India allocates 100 billion rupees for 'Modicare' health insurance

Health Minister J.P. Nadda speaks to the media at his office in New Delhi January 14, 2015. REUTERS/Adnan Abidi/Files

MARCH 22, 2018

NEW DELHI (Reuters) - India has allocated 100 billion rupees ($1.54 billion) for its ambitious health programme aimed at providing insurance cover for about half the population, Health Minister J.P. Nadda said on Thursday, labelling it the largest such scheme in the world.

Prime Minister Narendra Modi’s government, which has dubbed the scheme “Modicare”, announced in February the programme would provide 100 million families, or about 500 million poor people, with health cover of 500,000 rupees per year for treatment of serious ailments.

The union budget had made an allocation of 20 billion rupees for the scheme for 2018-19, but officials had said more funds would be made available as the programme was rolled out.

Health Ministry officials said the government has allocated 100 billion rupees ($1.54 billion) for the “National Health Protection Mission” for 2018/19 and 2019/20.

An ambulance arrives as people stand at the entrance of the emergency department of a government-run hospital in New Delhi, India, November 22, 2017. REUTERS/Saumya Khandelwal/Files

“It’s a historic step and a bold decision. It will be the largest public funded health protection scheme in the world,” Nadda said at a news briefing.

The measures are Modi’s latest attempt to reform a public health system that faces a shortage of hospitals and doctors. The government has also in recent years capped prices of critical drugs and medical devices and increased health funding. 

India's Prime Minister Narendra Modi speaks with the media inside the parliament premises on the first day of the budget session, in New Delhi, India, January 29, 2018. REUTERS/Adnan Abidi/Files

Still, India spends only about 1 percent of its GDP on public health, among the world’s lowest, and the health ministry estimates such funding leads to “catastrophic” expenses that push 7 percent of the population into poverty each year.

“This will give underprivileged families the financial support required when faced with illnesses requiring hospitalization,” Nadda said.

($1 = 65 rupees)