Sharply contesting Prime Minister Narendra Modi’s claim that the recently-launched public health insurance scheme, Pradhan Mantri Jan Arogya Yojana (PMJAY), dubbed Modicare, is the world’s largest, renowned development economist Jean Drèze notes, PMJAY is nowhere comparable to “China’s health care system, with its universal coverage”, pointing out, “In per-capita terms, public expenditure on health in China is about five times higher than in India.”
In fact, says Drèze, “Many countries have already achieved universal heath care (UHC), or something very close to it – not only rich countries (including all the OECD countries with the notable exception of the United States) but also many developing countries such as Brazil, Mexico, Sri Lanka and Thailand.”
Known to be a close associate of Nobel laureate Amartya Sen and is a visiting professor at the Department of Economics, Ranchi University, Drèze says in a commentary in a well-known news portal, the term “largest” presumably refers to the proposed population coverage of 50 crore or so, “but the wide coverage is achieved by reducing per-capita expenditure to a microscopic level.”
Noting that PMJAY is one of the two components of the Ayushman Bharat scheme, allocating just Rs 2,000 crore during fiscal 2018-19, Drèze says, this may appear to be double the previous year’s budget allocation of Rs 1,000 crore for Rashtriya Swasthya Bima Yojana, which PMJAY subsumes. However, it also suggests, “there is virtually no new money this year for PMJAY.”
Drèze says, “The government claims that PMJAY will provide a health insurance cover of Rs 5 lakh to 10 crore families (about 50 crore persons)”, wondering, “What would it actually take to provide this sort of insurance cover?”
According to Drèze, “If the beneficiaries spend just one per cent of their Rs 5 lakh quota in a year, on average, then the annual expenditure will come to Rs 50,000 crore. This is 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.”
Pointing out that “there is absolutely no indication that the government is willing to spend that sort of money on PMJAY”, Drèze says, while NITI Aayog experts “anticipate” that the annual PMJAY budget would rise to Rs 10,000 crore, even this is a “chickenfeed for the purpose of providing health insurance to 10 crore families. It comes to Rs 1,000 per family, or Rs 200 per person. For the whole year.”
He asks, “How would you feel if you were told you that your budget for health care this year is Rs 200?”, adding, “An illusion has been created that putting this money in an insurance premium has some sort of multiplier effect.”
Drèze explains, “Insurance can help to redistribute health expenditure towards those who need it most, but it cannot turn Rs 200 into more. If the government spends only Rs 200 per person on health insurance, that’s the amount of health care an average person gets, that too assuming that there are no transaction costs.”
As for another component of Ayusham Bharat, Drèze says, it is the creation of 1,50,000 “health and wellness centres”, with an allocation of Rs 1,200 crore in 2018-19. Pointing out that it comes to Rs 80,000 per centre, he says, “It is just a new coat of paint for the old primary health centres, which are being renamed for the occasion.
Pointing out that “there is absolutely no indication that the government is willing to spend that sort of money on PMJAY”, Drèze says, while NITI Aayog experts “anticipate” that the annual PMJAY budget would rise to Rs 10,000 crore, even this is a “chickenfeed for the purpose of providing health insurance to 10 crore families. It comes to Rs 1,000 per family, or Rs 200 per person. For the whole year.”
He asks, “How would you feel if you were told you that your budget for health care this year is Rs 200?”, adding, “An illusion has been created that putting this money in an insurance premium has some sort of multiplier effect.”
Drèze explains, “Insurance can help to redistribute health expenditure towards those who need it most, but it cannot turn Rs 200 into more. If the government spends only Rs 200 per person on health insurance, that’s the amount of health care an average person gets, that too assuming that there are no transaction costs.”
As for another component of Ayusham Bharat, Drèze says, it is the creation of 1,50,000 “health and wellness centres”, with an allocation of Rs 1,200 crore in 2018-19. Pointing out that it comes to Rs 80,000 per centre, he says, “It is just a new coat of paint for the old primary health centres, which are being renamed for the occasion.
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