India's national health insurance scheme embraces trusts

Out of the 26 states, an overwhelming 20 are opting for trusts.

India’s national health insurance scheme, Ayushman Bharat, is fast leaving the country’s insurers out of the picture as state governments are increasingly opting for trusts over insurance models.

Launching on September, Ayushman Barat is expected to reach half a billion Indian citizens.

State governments have two options to operationalise the scheme including a normal insurance model which would appoint an insurance company to handle claims or a trust model where each state sets up a trust and disburses health payments and reimbursements.

In the trust model, the fund involves a 60% contribution from the central government, with 40% coming from the state’s coffers.

With guarantee of government funding, it comes as no surprise that out of the 26 states which have signed memorandums of understanding (MoU) for the scheme, only four - West Bengal, Jharkhand, Manipur and Nagaland - have opted for the insurance model, whilst an overwhelming 20 have chosen to set up trusts, according a report in the Indian Express.

Two other states, Gujarat and Chhattisgarh, have chosen a hybrid approach that combines both models.

Business Insider adds that the trust model could overcome some of the hurdles of the previous national health insurance scheme including arrears, low bids and failure to honour bids but that it all depends on the ability of state governments to process claims and disburse payments.

Photo from AKS.9955 - Own work, CC BY-SA 4.0