The National Health Protection Scheme (NHPS), the insurance scheme with a ₹5 lakh-cover each for ten crore poor families announced in Budget 2018-19, will require an annual funding of ₹10,000 crore, the NITI Aayog has estimated.

The Centre’s share will be 60 per cent, about ₹6,000 crore, while the rest will come from the States. The beneficiaries will not have to pay anything.

“The calculations have been made with an estimated premium payment of ₹1,000 -1,200 per family,” Vinod Kumar Paul, Member, NITI Aayog, said at a press conference on Friday.

At a separate press conference, Health Minister JP Nadda said that States would be given the option of subsuming their own schemes with the NHPS or to continue running their own.

States will also have to decide whether to run the NHPS in Trust mode, where all modalities are taken care of by the Trust, or the insurance company mode, where the company that wins a bid is in charge, as per NITI Aayog.

The Health Minister could not give any estimate about when the scheme would be implemented, and merely said that things would happen “very soon’’. However, the NITI Aayog team had an estimated timeline to share.

As per the schedule, the scheme will get Cabinet approval by March and stakeholder consultations will happen in the same month. Data preparation, preparation of guidelines and revision of package rates will happen in April. State preparation and work on tenders will happen in July.

Once the NHPS is implemented, the Rashtriya Swasthya Bima Yojana, which is the Centre’s existing health insurance scheme with an insurance cover of ₹30,000, will come to an end, the officials said.

On the availability of funds for the scheme, Niti Aayog CEO Amitabh Kant pointed out that “the provision of ₹2,000 crore plus the amount generated by imposition of the additional health and education cess will take adequate care.”

In the first year of the scheme’s implementation, the Centre hopes to cover 50-55 per cent of the eligible population, Alok Kumar from NITI Aayog said. “It would cost the Centre approximately ₹3,000 crore in first year,” he said.

The 1 per cent increase in cess will mop up additional resource of ₹11,000 crore, which will be used in the revised estimate state to supplement the health budget depending upon the implementation speed, according to NITI Aayog.