India allocates $1.5 billion for 'Modicare' health insurance

[March 22, 2018] NEW DELHI (Reuters) - India has allocated $1.54 billion for its ambitious health program aimed at providing insurance cover for about half the population, the health minister said on Thursday, labeling it the largest such scheme in the world.

Prime Minister Narendra Modi's government, which has dubbed the scheme "Modicare", announced in February the program would provide 100 million families, or about 500 million poor people, with health cover of 500,000 rupees per year for treatment of serious ailments.

The federal budget had made an allocation of 20 billion rupees for the scheme for 2018-19, but officials had said more funds would be made available as the program was rolled out.

Health Ministry officials said the government has allocated 100 billion rupees ($1.54 billion) for the "National Health Protection Mission" for 2018/19 and 2019/20.

"It's a historic step and a bold decision. It will be the largest public funded health protection scheme in the world," Health Minister J.P. Nadda said at a news briefing.

The measures are Modi's latest attempt to reform a public health system that faces a shortage of hospitals and doctors. The government has also in recent years capped prices of critical drugs and medical devices and increased health funding.

Still, India spends only about 1 percent of its GDP on public health, among the world's lowest, and the health ministry estimates such funding leads to "catastrophic" expenses that push 7 percent of the population into poverty each year.

"This will give underprivileged families the financial support required when faced with illnesses requiring hospitalization," Nadda said.

(Reporting by Aditya Kalra; Editing by Sanjeev Miglani and Nick Macfie)

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