Cashless scheme makes insurance firms cash-rich

Vishav Bharti

Tribune News Service

Chandigarh, May 21

The idea of introducing the cashless health insurance scheme seems to have worked out more for the insurance companies than the poor.

As per information obtained under the RTI Act, the government paid a premium of Rs10.8 crore to two insurance companies under Bhagat Puran Singh Sehat Bima Yojana during 2014-15. However, beneficiaries claimed just Rs4.31 crore in the same period.

Under the scheme, the beneficiaries (blue card holders, construction workers etc.) are eligible for cashless treatment up to Rs50,000 at 211 private and 192 government hospitals plus an insurance cover of Rs5 lakh in case of accidental death or disability of the head of the family.

There were a total of 15.36 lakh blue card holder families in the state and the government registered 4.82 lakh families under this scheme. The government has now extended it to farmers and traders as well.

National Insurance Company (NIC) and United India Insurance Company (UIIC) were given the contract of 11 districts each. The government paid Rs220 for each family to the NIC and Rs227 to the UIIC for a year. A total of Rs10.8 crore was paid, but the companies received claims worth Rs4.37 crore.

The NIC was paid Rs4.94 crore and in return it settled claims worth Rs1.6 crore. Similarly, the UIIC got Rs5.86 crore and settled Rs2.71 crore worth of claims. Thus the insurance companies earned huge profits in the very first year (2014-15).

Under the Rashtrya Sehat Bima Yojana (RSBY), Reliance General Insurance Company was paid Rs4.13 crore premium, while it settled Rs3.35-crore claims. The scheme was implemented in the state in 2013. The government pays Rs238 per family as insurance premium to the company for the first year and Rs178 in the subsequent years. The government under this scheme pays 25 per cent share, and the remaining is contributed by the Centre. There are a total of 4.5 lakh BPL families in the state but only 2.32 lakh have been enrolled under the RSBY.

Health experts agree that the insurance model hardly works in favour of the beneficiaries. “The idea behind the insurance model was to protect people from catastrophic and out-of-pocket expenditure on health. But the systematic review of the National Sample Survey Organisation (NSSO) data revealed that the insurance model has failed to deliver on both aspects. As compare to that we have noticed that when the governments strengthen their own healthcare infrastructure and offered free facilities it was far more effective than the insurance schemes. The Janani Shishu Suraksha Karyakaram is such example that delivered when it came to child and maternal care,” said Dr Shankar Prinja, health economics expert, School of Public Health, PGIMER.

Ropar-based RTI activist Dinesh Chadha, who got this information under the RTI Act, said the government only paid premium to the companies and did nothing to spread awareness among the people regarding the schemes. “Instead of dolling out public money on insurance companies, the government should provide free treatment in state hospitals,” he said.