‘Modicare’ budget may have to be raised to Rs 10,000 crore to make it really work

File image of PM Modi at the launch of a health and fitness centre under Ayushman Bharat scheme | Twitter

Coming ahead of 2019 Lok Sabha elections, BJP govt’s mega health insurance scheme aims to benefit 50 crore people across the country.

New Delhi: Two days after launching Pradhan Mantri Jan Arogya Yojana (PMJAY), the Modi government wants to increase its budget allocation up to Rs 10,000 crore from the existing Rs 2,000 crore.

Coming ahead of the 2019 Lok Sabha elections, the BJP-led NDA government’s mega health insurance scheme – which some refer to as ‘Modicare’ – aims to benefit 50 crore people across the country.

Under PMJAY, the Centre plans to spend on average Rs 1,000 per household for 10 crore families. Considering each family has five members on average, the government will end up spending just Rs 200 per person if it wants to meet the target of 50 crore beneficiaries.

“We have requested for a budget allocation of Rs 10,000 crore for the scheme,” Indu Bhushan, CEO of Ayushman Bharat told ThePrint.

“The size of the scheme is huge and the government is ready to keep the budget flexible. It is a new initiative and we have been given the confidence that monetary requirements won’t stop the momentum,” he said.

According to the government’s estimate, on average each family would spend 0.2 per cent of their Rs 5 lakh quota in a year. “This means the annual expenditure would stand at Rs 10,000 crore,” Bhushan claimed.

Experts not convinced with budget estimates

Experts, however, are not convinced by the government’s budget estimates for the scheme. “The costs to the national exchequer could be 10 to 20 times greater than the initial government estimates,” said Piyush Jain, CEO of ImpactGuru.com, a crowdfunding firm.

“We know that the rate at which healthcare cost keeps rising are far greater than the inflation rate,” Jain added.

Noted economist Jean Drèze, currently a visiting professor at Ranchi University, argues that “if the beneficiaries spend just 1 per cent of their Rs 5 lakh quota in a year on average, then the annual expenditure will come to Rs 50,000 crore”.

“This is a very conservative estimate – if the scheme makes it reasonably easy for people to claim their insurance money, the actual cost could easily be twice as much, or more,” he wrote in an article.

Bhushan said the government is yet to come out with the exact budget estimates.  “Our budget allocation is open-ended and the government would not deny infusing Rs 50,000 crore or more if required,” he said.

“But our prime aim is to study the trends for the first three-four months and then come out with exact estimates. Money is not a problem,” he added.

Also, before deciding the budget allocation, the Centre has to check the loopholes in the procedures which might result in the wastage of finances, experts say.

“Being a capped reimbursement policy, chances of manipulations are less except for billing one surgical procedure as two (by hospitals). This loophole needs to be plugged,” said Dr K.K Aggarwal, former president of the Indian Medical Association.