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Ayushman Bharat scheme, otherwise known as Modicare under the National Health Mission was
launched by Prime Minister Narendra Modi government on 23 September 2018. The scheme was
as Pradhan Mantri Jan Arogya Yojana.
The aim of the scheme was to create a healthy and fit India. The program focuses on creating a
sound framework of wholistic healthcare where even the economically vulnerable population can
have easy access to quality medical care.
Components of Modicare
Under the scheme, the government has rolled out two different sub-schemes which are1. Health and Wellness Centre
The Union government has promised to establish around 1.5 lakh centers that will bridge the
existing gap in our health care system. The centers will offer comprehensive health care (including
non-communicable diseases and maternal and child health services). These centers will also provide
essential drugs and diagnostic services for free of cost.
2. National Health Protection Scheme
PMJAY scheme intends to cover over 10 crore poor and vulnerable families (approximately 50 crore
beneficiaries). It seeks to provide coverage up to Rs.5 lakh rupees per family per year for secondary
and tertiary care hospitalization.
Objectives of ModiCare (Ayushman Bharat Scheme)
1. To make secondary and tertiary healthcare completely cashless in nature.
2. To provide people with access to medical treatment without putting any pressure on their
3. To improve the status of health especially among the most vulnerable sections of society.
4. To promote the role of private players in the achievement of public health goals.
5. To improve the quality of life of citizens.
6. To expand the ambit of the national health framework and inculcate an integrated
approach of health-care.
7. To reduce the out-of-pocket expenditure on healthcare.
8. To provide insurance cover to a minimum of 40% of the country’s total population
9. To take the nation closer to the achievement of the Sustainable Development Goal of
Universal Health Coverage (SDG3: Good health and well-being).
10. To create a network of health centers where the focus is on early detection of diseases
and providing treatment service for the same.
Target Population of Modicare
In the rural areas, the names of beneficiaries have been prepared considering various socioeconomic deprivations such as lack of housing facilities, meager income, and other deprivations.
Going by this methodology, we arrive at the final list that translates into the following beneficiaries1.
Those living in scheduled caste and scheduled tribe households
Families with no male member aged between 16 to 59 years
Beggars and destitute
Families with no individuals aged between 16 and 59 years
Families having at least one physically challenged member and no able-bodied adult
Landless households who are making a living as casual manual laborers
Primitive tribal communities
Legally released bonded laborers
Families living in one-room makeshift houses
Families of Manual scavengers
The urban area list of beneficiaries of Ayushman Bharat has been drawn up on the basis of
occupation. Those people from the urban population who can avail the benefits under this
scheme are1.
Home-based artisans or handicraft workers, tailors
Domestic help
Mechanics, electricians, repair workers
Sanitation workers, gardeners, sweepers
Cobblers, hawkers and others providing services by working on streets or pavements
Plumbers, masons, construction workers, porters, welders, painters and security guards
Transport workers like drivers, conductors, helpers, cart or rickshaw pullers
Assistants, peons in small establishments, delivery boys, shopkeepers, and waiters
The individuals who will not be the part of beneficiaries list are1.
Those who own a two, three or four-wheeler or a motorized fishing boat
Those who own mechanized farming equipment
Those who have Kisan cards with a credit limit of Rs.50000
Those who are employed by the government
Those who are working in a government-managed non-agricultural enterprise
Those who are earning a monthly income above Rs.10000
Those who are owning refrigerators and landlines
8. Those who have a decent and solidly built houses
9. Those who own 5 acres or more of agricultural land
Provisions and Benefits of Modicare
A beneficiary covered under the scheme will be allowed to take cashless benefits from
any public/private empaneled hospitals across the nation.
Both pre- and post-hospitalization expenses are covered under the scheme.
It provides a boost to the concept of co-operative federalism by offering flexibility to
states to decide their mode of implementation.
Benefit cover has been increased to cover nearly 40% of the vulnerable population.
It covers almost all secondary and many tertiary hospitalization procedures.
The scheme will cover benefits up to Rs. 5 lakhs for each family with no restriction on
the family size.
It will help in reducing the incidence and impact of non-communicable diseases.
The scheme covers a variety of serious ailments and critical diseases. Few of those covered
under the scheme are
Prostate cancer
Coronary artery bypass grafting
Double valve replacement
Carotid angioplasty with stent
Pulmonary valve replacement
Skull base surgery
Laryngopharyngectomy with gastric pull-up
Anterior spine fixation
Tissue expander for disfigurement following burns
However, the scheme has the following Exceptions
Cosmetic related procedures
Fertility related procedures
Drug rehabilitation program
Organ transplants
Individual diagnostics (for evaluation)
Shortcomings of Modicare scheme.
1. Transfer of Wealth:
The biggest criticisms being leveled against Modicare is that it is not economically viable.
Many economic experts believe that this scheme has been created only to gain political
mileage. It is for this reason that the benefits are targeted towards a specific class of people
who become the majority of the vote bank. This is where Modicare is in sharp contrast to
Obamacare. Obamacare provided a universal health benefit to every American regardless of
their economic status. Even the middle class was covered under Obamacare. On the other
hand, Modicare specifically excludes the middle class. The plan is meant to only fund the
lower class. The irony is that middle class is expected to pay the entire bill. Income tax
revenues in India are largely generated by the middle class. However, they will not receive
any benefits. Hence, it can be said that Modicare is a giant transfer of wealth scheme. It taxes
the middle class to pay for the lower classes in order to achieve political gain.
2. Lack of Funding:
Another major problem with Modicare is the lack of funding that the government has in
place to fund a program of this magnitude. The Indian government has allocated 2 trillion
rupees towards this scheme. This amount is woefully inadequate given that 50 billion
individuals are going to be covered by this scheme. Hence, the government has budgeted
only Rs. 40 per individual per annum. Obviously, the health insurance premiums are not that
low. Hence, it is likely that the expenditure from this scheme will cause a drastic spike in the
fiscal deficit. Once again, the comparison with Obamacare provides some context. In 2010,
President Obama was of the opinion that providing healthcare to entire nation would cost
the US government close to $940 million over a ten years period. However, within two years,
the estimates were revised to $1100 billion. This gives an idea about the amount of
expenditure required to sustain such a program. If we assume that the cost of providing
healthcare in India is one-tenth as compared to the United States, the government is still
woefully short of money. Hence, it seems to be only a political decision with little economic
or financial backing.
3. Fragmented Healthcare System:
Modicare is likely to face another major challenge. The fact of the matter is that healthcare is
highly fragmented within the nation. The cost and quality of healthcare received vary widely
depending upon the location. Hence, it would be difficult for the government to keep a
check on whether the insurance claims they are paying out are genuine.
Also, the hospitals that are being built in India are only in Tier-1 and Tier-2 cities. There are
very limited healthcare facilities that are provided in smaller cities. It is for this reason that
the government is likely to face problems in implementing this problem. They will face
problems such as availability of healthcare professionals, distribution of medicines, etc.
Mexico has already tried to implement a similar healthcare program. They have also faced
the same difficulties since a majority of their population resides in rural areas whereas the
majority of the healthcare infrastructure is in urban areas.
4. Healthcare Inflation:
Healthcare inflation is closely linked to the percentage of the population that is insured.
When people pay from their pockets, they are very cognizant of the costs that they are
paying for different treatments. On the other hand, if the insurance company is paying,
people stop comparing costs or even thinking about them. This is the reason why an
increase in insurance coverage almost inevitably leads to an increase in healthcare costs. The
United States has suffered from these increasing healthcare costs. Most Americans who do
not have insurance are simply not able to afford healthcare. They often have to fly to other
countries like India in order to obtain cost-effective healthcare.
To sum it up, Modicare is a political program. The sole objective of the program is to garner
political benefits for the ruling party. The program is neither morally correct nor economically
feasible. It is a forceful redistribution of wealth from the middle class to the poor. The middle class
now have to pay their own insurance premium as well as that of the people below poverty line.
BRIEF (Silent Feature):
1. Ayushman Bharat – National Health Protection Mission will have a defined benefit cover of Rs. 5 lakh
per family per year.
Benefits of the scheme are portable across the country and a beneficiary covered under the scheme will be
allowed to take cashless benefits from any public/private empanelled hospitals across the country.
Ayushman Bharat – National Health Protection Mission will be an entitlement based scheme with
entitlement decided on the basis of deprivation criteria in the SECC database.
The beneficiaries can avail benefits in both public and empanelled private facilities.
To control costs, the payments for treatment will be done on package rate (to be defined by the
Government in advance) basis.
One of the core principles of Ayushman Bharat – National Health Protection Mission is to co-operative
federalism and flexibility to states.
For giving policy directions and fostering coordination between Centre and States, it is proposed to set up
Ayushman Bharat National Health Protection Mission Council (AB-NHPMC) at apex level Chaired by
Union Health and Family Welfare Minister.
States would need to have State Health Agency (SHA) to implement the scheme.
To ensure that the funds reach SHA on time, the transfer of funds from Central Government through
Ayushman Bharat – National Health Protection Mission to State Health Agencies may be done through
an escrow account directly.
In partnership with NITI Aayog, a robust, modular, scalable and interoperable IT platform will be made
operational which will entail a paperless, cashless
Merits of Scheme.
A Strong Network of 1.5 Lakhs Health and Wellness Centers across the Country would constitute
Foundation of India’s new Healthcare Systems.
It will cover more than 10 Crore Poor and Vulnerable Families of the Society.
The Support from Trained Nurses and Health Workers increase the Availability near Home in Rural
Vulnerable Sections of the Society would have access to Healthcare to almost all medical and Surgical
Conditions that can occur in Lifetime.
15. Package Rates decided by Government for Private Hospitals would help in keeping the cost low.
16. It will generate Employment Especially for Women would help in Economic Empowerment of Women.
1. Major Challenge would be Implementation and Governance of the Scheme.
2. The private hospitals are based on profitability motives and fixing rates of procedures would increase
chances of hospitals neglecting poor Patients. The Healthcare is a goal under SDG 2030 Goal-3 of
good health. The scheme would ensure proper healthcare facilities for most vulnerable sections of the
3. By preventive disease at early stage can make a change.For example, early detection of diabetes at the
age of 35 can avoid the kidney failure at age of 50.Also schemes exclude outpatient health care that is
responsible for 70% of health expenditure.
4. Budget allocation of 2000 crore scheme doesn’t serve the purpose.Amount is meager as compared to
scope of the scheme.
5. The schemes is far from universal health coverage as it exclude 80 crore (60%) of the population.