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Modicare: India plans free healthcare for 500 million

In India, they're already calling it ...

Posted: Feb. 1, 2018 11:52 AM
Updated: Feb. 1, 2018 6:08 PM

In India, they're already calling it "Modicare."

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Prime Minister Narendra Modi's latest blockbuster policy initiative is an ambitious plan to give hundreds of millions of people greater access to hospitals.

The government said Thursday it plans to cover hospital treatment costs of up to 500,000 rupees ($7,800) per year for 100 million "poor and vulnerable" families. That's more than 15 times the amount poor families in India can currently claim from the government.

Finance Minister Arun Jaitley estimated that around 500 million people will benefit from the program.

If the program is fully taken up, it would cost close to $780 billion, a huge sum for India's $2.4 trillion economy.

"India cannot realize its demographic dividend without its citizens being healthy," Jaitley said, referring to the country's large young population. "The government is steadily but surely progressing towards the goal of universal health coverage," he added, during a speech presenting his annual budget.

Jaitley said "adequate funds will be provided for smooth implementation" of the plan, but did not elaborate. Finance ministry officials did not respond to requests for comment.

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Access to healthcare is a major problem in India. Public hospitals are few in number and often underfunded and understaffed.

India has just over 1 million registered doctors and fewer than 15,000 state hospitals for its 1.3 billion people, according to government data released last year.

Total spending on healthcare in India averaged $267 per person in 2014 -- the latest year for which data is available -- compared to $9,403 in the United States, $3,377 in Britain and $731 in China, according to the World Bank.

Many Indians have no choice but to use private hospitals, where treatment is unaffordable for someone earning the average annual wage of less than $2,000.

That forces many to go deep into debt or sell their valuables and other assets to pay for treatment.

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The government is already trying to bring healthcare closer to rural Indians by establishing 150,000 "health and wellness centers," a separate program to which Jaitley allocated around $190 million in the budget.

"These are significant steps towards universal health coverage," Dr. Poonam Khetrapal Singh, regional director for South-East Asia at the World Health Organization, told CNNMoney.

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