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Universal Health Care Plan Put on Hold by PM Modi as Costs Escalate

Prime Minister Narendra Modi has asked its officials to put a brake on the ambitious universal health care plan after costing comes at $1.16 trillion over five years, which would make country’s financial crunch more severe.  

Last year, the health ministry had formulated a draft policy on universal health care in coordination with the prime minister's office. The National Health Assurance Mission aims to offer free drugs, diagnostic services and insurance to India's 1.2 billion people. The plan was initially proposed to roll out from April 2015 and in October, 2014 the costing was projected as $25.5 billion over four years. By the time it was presented to Modi, the total costing had been reduced to 1.16 trillion, which is still very high.

Ahead of the Center election, Modi’s manifesto accorded ‘high priority’ to the health sector and promised a universal health insurance plan. The manifesto clearly detailed that previous health schemes had failed to meet bourgeoning medical needs of public.

At present, India spends nearly 1 percent of its gross domestic product (GDP) on public health, however, in the badly managed health system; these funds are not completely utilized. Even in this year federal budget, the allocation to the health department was only increased by 2% as compared to the previous year.

The health plan was drafted in consultation with Modi’s office and an expert panel, including an expert from the World Bank. The proposal included insurance coverage to expensive ailments like organ failure, heart surgery, etc.  Now chances are high that this benefit will also be withdrawn.

The decision to curtail level of insurance coverage will have an adverse impact on the country’s private health sector, which would have seen a massive business growth as the programme channeled millions of new patients into private hospitals. The health insurance is not very popular among people and currently only 17% of India’s population is having health insurance. 

Source: This article has been adapted from the article " Spending cuts: PM Modi puts brakes on promised universal health care plan" that appeared on Mar 27, 2015 in firstpost.com.

Written By: PolicyBazaar - Updated: 14 December 2020
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