Such a scheme is clearly urgently needed in India. Although India’s national health indicators are improving, unsatisfactory infant and child anthropometric indicators (such as low weight and height measurements) and the health outcomes of expectant and new mothers remain two long-standing areas of concern.
A third and rapidly emerging area of concern is the rising incidence of non-communicable diseases (NCDs) in India. In January 2015 it was reported that roughly 5.8 million Indians die every year from heart and lung diseases, stroke, cancer or diabetes. Put another way, one in four Indians is at risk of dying from an NCD before they reach the age of 70.
The Indian government has so far responded proactively to the problem of NCDs. It was the first country to put into practice the World Health Organization’s Global Action Plan for the Prevention and Control of NCDs 2013–2020. To control the spread of NCDs, India is targeting the greatest risk factors: unhealthy diets, physical inactivity, and tobacco and alcohol use. It is also reducing indoor air pollution (another major contributor to NCDs) through a rapid expansion of the Ujjawala program, which connects LPG gas to poor households that would otherwise use firewood or coal to cook.
The size of India’s NCD problem is deeply concerning given the country’s lack of subsidised health care. On average, 67 per cent of health care costs are privately borne in India. Each year hundreds of thousands of Indian households sell their assets in order to meet these costs. Not surprisingly, then, the burden of health care has been identified as one of the major causes of transient poverty in India. It is estimated that as many as 60 million people are forced into poverty each year due to health care costs.
The World Bank estimates that in 2003–04 only 25 per cent of Indian households had access to private health insurance. India’s own Insurance Regulatory and Development Authority estimates that by 2014 that number had gone down to 17 per cent.
Against this background, there can be no doubt that something like the Ayushman Bharat program is needed. But there are concerns about the program’s viability and whether the government can afford to fund it.
The scheme aims to reach the poorest 40 per cent of the population. The NITI Aayog think tank has computed the annual premium per household to be Rs 1000–1200 (US$15–US$18).
To pay these premiums, the budget allocated Rs 12 crore (US$180 million) to the scheme, with some of the additional costs to be picked up by state governments. The budget’s 1 per cent increase in the education cess (an extra levy on top of income taxes) alongside the government’s buoyant tax revenues — the result of widespread tax reform in india last year — should keep the program adequately funded.
Recent changes to state funding should mean that local governments find it viable to operate the proposed scheme. The states’ share of total tax revenue was increased from 32 per cent to 42 per cent in 2015 during India’s 14th Finance Commission. The central government has also augmented state revenues through other means, such as by selling rights to work with natural resources (like coal) to the states in which these resources are located.
It is not only economic concerns that could hinder the roll out of the Ayushman Bharat program. Politics too has its role to play. States like Karnataka and West Bengal that are governed by parties opposed to the ruling Bharatiya Janata Party appear reluctant to implement the program.
Another aspect of the scheme is the conversion of India’s 150,000 sub-centres (community outposts of the primary health care system) into so-called ‘health and wellness’ centres. These centres will offer an expanded set of services, including maternal and child health services, mental health services, vaccinations, and screenings for hypertension, diabetes and some cancers. An additional Rs 600 crore (US$92 million) was allocated in the budget to provide nutritional supplements to tuberculosis patients through the sub-centres.
The sub-centres, which at present cater to a population of about 5000 people, are each manned by two paramedical staff. There will clearly need to be an expansion of staff numbers in order to provide the full set of proposed services.
The Ayushman Bharat program is driven by two aims: to strengthen primary health care and to offer financial protection to Indian citizens from catastrophic medical expenditures. If the program can be successfully implemented, it will be an important first step towards institutionalising a culture of health insurance in the country and setting India on a course to universal health care.
Raghbendra Jha is Professor of Economics at the Crawford School of Public Policy, The Australian National Univeristy.