New Delhi: A mega health insurance scheme which aimed to cover four out of 10 Indians was one of the highlights of Thursday’s Union budget. Finance minister Arun Jaitley termed it ‘Modicare’, on the lines of Obamacare, the American universal health insurance plan launched during the presidency of Barack Obama.

The National Health Protection Scheme (NHPS) aims to offer health insurance up to Rs5 lakh per family per year, covering over 100 million vulnerable families, benefitting about 500 million people. Both secondary and tertiary care hospitalization will be covered. Jaitley claimed that Modicare will be more successful than Obamacare.

“This will be the world’s largest government-funded healthcare programme. My government has now decided to take health protection to a more aspirational level. Adequate funds will be provided for smooth implementation of this programme. The government is steadily but surely progressing towards the goal of universal health coverage," Jaitley said in his budget speech.

The new scheme comes even as a scheme from the last Union budget to provide health cover up to 1 lakh per family is yet to be implemented.

“A major highlight of the budget is the launching of the scheme which is India’s leap towards universal health coverage. The National Health Protection Scheme will provide a desired cover for the secondary and tertiary care per family. This will be the largest government-funded health protection scheme and will ensure that impoverishing spending by the poor and the vulnerable will diminish," said NITI Aayog member Vinod Paul.

Data from the socio-economic caste census of 2011 will be used to choose NHPS’s beneficiaries. States will roll out the scheme, while a national health agency with robust fraud control mechanisms will be created under the health ministry. There will be no cap on the family size, said two people familiar with the matter.

In order to provide cashless, paperless and quality medical care involving hospitalization, state-level health agencies will be formed to implement the scheme. “While the centre will encourage the states to adopt a trust-based model to run the scheme, the states will have an upper hand to drive the scheme as they want," said a person aware of the details of the scheme, requesting anonymity. A trust-based model means that instead of insurers, state-run trusts with funds contributed by the centre and states will process and settle the claims of hospitals that provide such services.

“Both public and private hospitals will be empanelled using strict criteria. The cost of treatment will have to be standardized," added the person cited above. An insurance card, which will be linked to Aadhaar, will be treated as an identity card to avail of the procedures or treatment at empanelled hospitals. Discussions are also on to create a separate inter-ministerial governing council which will be responsible for monitoring the scheme, said another person familiar with the matter.

An existing scheme called Rashtriya Swasthya Bima Yojana (RSBY), providing an annual coverage of only Rs30,000 to poor families, will see some changes. “RSBY will be changed; we have not yet decided whether it will be a trust model or insurance as its framework is still being worked out. Rs30,000 cover will also be made larger with a wider base. Budget for this has already been allocated and it will be implemented soon," said Ajay Narayan Jha, expenditure secretary in the finance ministry. RSBY was transferred to the health ministry in April 2015 to serve as the blueprint for NHPS.

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