Kerala

Health insurance scheme in dire straits

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Delay in paying premium amount has brought KASP to a halt

Administrative mismanagement is threatening to derail Karunya Arogya Suraksha Paddhati (KASP), the State’s health insurance scheme that was launched in April in alignment with Centre’s Ayushman Bharat (AB).

The government’s failure to abide by the conditions in the contract with the insurance company and the delay in paying the premium amount have brought the scheme to a halt last week.

Private hospitals had declared that they would not be able to provide free treatment to KASP cardholders any longer as they had huge pending claims with the insurance company, which in turn said that it was forced to stop settling claims because the government was yet to pay them the premium.

Now that the government is trying to pay at least part of the premium amount and keep the scheme running, surreptitious moves at the top to shift KASP from the current insurance mode to the assurance/trust mode could be a recipe for disaster, experts say.

Violation of contract

When the State shifted from its comprehensive health insurance scheme RSBY-CHIS to KASP-AB, the government did not set up a separate State Health Agency (SHA) to run the scheme as it would require huge investment.

Instead, the existing nodal agency, Comprehensive Health Insurance Agency-Kerala (CHIAK), was re-designated as the SHA, as was done by other States. In May, the government also appointed a Special Officer, KASP.

However, this dual control seems to have done KASP in.

“CHIAK has always met RSBY premium payment schedule meticulously. But KASP’s finance side is now handled by the government directly. We should have paid ₹622 crore premium to the insurance company by now. But not a dime was paid, till the insurance company pointed out that the claims had crossed ₹330 crore. Though ₹102 crore was finally released, the payment was unnecessarily held back for two weeks, threatening the scheme’s run,” Health Department sources said.

When the government is bound by contract to pay premium amount on a schedule, it is pointless to shift the blame on the insurance company. With claims having crossed ₹330 crore, the government has so far paid only ₹160 crore (₹102 crore plus some Central share), that too under duress. The KASP would have already been wound up if it was not run in an insurance mode, it is pointed out.

Which is why, the proposal to restructure KASP in trust/assurance mode is ringing alarm bells for experts.

Trust/assurance mode

“The KASP was never conceived to be run in trust/assurance mode. Given the high claims rate in the State, the government will never be able to keep up its monetary commitments to hospitals. In the insurance mode, the government only pays the premium while the insurance company runs the scheme,” a senior health finance expert said.

It would be a disaster to set aside a well-functioning machinery and to launch a new experiment, especially when the health insurance scheme is of mammoth proportions.

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Printable version | Dec 10, 2019 4:54:59 AM | https://www.thehindu.com/news/national/kerala/health-insurance-scheme-in-dire-straits/article30069593.ece

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