ac.in/bitstream/10603/9222/13/13_chapter
%204.pdf
Mediclaim insurance has increased by 174 per cent over the same period.
The number of persons covered by the Mediclaim policies at the end of
1994 was 1.8 million (see Table 4, which also provides information on
policies issued, enrolments, premiums and claims reported and settled since
1987). It is striking how premium revenues have grown more than twice as
fast as the number of covered lives between 1989-90 and 1994-95 and how
the number of claims settled has grown even faster than premium revenues.
Thus far, the premium revenue of Mediclaim has managed to keep ahead of
claim payments. This, however may not hold good in future owing to the
accelerating growth in amounts paid to the settled claims. It is also revealing
that the claims per covered person have been growing 37.5 per cent
annually between 1989-90 and 1994-95.

One of the major weaknesses of Medi- claim is that it covers only

hospitalisation and domiciliary expenses, leaving out routine out-patient
care. Moreover, the coverage is subject to numerous exclusions, coverage
limits and restrictions on eligibility. Many of the people that we spoke to
mentioned incidents in which either the medical spending claim was
disallowed or only partial reimbursement was received. A further criticism
of Mediclaim is that the premiums are high in relation to the claim
payments: as can be seen in Table 5, column 4, the average claim payments
are only 58 per cent of average premiums. Finally, there

seems to be a mutually beneficial relationship between the Mediclaim

programme and most of the corporate hospitals. These hospitals get regular
business from the middle and upper income segments of the population
[Phadke 1994] which are now increasingly covered by Mediclaim. These
and other issues will be discussed further.

Specialised Insurance Scheme

The Life Insurance Corporation of India (LIC) introduced a speciality
insurance programme in 1993 which covered medical expenses for only
four dreaded diseases. This programme was withdrawn sub- sequently, but
reintroduced in 1995. By definition, it is very limited in scope. It does not,
therefore, serve to reduce the risk of financial burdens to any significant
extent. It also remains to be seen whether or not this programme will be a
popular method of insurance.

The GIC’s Jan Arogya Bima Policy is yet another scheme of medical
reimburse- ment being offered to people on an indi- vidual basis. The annual
premium for the youngest people age group is only Rs 70, as against the
coverage limit of Rs 5,000 per year. Higher premiums are charged for older
persons or those with spouses or dependents. Y et the premiums remain low
in relation to the maximum coverage. Even this low-maximum coverage
level will pro- vide considerable coverage against low cost hospitalisations.
Another significant difference is that it also covers maternity expenses.
Apart from these few differen- ces, this policy retains most of the Medi-
claim features. It remains to be seen how successful is in comparison to
Mediclaim.

Limitations of Insurance Sector

An important conclusion emerging from the preceding discussion is that a
large proportion of the population in India does not have the choice of
facilities available to theworkforceoftheformalsector.The large number of
separate networks of providers tends to make for reduce inefficiency and the
choice among providers: only a limited set of providers is offered to a given
employee.

A majority of the large public and private establishments are either self-
insuring or provide reimbursement plans to their employees. These
employers may be more than willing to switch over to private third party
insurance, should it become avail- able. This is particularly true for the
large- scale enterprises which provide their own clinics and personnel.
Given that the employee demand for quality treatment and specialists’ care
is increasing rapidly, these enterprises would find it worth their while to
switch to an insurance structure.
Key Challenges in the Healthcare
 Affordability and accessibility chasm: There is a large gap between
healthcare delivery and financing in urban areas and rural areas.
While a majority of the population resides in rural India (68.4 %),
only 2% of qualified doctors are available to them. 7 The rural
population relies heavily on government-funded medical facilities.
This gap is exacerbated because the private and public systems do not
complement each other. Affordable care (government hos- pitals or
community-based care) suffers from quality issues and is unable to
cater to the basic healthcare needs of the population. While some
private care delivery centers and profes sionals are accessible to the
needy, they are not affordable for a majority of the population.

 High variation in quality of services: Often an individual has to

reach out to multiple lev- els of care delivery providers
(professionals, physicians, government hospitals, and private
providers) to seek care for the same episode. This leads to
compartmentalized care with cost and quality concerns. Moreover,
issues with medical procedures account for a large share of adverse
drug events (around 19.1 % in New Delhi, according to a recent
study)8. Over- all deaths in India due to adverse drug reac- tions are
estimated to be 400,000 annually.
 Medical health insurance penetration: Health insurance is a minor
contributor in the health- care ecosystem.10 Insurance payment struc-
tures are based on an almost retrospective arrangement of indemnity-
based payments. Indian insurance has been limited to critical illness
coverage for inpatient surgical proce- dures and often one-time lump-
sum payouts.
 Associated social facilities: Inadequate social determinants of health
such as nutri- tion, food security, water and sanitation is a major
hindrance in the success of healthcare delivery and financing.11
 Absence of regulatory and standardized operating procedures:
There is a need for a strong regulatory framework to organize and
standardize healthcare delivery and financ- ing. The dominant
reimbursement method is fee for service (FFS) which differs from
pro- vider to provider. Providers are the dominant entities and
influence the pricing and contract arrangement.
 Lifestyle changes: There have been disrup- tive lifestyle changes in
the country over the past two decades mainly due to the rapidly
evolving urban economy and the Indian middle class. It is estimated
 that around 130 million people may suffer from lifestyle diseases
such as diabetes and obesity in the next few years, leaving a $160
billion hole in the national econ- omy between 2010 and 2015.

Prospectus: Directions for the Future

In India has limited experience of health insurance. Given that government

has liberalized the insurance industry, health insurance is going to develop
rapidly in future. The challenge is to see that it benefits the poor and the
weak in terms of better coverage and health services at lower costs without
the negative aspects of cost increase and over use of procedures and
technology in provision of health care. The experience from other places
suggest that ifhealth insurance is left to the private market it will only cover
those which have substantial ability to pay leaving out the poor and making
them more vulnerable.

Hence India should proactively make efforts to develop Social Health

Insurance patterned after the German model where there is universal
coverage, equal access to all and cost controlling measures such as
prospective per capita payment to providers. Given that India does not have
large organized sector employment the only option for such social health
insurance is to develop it through co-operatives, associations and unions.

The existing health insurance programmes such as ESIS and Mediclaim also
need substantial reforms to make them more efficient and socially useful.
Government should catalyze and guide development of such social health
insurance in India. Researchers and donors should support such
development.

Regulation of Health Insurance

The foregone points regarding a com- plete review of the health insurance
sector are related to its regulation as well. This suggestion is applicable to
all the health insurance agencies, be it the GIC or any other corporation or
company. In addition to regulation of premium structure, exclu- sion
clauses, extent of coverage, etc, the following measures may also be
necessary.

(i) Discourage ‘dreaded disease’ or other specialised policies: The govern-

ment should discourage schemes like the one currently offered by LIC
which covers only four selected diseases. Such

specialisation further segments the coverage rather than broaden it.

(ii) Encourage health insurance for the specially vulnerable: Health

insurance cover for the elderly, unemployed, per- manently disabled, etc,
deserves special attention. Subsidised insurance plans for these categories of
people are worth ex- ploring. Mediclaim benefits, now available only to
employees, their spouses and children, may be extended to dependent adults
(perhaps just grandparents initially) for a supplementary premium. This is
just one example of which can be done

Review and Revise Mediclaim

If the objective of providing some kind of insurance to the general
population is a priority area for health policy planners, a beginning can be
made by carefully reviewing the mediclaim system. Some areas which need
particular attention are as follows.

(i)Premium structure: The current premiums are too high in relation to

claims payments. The current bonus and ‘malus’ system for adjusting claims
is such that the insurer is always guaranteed at least a 20 per cent margin
over the previous year’s level of incurred claims. Also there does not appear
to be a mechanism through which premiums are reconciled according to
settled claims rather than proffered claims. Finally, the discount on group
in- surance for large employers is un- realistically large. Revising the
premium schedules will make health insurance more accessible to
individuals from lower socio-economic categories

(ii) Out-patient coverage: There is a need for insurance cover to meet the
growing cost of out-patient treatment. The reasons why some people pay a
great deal out of pocket even when they are already covered by the GIC or
the ESIS should be identified so that corrective measures could be devised.

The obtaining of referrals before going to expensive secondary and tertiary

facilities can be encouraged by providing for the GIC to give lower
reimbursement when higher-level care is sought without a referral.
(iii) Limit exclusions for pre-existing conditions: At present Mediclaim does
not cover most of the chronic or pre- existing conditions. This leaves out
large segments of the population who suffer from diseases like diabetes,
hearing dis- orders and STDs. Such exclusions should be carefully reviewed
and amended, for example, exclusions for pre-existing con- ditions can be
made valid for not more than a year.

(iv) Require greater efficiency in processing of claims: Consumers should

be given a time schedule so that there is no uncertainty about the amount of
reimbursement and the time within which they can hope for reimbursed.
Delays in prepayment and arbitrary denial of claims need to be minimised.

(v) Increase visibility: In our assessment Mediclaim is not an exceptionally

popular scheme. Most prospective consumers know little or nothing about
it. This should be rectified through publicity.

(vi) Require greater monitoring of fraud and excessive fees: The

government should make it mandatory for all insur- ance companies to
devote more resources to monitoring fraudulent claims and establishing
schedules of appropriate fees for specified procedures.

Need to Reform the GIC

There is a lot of debate on the scope for ‘privatisation’ of health insurance.
The Mediclaim system comes closest to this concept. The system of having
four dominant insurers – who generally compete on service quality but have
regulated prices, eligibility and benefit features – does avoid some of the
more severe problems of adverse selection and undesirable forms of benefit-
feature competition. Other problems with the GIC system, however, remain.

Evidence suggests that over the past five years the GIC’s claims have been
growing at more than 30 per cent a year – which substantially exceeds the
growth of public health-care spending or individual spend- ing. It seems
plausible that this growth is in part the moral hazard response to insur- ance.
However, such high rates of increase imply that there is enormous potential
for increased spending by other segments of the poulation, should the
insurance coverage be extended to new groups.

The manner in which the GIC premiums are changed from one year to the
next is clever in that it ensures that the corporation does not have to take in
premiums that are persistently below claims. A further clarification on this
is as under.
Even the high margin of GIC premiums over claims understates the true
margins. Subsequent-year premiums are calculated on the basis of incurred
claims, not on paid claims. If the claims are eventually denied the difference
would apparently go unreconciled while adjusting future premiums. Besides
increasing profit margins this feature builds in an incentive for the insurers
to delay payment on claims. This is one of the major complaints against the
GIC’s Mediclaim policy.

The existing GIC programme covers only in-patient and hospital

domiciliary expenses. This leaves consumers to shoulder financial burdens
arising from out-patient expenses.

Finally, there is a lot of uncertainty about the amount an insurer will

reimburse and the time within which it will do the needful. This discourages
resort to insurance.

Reforming ESIS and CGHS

Although the number of beneficiaries of the ESIS has grown modestly over
time, enrolment has not kept pace with growth in the GIC, the organised
sector or even the number of low-wage workers that the ESIS is supposed to
cover. For reasons discussed above, employees have been reluctant to avail
themselves of the ESIS facilities. Here again, the argument of improving
quality of services offered under the ESIS holds.

Numerous studies have shown that the providers of treatment at ESIS and
CGHS facilities do not have adequate incentive to exert themselves. These
facilities generally suffer from low provider morale, understaf- fing and
equipment shortages. Improve- ments in the quality of services offered by
these facilities can be effected by decentral- ising the decision-making
process and intro- ducing reforms in financing norms. An incen- tive may be
provided by allowing the faci- lities to charge user fees – even if the fees are
paid by the government on the basis of the patient-load factor. An
alternative strategy might be to merge the two systems of facili- ties with
the rest of the public health system.

Ayushman Bharat Yojana 2018

The union budget of the financial year 2018-2019 has laid the foundation
for kickoff start of the flagship National Health Protection scheme (NHPS),
this is coined as Modicare Or Namocare by his many. As the ambitious
health protection scheme went missing in the last year’s union budget, the
finance minster Mr. Arun Jaitley today announced the flagship scheme
which offers various health benefits to several poor peoples of the nation.5
About NHPS-2018

The newly announced National Health care scheme-2018 is hinted by PB

Mr. Modi during the year 2016 in order to provide necessary health care
protection to the poor peoples of the nation and it will be the world’s largest
state-funded healthcare program.

National Health Scheme

Under this scheme each poor family will get Rs. 5 Lac per year to protect
their health. It will be the world’s largest health care protection scheme till
date. Under this scheme nearly 10 Cr families will be protected that means
over 50 Cr people will be benefitted from the scheme.

Key Features

 This new NHPS will overcome the flaws of the existing scheme
Rashtriya Swasthya Bima Yojana, which offers health insurance
coverage to the poor workers who are working in the unorganized
sectors.

 The FM Mr. Arun Jaitley has announced that the new NHPS – 2018
will be offer Rs. 5 lakh per year to all the eligible families of the
nation for their medical care.

 The scheme is set to cover more than 10,000,000 poor and unsecured
family members of the nation, and it is expected that about
50,000,000 people will be benefited under this NHPS.

 Under the regulations stated by the government the health insurance

scheme will be offering coverage to the beneficiaries such that they
can get benefit of cashless treatment facility. The beneficiaries will be
able to take the treatments within the country in private as well as
government hospitals and health care centers.

 As other health insurance scheme are mainly focused on offering

coverage to expensive medical treatments so not many people are
able to take benefit of these insurance schemes. By implementing

5 https://www.pradhanmantriyojana.in/ayushman-bharat-yojana/
 Modicare (namocare) insurance scheme all these people will be able
to avail the benefit of the insurance plan.

 It would be cashless and aadhaar enabled scheme

Eligibility Criteria Of Modicare

 According to central government statements the scheme is designed

to offer coverage to over 10 crore families (approximately over 50
crore individuals) within the country. The scheme will offer complete
coverage to families who have earlier been deprived from other
health insurance schemes.

 The coverage will be offered as per the data collected under the
social-economic caste Census conducted by the government (SECC)
2011. Under the regulations the scheme is designed to offer coverage
to the beneficiaries irrespective of the number of members in the
family.

 As the insurance coverage will be offered to the beneficiaries via

Aadhar based biometrics so it is obvious that to take the benefit the
eligible beneficiary has to hold his or her valid Aadhar card ID.

 As the scheme does no offer with limitations with family size for the
beneficiaries so the government has also stated that this scheme is one
of the largest funded programs on the global platforms.

Premium per family under the Namocare

 The government has stated that Rs 1100 and Rs 1200 on monthly

basis will be set as premiums to be paid under the scheme. The
beneficiary can then be offered with complete cashless treatment as
coverage amount under the scheme.

 The government has also stated that by investing above mentioned

premium each of the beneficiary family registered under the scheme
will be able to take Rs 5 lakh benefit on yearly basis for medical
treatments.

Extra Health Cess On Ayushman Bharat Programs

 In the current budget the FM has also announced to get started with
deducting Health Cess that is equivalent to 1 percent. The amount
 will be deducted from each of the tax payer nationwide by the Health
Ministry.

 This additional burden of 1 percent will be levied upon the tax payers
so that the Healthcare scheme can be implemented for offering
benefit for maximum number of people.

 Rs 11,000 crore is expected to be collected by health cess under the

scheme. This money will help in funding it in initial stages yearly.
The amount of health cess will be borne by each of the tax payer who
is eligible to pay income tax as per the regulations.

Phases

 The government has clearly mentioned that the process of

implementation will be carried out in three phases nationwide. The
government has also made it clear that immediately after the launch
on 2nd October 2018 the scheme will be implemented in its 1st

 The government has also mentioned that the process of

documentation under the scheme will be completed and finalized by
June end. The packages for implementing in the scheme will be
finalized by the authorities by April end 2018. The phase is also set to
start by 15th August 2018 as per the guidelines made.

Health and Wellness Centres

By allocating Rs. 1200 Cr, the Union Finance Ministry has announced about
the Health & Wellness Centres across the nation. These centres will have
proper equipments to provide medical care to the women, child, maternity
and people with non-communicable diseases. Over 1.5 Lac centres will be
expected to establish.

Other facilities

Along with these two flagship programs, 24 government medical colleges

and hospitals will be established across the nation. According to the FM,
each state will have at least one government medical college under the New
India 2018. This will ease the medical and health care access for the general
people of the nation.
Budget Allocation

 A sum of Rs 10,000 to Rs 20,000 crore will be allocated by the centre

on yearly basis for implementation of the scheme. This coverage has
been calculated with an aim to lower the cost of premiums for the
beneficiaries.

 According to the updates the government has also announced to

merge the already existing Rashtriya Swasthya Bima Yojana to be
channelized for smooth implementation of the NHPS. The overall
budget allocated for implementation of this scheme was set to Rs
2000 crore for fiscal year 2018-19.

 To make the process of implementation more effective the

government has also stated that it will try and provide with additional
Funds of Rs 11,000 crore annually that will be collected from the 1
percent cess tax collected by the government that was introduced by
the FM in the current budget.

 Further statements were made that in the initial stages of

implementation the states will be expected to make a contribution of
50 percent towards the premiums. The central government will have
to allocate a fund of Rs 5000 to Rs 6000 crore for getting started with
the process of implementation.

 The government has also set a budget of Rs 10000 crore which will
be invested in the scheme in first stage of launch. The state
government and central government will share the amount as Rs 4000
crore and Rs 6000 crore ratio.

Mission Director of Ayushman Bharat

In the recent news came from the central, it has quoted that Manoj Jhalani,
who is currently holding the position of additional secretary in Health and
family ministry has been given extra designation as mission director of the
scheme.
 Concluding Remarks

There are two important limitations of the present health

care system and its financing in India. The first limitation
is exceptionally high health care expenditure over three-
fourths of which is private out-of-pocket expenditure. The
other one relates to unsatisfactory outcomes of these
expenses. Most of the out-of-pocket expenses are borne by
households engaged in low- income informal economic
activities. Those in the organised sector are covered by
health plans. But the majority of the low-income people are
left to suffer either from poor health-care delivery or to
incur high out-of-pocket expenses, or both. Even those
covered by health plans experience growing inefficiencies
and low quality of services. A revamp of the health system
with expanded and improved health insurance facilities, is
therefore essential.
 BIBLIOGRAPHY

 http://nipfp.org.in/media/medialibrary/2013/08/insura
nce_report_final.pdf

 https://pdfs.semanticscholar.org/f7aa/e26952c424d84a
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 http://pmjandhanyojana.co.in/national-health-
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 https://www.scribd.com/document/20524449/Health-
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 https://en.wikipedia.org/wiki/Central_Government_H
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 http://shodhganga.inflibnet.ac.in/bitstream/10603/922
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 https://www.pradhanmantriyojana.in/ayushman-
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