NEW DELHI, (Reuters) – India’s universal health plan that aims to offer guaranteed benefits to a sixth of the world’s population will cost an estimated 1.6 trillion rupees ($26 billion) over the next four years, a senior health ministry official said.
Under the National Health Assurance Mission, Prime Minister Narendra Modi’s government would provide all citizens with free drugs and diagnostic treatment, as well as insurance cover to treat serious ailments.
The proposed plan would be rolled out in phases from April 2015 and will cover the entire population by March 2019, C.K. Mishra, an additional secretary at the health ministry, told Reuters. When the entire population is covered, it would cost an estimated $11.4 billion annually.
“If you want to deliver the service, that is what it will take,” Mishra said, disclosing for the first time an expert group’s cost estimates that will be considered by the finance ministry for inclusion in the government’s spending plans.
Healthcare experts caution that it could take decades before India’s 1.2 billion people are adequately covered and that the costs of provision could face significant upward pressure.
If approved, India would need to drastically raise its healthcare spending. In the current financial year, the federal budget allocated about $5 billion to healthcare.
“We are not in a position to implement it across the regions, states (right now). It’s impossible. So we are choosing number of districts each year,” said Mishra.
Despite rapid economic growth in the last 20 years, the Indian government spends only about 1 percent of gross domestic product on healthcare. That compares to 3 percent in China and 8.3 percent in the United States.
More newborns die in India than in poorer neighbours such as Bangladesh, and preventable illnesses such as diarrhoea kill more than a million children every year.
Government hospitals are overcrowded and lack resources to meet the growing demand, while access to basic health services in rural areas and smaller towns remains poor.
