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Govt likely to introduce a universal health scheme in Budget

The government is likely to announce a ‘universal health scheme’ in the Union Budget on February 1. This scheme, said sources, will cover individuals across income groups. Currently, the government-sponsored Rashtriya Swasthya Bima Yojana (RSBY) scheme covers those below the poverty line and offers coverage of up to Rs 30,000.

“This scheme will provide coverage not only to those families living below the poverty line, but also to the general masses. Since the country already has schemes for term insurance and personal accident accessible across income groups, this could be the next addition to it,” an official close to the development said.

While the Indian healthcare market is estimated at USD 70 billion (according to data from ICICI Lombard General Insurance), about 70 percent of healthcare infrastructure is confined to the top 20 cities.

Overall, with respect to premium growth, standalone private health insurance companies have pipped the non-life insurance companies. These insurers collected Rs 3615.27 crore as premium in the April-December period, showing a growth of 37 percent.

Medical inflation in the country is estimated to be in the range of 16-18 percent with not just costs increasing for treatment and room rent but also for medical devices like stents as well.

This scheme, which is aiming to be India’s answer to Obamacare, will aim to provide affordable healthcare with universal insurance to all individuals. It is not yet clear whether the government will subsidise the cost or prices will be decided through competitive bidding among the companies.

It is also being anticipated that this will be incorporated within a large health scheme for all citizens where both private and public hospitals will be asked to participate.

Once this scheme is implemented, RSBY will be subsumed into this and the coverage limit will also get higher. Direct debit and cashless payment of premiums is likely to be favoured in this scheme as well.

While it was earlier discussed that only the health ministry could be involved in this scheme, now officials said that both public sector and private sector insurers would be given an opportunity to participate. Further, some curbs on malpractices by hospitals like overcharging health insurance will also be implemented.

The health insurance industry has seen an average growth of 20-25 percent with more number of individuals buying products to reduce their out-of-pocket expenses for medical interventions.