Budget 2018: India gets closer to universal health scheme, but several questions remain

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26 Aug, 2025 12:21

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In a major step towards providing Universal Health Coverage - a promise made by Narendra Modi government - finance minister Arun Jaitley in the Budget announced a National Health Protection Scheme (NHPS) providing Rs 5 lakh health insurance to 10 crore poor families.

But several questions remain on the implementation of the scheme.

Jaitley said NHPS is expected to benefit 50 crore people across India and called it the largest government-funded health insurance scheme to be implemented anywhere in the world.

Under NHPS, people will get medical treatment in secondary and tertiary hospitals. Till now, the government-sponsored health insurance scheme, Rashtriya Swasthya Bima Yojana (RSBY) provided Rs 30,000 cover for a premium of Rs 30 per annum. But that is insufficient to cover most medical procedures.

As per the data available on the website, there were 36.3 million active card-holders under the RSBY scheme. In an interview with DD News post the budget, finance minister Arun Jaitley said that the aim is to have a universal health coverage for the Indian public.

Antony Jacob, CEO, Apollo Munich Health Insurance said that the NHPS is a welcome move not just to maintain a healthy India but also to create several lakh/s new jobs in the country as new healthcare facilities will come up in smaller districts and villages.

Jacob also added that the scheme will be subsidised by the government and considering the volumes of the people that will be covered, it will not be a challenge for provide for the scheme.

A regular Rs 5 lakh insurance scheme costs between Rs 3500-5000 depending on the cover. Experts say that the centre may pay 40 percent of the premium, while 60 percent will come from states. Considering the population in smaller towns and villages, it is anticipated that the medical costs will be much lower that will bring down the annual premium.

Joydeep K Roy, Partner & Leader-Insurance, PwC India explained that the most appropriate thing to do would be for the government to partly subsidise the premium payment and leave the operationalisation and risk-carrying to Insurance companies which today are well-established both from the point of view of risk capitalization and also on operational maturity.

“We are all aware that lakhs of families in our country have to borrow or sell assets to receive indoor treatment in hospitals. Government is seriously concerned about such impoverishment of poor and vulnerable families,” said Jaitley.

This scheme may also dwarf the existing crop insurance scheme. Alice G Vaidyan, CMD, GIC Re said that the sum insured involved is 50 lakh crore.  She added that this has the potential to match, if not dwarf the crop segment which saw momentous growth during last two years.