Cabinet approves Ayushman Bharat health insurance schemeThe National Health Protection Scheme (NHPS) or Ayushman Bharat health insurance scheme was proposed in Budget 2018 and was formally approved by the Union Cabinet on Wednesday to provide health insurance coverage to a large section of Indian citizens.

What is the NHPS?

The NHPS proposes to provide health cover of Rs 5 lakh to every Indian. This cover will take care of almost all secondary care and most of the tertiary care procedures, according to a government statement. It will cover the cost of treatment at private as well as government hospitals. All pre-existing diseases will be covered, while it will be portable across the country. It will cover three days of pre-hospitalisation and 15 days of post-hospitalisation costs.

The statement adds that a defined transport allowance per hospitalisation will also be paid to the beneficiary.

The premiums for this scheme will be paid by the Government from the budget which it estimates at about Rs 1,200 per family per year. However, insurance companies have approached the government saying that they may not be able to bid for the scheme at this premium level. They estimate the required premium to be higher at about Rs 2,500 per year.

The scheme will be headed by the health minister. However, state governments will also play a role, approving package rates for treatments under the scheme. The NHPS will replace the exiting Rashtriya Swasthya Bima Yojana (RSBY) which provides an annual health cover up to Rs 30,000, and the Senior Citizen Health Insurance Scheme (SCHIS) which gives an additional Rs 30,000 cover.

The government has allocated Rs 10,000-12,000 crore per year for this scheme. The scheme will initially cover 10.74 crore families. Beneficiaries will be identified by the Socio-Economic Caste Census (SECC) and will be gradually expanded to cover 40% of India’s population. The cost of the scheme will be shared between the Centre and the States in a 60:40 ratio.

Different states use different yardsticks in their own health insurance schemes and integrating them with NHPS will be a challenge. States will also have to decide whether the execution will be done through a trust or through an insurance company based on bidding.

The Cabinet also extended the life of the existing National Health Mission to 2019-20 at a cost of Rs 8,520 crore. The NHM provides free health services to people below the poverty line.

Eligibility for the scheme

Ayushman Bharat will be an entitlement based scheme with entitlement decided on the basis of deprivation criteria in the SECC database. The different categories in rural area include families having only one room with kucha walls and kucharoof; families having no adult member between age 16 to 59; female headed households with no adult male member between age 16 to 59; disabled member and no able bodied adult member in the family; SC/ST households; and landless households deriving major part of their income from manual casual labour, Also, automatically included families in rural areas having any one of the following: households without shelter, destitute, living on alms, manual scavenger families, primitive tribal groups, legally released bonded labour. For urban areas, 11 defined occupational categories are entitled under the scheme.

How will it affect you?

It may not affect you immediately. Coverage will only be gradually expanded under the scheme. Do not stop paying premiums on your existing health insurance policy. These are not only tax deductible under Section 80D but may also provide you with a host of features that NHPS may not provide. These features may include additional ailments, room rent and other hospitalisation costs.

If you are covered by an employer-provided scheme, you can use it as a supplement to any eventual NHPS coverage, you may come under.

Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.