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March 22, 2017

A blessing of good health

National Health Protection Scheme to boost health insurance penetration to over 50%

The Union Cabinet on March 21, 2018, approved the launch of a new centrally sponsored scheme called Ayushman Bharat – National Health Protection Mission.


The scheme, under which more than 10 crore families from poor and vulnerable sections will get a cover of Rs 5 lakh per family per year, will subsume the ongoing centrally sponsored schemes –Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme.


The Union Cabinet approved a budgetary support of Rs 852 billion (as Centre’s share) between fiscal 2018 and fiscal 2020 to the on-going National Health Mission (NHM), which has two sub-missions: the National Rural Health Mission and the National Urban Health Mission.


The government will integrate NHPM into the NHM.


Our view


CRISIL believes the latest thrust to affordable and quality healthcare for all, especially the economically disadvantaged citizens, is well-intended and will boost insurance penetration from the current 33% to more than 50% on implementation.


As of fiscal 2017, nearly 438 million persons were covered under various health insurance schemes, including 335 million under various government sponsored schemes including RSBY. With the new scheme, the coverage will increase to more than 650 million persons.


However, the mechanism and vehicle for raising the humongous resources required for the moves will be a key monitorable. The National Health Mission has seen cumulative expenditure of Rs 532 billion in the last two fiscals and the government has already allocated budgetary support of Rs 301 billion for fiscal 2019. During this period, the government has also spent Rs 38 billion on insurance schemes (Rs 9 billion on RSBY and Rs 29 billion on CGHS Pensioners) and has already allocated budgetary support of Rs 36 billion for fiscal 2019 (Rs 20 billion on RSBY and Rs 16 billion on CGHS Pensioners).


The execution framework, too, is unclear at the moment. However, we believe the sector could be in for a huge fillip if the intent is pushed through.