India recently announced an ambitious plan called the National Health Protection Scheme (NHPS) to provide government-sponsored insurance to roughly 500 million people or nearly 40% of India’s population.


Under the scheme, 10 crore families will be provided Rs 5 lakh cover per family annually for treatment. The programme is being touted as the world’s largest health protection.


The scheme is a centrally sponsored scheme. The centre intends to bear 60% of the cost. Remaining 40% will be borne by the states.


This mega health scheme will replace Rashtriya Swasthya Bima Yojana. NHPS is dubbed to be the world’s largest government funded healthcare programme.




  • For India, the sheer scale of its programme magnifies its many challenges, including how to communicate the benefits of the plan, and how to encourage enrolment.
  • Health insurance is worthless without accessible healthcare facilities. This is a critical obstacle for NHPS (aka ‘Modicare’). Nearly half of Indian children live in villages without such services.
  • The scheme sounds more like a fantasy due to ambiguities in funding and the lack of infrastructure to support the initiative.
  • Infrastructure – India had merely about 1,800 proper functional hospitals in rural areas, according to the government’s rural health statistics for 2017.
  • There is a shortfall of “19% in sub-centres, 22% in Primary Health Centres (PHC) and 30% in terms of Community Health Centres (CHC)”.
  • Medical Personals – Even the best-performing States like Kerala and Tamil Nadu had 5.9% and 7.6% doctor vacancies in PHCs respectively. Notably, the same for was over 40% in states like West Bengal, Chhattisgarh and Jharkhand and was 63.6% in Bihar. About half the primary and community health centres in Rajasthan, Haryana and Bihar did not even have a staff nurse, which was 75% in Jharkhand.
  • The real challenge of creating the physical healthcare infrastructure on the ground, equip it, staff it, and run it remains very much intact.




(i) Making insurance easy to use:


  • Insurance that is difficult to use will not be used. Therefore, we need to streamline both the enrollment process and access to care once enrolled.
  • The number of forms people face to enrol in NHPS must be minimized. Aadhaar makes it easy to verify eligibility and enrol.
  • Once enrolled, access to care should be provided where people live. This is a challenge in rural India but can be addressed with innovative models. For example, In Karnataka, health camps organized by super specialty hospitals were successful in improving access to care.


(ii) Right targeting:


  • A programme financed by public money needs to conserve resources. Therefore, we should provide government sponsored insurance only to those who cannot afford insurance on their own.
  • In addition to targeting the poor, insurance should target health conditions where disease burden is high and effective interventions are available but underused.


(iii) Contracting with private hospitals and clinics:


  • Nearly 75% of out-patient department care and 55% of in-patient department care in India is exclusively from the private sector. Therefore, private hospitals and clinics need to be part of NHPS. We thus need to monitor them and create the right incentives for them.
  • Not all hospitals should be eligible for NHPS. Only hospitals that meet certain quality standards should be allowed to serve NHPS beneficiaries.


(iv) Using data to learn and evolve:


The NHPS will have access to health information of 500 million people. This is an unprecedented amount of data and if curated well, it can have far-reaching applications.


(v) Sound financing and a strong data infrastructure are also important.


Any financing scheme must be backed by a strong data backbone, without which claims can’t be tracked and paid, and without which the plan will ultimately fail.


India must leverage its IT prowess to get the data backbone right. With programmes of this scale, roll-outs matter.


With an estimated 7% of India’s population pushed into poverty each year due to medical expenditures, NHPS intends to provide an essential safety net for the poor.

The government can learn from the lessons of RSBY to get NHPS’s implementation right. The health of millions of Indians depends on it.


Leave a reply


We're not around right now. But you can send us an email and we'll get back to you, asap.



Log in with your credentials


Forgot your details?

Create Account