Centre cuts scope of health insurance in Sindh, K-P

Move comes after two provinces declined to contribute share in the scheme

ISLAMABAD: Amid financial and administrative challenges in implementing the Prime Minister’s National Health Programme, the federal government on Tuesday made second revision of the flagship scheme, reducing its scope in the two provinces ruled by opposition parties.

The Central Development Working Party (CDWP) approved the second revision in the Rs8.2 billion project to pick the cost of primary health insurance in Khyber-Pakhtunkhwa and Sindh after the two provincial governments had declined to contribute their share in the scheme.

However, the federal government drastically reduced the coverage area in both the provinces, restricting to just 10% of the original plan in the PTI-ruled K-P and 35% in Sindh governed by the PPP.



In total, the CDWP cleared Rs112 billion worth of projects – including Rs89 billion worth of schemes referred to the Executive Committee of National Economic Council (Ecnec) for final approval.

Any scheme costing more than Rs3 billion has to be vetted again by Ecnec.

Despite having no allocation in the budget, Planning Minister Ahsan Iqbal, in his capacity as chairman of the CDWP also approved a link road to connect Sheikupura and Narowal with the under-construction Lahore-Sialkot Motorway project. The total cost of the project is Rs16 billion.



Prime Minister Nawaz Sharif launched the health scheme in 2015 aimed at reducing ‘out-of-pocket’ expenditure on health by venerable segments of society across the country.

Both Sindh and K-P had refused to pay for the primary health insurance, arguing that the seheme had been launched by the federal government so it should bear all the burden. However, the two provincial governments agreed to pay for the secondary healthcare projects.

After their refusal to shoulder the burden of the scheme, the prime minister had decided to pick the expenditures on primary health. In the same meeting, Sharif had expressed his concerns over delay in taking a decision regarding implementation of his flagship health scheme in two provinces ruled by the opposition parties.



However, the government has made drastic changes in the scope of the scheme in the two provinces. As against the original plan of providing health insurance to 1.478 million potential families in Sindh, the government on Tuesday reduced the scope to only 514,000 families or 35% of the original plan.

Similarly, in K-P, the federal government reduced the families’ number from 511,000 to just 53,000 families. Out of the total cost of Rs8.2 billion, the cost of priority treatment premium is Rs2.8 billion.

Due to a change in the scope, the overall cost on health insurance has been reduced from Rs8.8 billion to Rs6.3 billion, according to the revised design. Nevertheless, the operational cost of the scheme has significantly increased.



As against Rs361 million original allocations for human resource and other operational purposes, the government on Tuesday increased this cost to Rs1.9 billion.

During January’s meeting, the prime minister expressed concerns over the slow pace of progress on the scheme. He also desired to resolve the issue of pay package of the human resource hired to execute the scheme.

While chairing the CDWP meeting, the planning minister also asked the executing ministry to find out another mechanism to finance the health project, saying the government would give this year’s expenditures from the development budget.

The options of forming a Special Purpose Vehicle and making it part of the current budget of the Ministry of National Health Services were discussed in the meeting, according to officials.



Link road

The CDWP cleared a Rs16 billion scheme to link Narang Mandi to Narowal –- the home district of the planning minister -- with the Lahore-Sialkot Motorway. There is no allocation for this project in this years’ PSDP.

In August last year, the prime minister had performed the ground-breaking of the Lahore-Sialkot motorway project at a cost of Rs45.4 billion. Out of Rs45.4 billion, the federal government was providing a total assistance of Rs23 billion to the contractor -– the Frontier Works Organisation (FWO).

An amount of Rs18 billion has be given in the Viability Gap Funding (VGF) by the Ministry of Planning and Development by slashing funds for other projects while Rs5 billion will be provided by the Ministry of Finance as loan to the NHA.