Centre, states need to work together to implement Modicare: Arun Jaitley


To effectively implement the government’s ambitious health insurance scheme, touted as ‘Modicare’, the central and state governments need to work together under federal institutions like the Goods and Services Tax (GST) Council, finance minister Arun Jaitley said on Friday.

Speaking at a post-budget event organized by Open magazine, Jaitley said there is no statutory mechanism at present like the GST Council wherein the centre and the states can coordinate when it comes to expenditure on health, agriculture and social sector, which fall in the concurrent list with both states and the centre having legislative powers over them.

The idea of coordinated action was first mooted by chief economic adviser in the finance ministry Arvind Subramanian in his latest Economic Survey, where he said that the GST Council shows that cooperative federalism is a “technology” for reforms in several other areas.

“Can there be a way or a mechanism where the centre’s spending is complemented by states? By coordinating the expenditure for healthcare, the centre and states can do a much better and bigger job,” he added.

The National Health Protection Scheme aims to offer health insurance up to Rs5 lakh per family per year, covering over 100 million vulnerable families, benefiting an estimated 500 million people. Both secondary and tertiary care hospitalization will be covered.

Jaitley said the scheme was originally envisaged in the NITI Aayog by its member Vinod Paul.

Prior to joining the NITI Aayog, Paul was head of the department of paediatrics at the All India Institute of Medical Sciences.

The finance minister said the initial idea was for a universal healthcare scheme but given the huge costs involved it was decided to start with 100 million families out of the total 250 million Indian families.

“It will be run either as a trust or an insurance model but not on a reimbursement model. The date of implementation will be sometime next financial year beginning 1 April. This will be entirely state-funded. I have already provided Rs2,000 crore for this,” he added.

Jaitley said the proposed mega merger of three general insurance companies to create one big insurance company, as announced in the budget, will be timely, especially as India is launching schemes such as crop insurance and the health insurance scheme.livemint