To manage insurance for all, Niti Aayog plans new authority, not Health Ministry

Written by PaperDabba

The proposal will need to be cleared by the Union Cabinet and if accepted, sources said.

The NITI Aayog has proposed the formation of a National Health Authority to administer the Pradhan Mantri Jan Arogya Yojana (PMJAY) and will be chaired by the Health Minister with the Aayog as its administrative body, it is learnt.

The proposal will need to be cleared by the Union Cabinet and if accepted, sources said, will mean that the Union Health Ministry will have little say in the NDA government’s flagship health scheme. The NHA, for all practical purposes, will report directly to the Prime Minister’s office and will stay at “arm’s length” from the Union Health Ministry.

Envisioned as an autonomous body, the NHA, according to officials, could initially be formed by an executive order as with the Unique Identification Authority of India (UIDAI) but will eventually need statutory backing.

But with health and public health being state subjects, two or more state legislatures will need to pass resolutions before Parliament enacts a law for the constitution of the NHA. Senior officials at the Health Ministry, NITI Aayog and the National Health Agency refused to comment on the proposal.



Why separate body may help

Globally, state health insurance programmes and price models are under a system that bypasses the national health ministry. In India, there are concerns that since PMJAY only caters to around 40% of the population, setting the price for 50 crore people could artificially inflate health costs for the remaining 80 crore. Hence, the argument for a distinct authority.

The PMJAY is the most ambitious social sector scheme of the NDA government. Launched on September 23 by Prime Minister Narendra Modi, the scheme entitles 10.74 crore families to an annual health cover of Rs 5 lakh. A part of the overarching Ayushman Bharat scheme, PMJAY is currently administered by the National Health Agency which is a registered society under the Health Ministry. While the Health Ministry is not responsible for the day to day running of the scheme, it does have a say in policy matters. For example, the package rates were decided by the Directorate General of Health Services.

An authority with statutory backing will also have penal powers and can issue orders to its state counterparts rather than the “advisories” that the National Health Agency currently issues to the state health agencies.

Penal powers will also mean that the NHA can act against errant hospitals. Currently, even to de-empanelling a hospital violating norms, the agency has to go via the Health Ministry and the only recourse left is to file an FIR.

The NHA, sources said, will also have full say over the package rates and the mandate to negotiate with the private sector for the strategic purchasing of services. There are, however, concerns in some sections of the government on the NHA’s powers to decide package rates.

Given that the PMJAY currently caters to 50 crore people, there are apprehensions that with government buying services for one section of the population, health expenses for the other 80 crore could get artificially inflated.

A chain of command for a national health insurance programme that is independent of the Health Ministry is a common practice internationally. In China, for example, the State Medical Insurance Administration reports directly to the Politbureau. It also has full say over the prices of medical services. Medicaid in the US too has say over prices as does the Universal Coverage Scheme in Thailand.

According to a source: “Such a structure is important because currently, every fresh proposal that the Agency moves for the minister’s approval has to traverse the entire hierarchy of the Ministry from the level of an undersecretary before it reaches the minister. Valuable time is lost in all this and often the proposal does not even make it. That is not good for a scheme of this nature”.

Asked how a state subject could be governed centrally in the way that NHA is envisaged to do, a senior government functionary said: “Isn’t the Medical Council of India doing exactly that?”

The NITI Aayog proposal also envisages the formation of an advisory board. The current board of the NHA has the Health Secretary and member (health) NITI Aayog as chairpersons. In the proposed setup, the Health Ministry will not be represented.


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