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February 12, 2025
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The Union Budget is a big financial event in India. Each year, the finance minister of the nation sets the national priorities and also the plan to fund them. The 2018 budget came in as a shocker for most people in India. The middle class was hoping for a significant tax reduction. However, there was no reduction in taxes. Instead, the taxes were increased to some extent.
On the other hand, India has announced the most ambitious health care scheme known to the world. It is colloquially being called Modicare because it is being introduced under the leadership of Prime Minister Narendra Modi. This scheme is likely to provide insurance to 100 million families, i.e., about 500 million individuals. The insurance provided will be to the tune of Rs.5 lakhs per family.
Critics are not very upbeat about Modicare. The scheme has started facing criticisms from various people even before any changes have been implemented. In this article, we will understand the various shortcomings of the proposed Modicare scheme.
Obamacare provided a universal health benefit to every American regardless of their economic status. Even the middle class was covered under Obamacare.
On the other hand, Modicare specifically excludes the middle class. The plan is meant to only fund the lower class.
The irony is that middle class is expected to pay the entire bill. Income tax revenues in India are largely generated by the middle class. However, they will not receive any benefits. Hence, it can be said that Modicare is a giant transfer of wealth scheme. It taxes the middle class to pay for the lower classes in order to achieve political gain.
In 2010, President Obama was of the opinion that providing healthcare to entire nation would cost the US government close to $940 million over a ten year period. However, within two years, the estimates were revised to $1100 billion. This gives an idea about the amount of expenditure required to sustain such a program.
If we assume that the cost of providing healthcare in India is one-tenth as compared to the United States, the government is still woefully short of money. Hence, it seems to be only a political decision with little economic or financial backing.
Also, the hospitals that are being built in India are only in Tier-1 and Tier-2 cities. There are very limited healthcare facilities that are provided in smaller cities. It is for this reason that the government is likely to face problems in implementing this problem. They will face problems such as availability of healthcare professionals, distribution of medicines, etc.
Mexico has already tried to implement a similar healthcare program. They have also faced the same difficulties since a majority of their population resides in rural areas whereas the majority of the healthcare infrastructure is in urban areas.
On the other hand, if the insurance company is paying, people stop comparing costs or even thinking about them. This is the reason why an increase in insurance coverage almost inevitably leads to an increase in healthcare costs. The United States has suffered from these increasing healthcare costs.
Most Americans who do not have insurance are simply not able to afford healthcare. They often have to fly to other countries like India in order to obtain cost-effective healthcare.
To sum it up, Modicare is a political program. The sole objective of the program is to garner political benefits for the ruling party.
The program is neither morally correct nor economically feasible. It is a forceful redistribution of wealth from the middle class to the poor. The middle class now have to pay their own insurance premium as well as that of the people below poverty line.
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