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Ayushman Bharat: Insurance companies fail to get govt’s health cover pie

Prime Minister Narendra Modi unveiled the scheme on Wednesday which would be offering Rs 5 lakh health cover to the poor and vulnerable families in the country for free.

Written by George Mathew | Mumbai |
Updated: August 16, 2018 12:12:41 am
business news, Insurance companies, Insurance sector, Ayushman Bharat, National Health Protection Mission, NHPM scheme, health insurance, indian express Most state govts bypassing insurers and forming trusts to execute the mission.

Insurance companies have failed to get any significant share of the Ayushman Bharat-National Health Protection Mission (AB-NHPM), the ambitious health insurance plan of the government, with most state governments bypassing insurers and forming trusts to execute the mission. Prime Minister Narendra Modi unveiled the scheme on Wednesday which would be offering Rs 5 lakh health cover to the poor and vulnerable families in the country for free.

Insurance companies are disappointed over the way bidding and the model being selected by various states for the scheme which envisages a premium outlay of over Rs 10,000 crore in the first year. “It is now clear NHPM, which was expected to be a big business for the domestic general insurance industry, is turning out to be a damp squib for them as governments are preferring the trust model,’’ said the senior official of an insurance company.

According to sources, of the 26 states which signed memorandums of understanding (MoUs) with the government to participate in the scheme, only 4 states — Jharkhand, Nagaland, Manipur and West Bengal — have the normal insurance model. In the current scheme of things, in a trust-based model, each individual state will form its own trust to manage the scheme and claims will be disbursed from a corpus created from Central and state government contributions at a ratio of 60:40. The claims will be settled through the help Third Party Administrators (TPAs). In the pure insurance model, insurance companies handle the entire cover including claims while hybrid is a mix of both insurance and trust models. Gujarat and Chhattisgarh have opted for the hybrid model — a mix of Trust and pure insurance models — after completing the competitive bidding. Earlier, Nagaland had opted for the hybrid model. Uttar Pradesh, the largest state, and some smaller states like Uttarakhand, Himachal Pradesh and Tripura have decided to opt for a Trust model instead of the insurance model.

Oriental Insurance Company (OIC) has successfully bid for the state of Gujarat at Rs 361 for providing cover up to Rs 50,000 per family. Similarly, stand-alone health insurance company, Religare Health Insurance bagged the mandate from the state of Chhattisgarh by offering a rate of Rs 1,100 for providing a cover up to Rs 50,000 per family. Meanwhile, Debasish Panda, Additional Secretary, Insurance, Ministry of Finance, held a meeting with the general managers of all the four state-owned general insurance companies (New India Assurance, OIC, National Insurance Company and United India Insurance) in New Delhi on July 30 to ascertain their views on the tender document for the NHPM.

In March 2018, the Union Cabinet approved the organisational architecture of the AB-NHPM that will provide health insurance to 10.74 crore families, and the continuation of the National Health Mission till March 31, 2020, with budgetary support of Rs 85,217 crore. While the NHPM was announced in the Union Budget this year and aims to provide Rs 5 lakh annual health cover, the NHM was the flagship UPA government programme and will be the principal vehicle for universal health coverage.

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