Panel proposes separate firm for health insurance

The Committee on Public Sector Undertakings has recommended a separate standalone company to focus specifically on health insurance. In its eighteenth report, which was issued in the Lok Sabha today, it was critical of the abysmally low penetration of health insurance and lack of coordination between various health insurance schemes. The Committee noted that only about 10 per cent of the country’s population is covered by government and commercial health schemes.

It has identified lack of awareness among people and lack of focus on this segment by insurance companies, particularly public sector insurers which are engrossed in other segments like fire, marine and engineering, as the primary reason for such a low level of penetration. The government responded to this point by noting that it had already accepted the Insurance Regulatory and Development Authority (IRDA) recommendation to amend the Insurance Act, 1938, for the provision of differential capital for a standalone health insurance company. Another problem referred to in the report is the lack of coordination between various ministries like Labour, Health and Family Welfare and Finance, which run the Employees’ State Insurance Scheme, the Central Government Health Scheme and other commercial health schemes. This lack of coordination has been cited as the main obstacle to the synergy much needed for health insurance promotion.

The committee has suggested the setting up of a mechanism for regular cross consultation and coordination among the various ministries and IRDA. It has also suggested a pilot health insurance scheme, involving the ministries of Health & Family Welfare and Finance, the IRDA and public sector insurers.

Responding to this, the government said that instructions had been given to all state governments to develop innovative health insurance products.