Fixed bill limits may make Rs 5 lakh health cover affordable

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Mumbai: The insurance industry is confident that the cost of providing the Rs 5-lakh cover under the National Health Protection Scheme (NHPS) can be brought down to a fraction of the current figure for providing a similar cover under private mediclaim, which ranges from Rs 13,000 to Rs 20,000 for a family of five.

“Unlike the standard mediclaim, which is an urban phenomenon, a big chunk of the people covered under the NHPS are living in remote districts. The healthcare facilities are largely trust, missionary and district hospitals where the cost is significantly lower,” said Apollo Munich Health Insurance CEO Antony Jacob. “My guess is the cost of the scheme will be anywhere between Rs 10,000 crore and Rs 50,000 crore,” he added.

According to Jacob, the government will have defined limits for defined procedures. “It has been done under the Central Government Health Scheme and the Rashtriya Swasthya Bima Yojana (RSBY). I have no doubt that there will be defined limits with NHPS,” he said. But the real challenge would be in making available healthcare facilities in remote areas, he said.

Fixed bill limits may make Rs 5 lakh health cover affordable

Sources say that the government is looking at a budget of around Rs 1,500 per family. The Centre also plans to get state governments to be part of the scheme by merging what they spend on health insurance or health assurance schemes with the NHPS. At present, states are evenly divided between the insurance and assurance models. While Maharashtra and Tamil Nadu are using the insurance model, Andhra Pradesh, Telangana, Karnataka and Gujarat are using the assurance model. Under the assurance model, instead of paying premium to an insurance company, the government manages the scheme though a third-party administrator (TPA). According to TPAs who facilitate cashless settlement of health claims, for insurance companies the RSBY scheme — which provides a cover of up to Rs 30,000 — can break even at a family premium of Rs 300-400. State governments have been providing insurance cover of up to Rs 1.5 lakh with a premium of Rs 700 per family. The head of a TPA company said, “It would be possible to design a Rs 5-lakh cover with a Rs 1,500 premium. The key rider is that unlike private mediclaim, which covers everything, here the spending in tertiary hospitals will be limited to defined procedures with defined package costs.”

Insurers say that the premium hospitals in metros have not agreed to the rates for procedures prescribed under RSBY and state government schemes. There are large private hospitals who have agreed to do major surgeries at a fraction of the cost charged to private hospitals.

For instance, under the Maharashtra government’s health scheme — Mahatma Jyotiba Phule Jan Arogya Yojana — the state government had negotiated with providers of stents for coronary angioplasty at Rs 23,000 several years before the central government capped prices. Insurers expect that the cost of on-boarding to the NHPS will be kept low by using Aadhaar for enrolment coupled with information on family details from the public distribution system (PDS).

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