Use lotteries to fund health insurance
Amid a debate over the cost of ‘Modicare’ the expanded health insurance scheme proposed in the Union Budget, an idea for funding has come from an unexpected quarter.
A leading lottery distributor has suggested to the government that a streamlining of lotteries would ensure funds for the scheme.
Kamlesh Vijay, chief executive of the Sugal & Damani Group, quoted Kerala finance minister Thomas Isaac’s Budget speech for the coming year to build his case. Sugal & Damani are distributors for state lotteries and provide lottery operation technology to 17 jurisdictions across the globe.
In his Budget speech, Isaac said resource mobilisation for the state’s own Comprehensive Health Care Scheme would be through Kerala State Lotteries, with all the revenue the latter generates going for the scheme. “Henceforth, when you take a lottery, it will not be a mere test of luck. This will also be a contribution towards comprehensive health care,” Isaac had said.
In his letter, Vijay asked the prime minister to have a regulatory authority or a commissioner-type officer for orderly conduct of lotteries, on the lines of Britain’s state-franchised National Lottery.
Nine of India’s states allow lotteries — Maharashtra, Goa, West Bengal, Punjab, Kerala, Arunachal Pradesh, Mizoram, Sikkim and in the Bodoland area of Assam. States may decide to run lotteries or not but if the former, cannot prohibit other states from selling their lottery tickets. The new goods and services tax on lotteries is 12 per cent on those run within a state but 28 per cent if bought of another state. Sale of lottery tickets is projected to fetch ~100 billion to the exchequer in Kerala, in its Budget Estimates for 2018-19. Vijay estimates a ~350-500 bn annual possibility across the country.
In America, his letter added, lotteries garner nearly $19.1 bn for welfare schemes. In China, $6.7 bn is collected for sports and another $9.05 bn for welfare schemes. In Britain, a little over $4 bn is collected to fund sports. The government had announced a National Health Protection Scheme or Modicare for 100 million households or 500 million people. Critics say sufficient funds have not been provided and even the amount required for the scheme is not accurate.
In a proposal put up before the Expenditure Finance Committee, the Union Health Ministry and Niti Aayog have suggested that the total cost of Modicare would be around ~250 bn, including ~100 bn is to be borne by state governments, for 2018-19 and 2019-20. Niti Aayog had said this was based on “assumption”.
This amounts to an insurance premium of ~1,082 a family. At present in medical insurance, the rate of premium is ~5,000 or more for cover of ~500,000 per family.