Patients queue up outside a hospital in Kolkata. Photo: AFP / NurPhoto

India’s Narendra Modi-led government launched the ‘world’s largest’ health insurance system on Sunday, but garnered strong criticism for inadequacies within the scheme.

The ambitious program, dubbed “Modicare” by the government but officially named Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana or PMJAY, promises annual health coverage of Rs 500,000 (US$6,900) to more than 500 million poor and vulnerable people.

The PMJAY is one of the two components of Modi’s health care system, the second being the creation of 1,50,000 health and wellness centers across the country.

Speaking in Bihar state at the launch of the scheme, Prime Minister Narendra Modi said, “The number of people that will benefit from the scheme is around the same as the population of the European Union… or all of the population of the US, Canada and Mexico.”

Modi also said the scheme was not based on religious or caste systems. Beneficiaries covered by the scheme will be identified on the basis of the 2011 Socio-Economic Caste Survey (SECC), which identified more than 100 million poor and vulnerable families in 444 districts of 26 Indian states.

Modi also attacked the opposition at the scheme’s launch, accusing former governments of making promises to win votes and not doing anything to empower the poor. “They misunderstood the poor. They thought, ‘give the poor what they need as freebies’ [for votes]. This was their greatest mistake. There is no scale to measure the amount of self-esteem a poor man has,” he said.

Beneficiaries of the scheme will be reimbursed for beds, medicine and diagnostic charges two days before, during, and 15 days after hospitalization. “No one needs to register for the initiative. A health card will be provided to the beneficiaries… A toll-free number will be made available for people to find out more about the scheme,” Modi said.

“I hope the poor don’t have to visit hospitals but, if they do, the Ayushman cover will be at their service. The poor of my country must get all facilities that the rich enjoy,” he said.

Officials told The Indian Express, that PMJAY will cover around 1,350 treatment packages, and can be accessed by beneficiaries in all government and qualified private hospitals. The amount will be reimbursed to medical facilities after a patient is discharged. To access the scheme’s benefits, beneficiaries will need a letter from the Prime Minister and a valid ID document, to generate the “gold card” that would allow them to get admitted or referred to a relevant department for admission.

The program, which was first announced as part of the yearly budget presented by Finance Minister Arun Jaitley in February this year, is expected to cost US$1.6 billion annually, with the expenditures to be shared by the federal and state governments at a 60 to 40 ratio.

At the scheme’s launch, Prime Minister Modi pointed out how medical science journal Lancet had reported on the program. However, experts have voiced several criticisms against the project.

“Modicare does not extend to primary health care, which, we believe, is the weakest link in the provision of public health in India… The crucial point is that poorly delivered primary care inevitably increases the burden on health and finance at the secondary and tertiary levels down the line,” IDFC Institute’s Rajiv Lall and Vivek Dehejia wrote in a column for the Mint.

Economist Jean Drèze, meanwhile, wrote in The Wire that the scheme “trivializes the goal of universal health care.” “Even by Narendra Modi’s high standards, the level of deception involved in the recent launch of the Pradhan Mantri Jan Arogya Yojana (PMJAY) is breath-taking,” Drèze wrote.

He went on to point out how the Rs 20 billion budget for the scheme was significantly low. “What would it actually take to provide this sort of insurance cover? If the beneficiaries spend just 1% of their Rs 500,000 quota in a year, on average, then the annual expenditure will come to Rs 50,000 crore (Rs 500 billion),” he wrote.

“This 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. There is absolutely no indication that the government is willing to spend that sort of money on PMJAY.”

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