State governments may have to shell out approximately Rs 4,330 crore annually for the rollout of the ambitious National Health Protection Scheme (NHPS) for 10 crore households announced in the Budget, according to preliminary calculations undertaken by the government. These calculations, arrived at after informal discussions with actuaries, have pegged the premium at Rs 1,082 per family per year for each health cover of Rs 5 lakh. Of this, Rs 433 has been earmarked as the state share of the premium with the balance to be paid by the Centre.
In this context, sources said, these estimates are based on the assumption that “entire 10 crore families will be covered in one go”.
Going by this state share, the financial burden on states for 10 crore families will be to the tune of Rs 4,330 crore.
The Union Health Ministry and Niti Aayog have already started the process of consultation with states. E-mails have gone out and video-conferencing with individual states have commenced.
Sources said these NHPS calculations are based on data from different health protection schemes being run by state governments as well as the Central government’s experience in funding the Rashtriya Swasthya Bima Yojana (RSBY) that provides a modest Rs 30,000 health cover to poor families.
The number of beneficiaries currently registered under RSBY is approximately 3.8 crore and the government pays a premium of Rs 500 per family.
RSBY is mainly aimed at the below poverty line (BPL) population, specifically migrant labourers. In 2015, the Centre spent Rs 670 crore on RSBY, in 2016 that amount came down to Rs 450 crore. For NHPS, the government envisages that coverage based on socio-economic caste census (SECC) data so that families with “deprivations” rather than just low income are covered.
As against an average family size of 3.45 under RSBY, the calculations have assumed a family size of four for the proposed NHPS. Also, as against approximately 1.4 per cent utilization rate for RSBY, in NHPS calculations, the government has factored in a utilization rate between 1.8 per cent to 2.3 percent.
However, sources said, the calculations aren’t etched in stone. Even state health coverage programmes used as models to arrive at Rs 1082-premium are dynamic programmes. For example, in the Rajasthan government’s programme which provides a per family health cover of Rs 3.30 lakh, the state paid a premium of Rs 500 per year until 2016-17 but this year it has been revised to around Rs 1200.
While the premium will be a function of the mode of implementation of the scheme — whether it is through insurance companies or a trust model — there are many other factors that will influence the premium and finally determine the state’s burden.
Said a senior health ministry official: “Insurance companies will quote a premium based on expected user base and the availability of health facilities in the vicinity. In areas where hospitals are far the quote will automatically be lower. If a certain area is serviced only by government hospitals, that would again affect calculations.”
Also, given that these calculations are based on 10 crore families being covered at the same time, premium figures may change if the rollout is staggered.