The State government has laid the blame for the failure of Medisep, the health insurance programme for government employees and pensioners, at the door of Reliance General Insurance Company Ltd (RGIL) and washed its hands of any liability.
However, it was the government’s decision to go by the same package treatment rates as had been fixed under Karunya Arogya Suraksha Paddhati (KASP), for Medisep too, which has led to this fiasco, it is pointed out.
“The treatment package rates were not fixed by RGIL but by the costing committee which had been set up by the government. However, the government had been advised that as the target population covered was different from KASP and considering the cost of private hospital rooms/wards, the rates be revised suitably. However, it was the government’s decision that the hike cannot be more than 25% and that a rationalisation of treatment costs had to be brought in,” a senior official said.
The government did try in earnest to talk in detail to as many stakeholder hospitals directly as possible and persuade them to join in.
But the fate of Medisep had been sealed in May itself when the government failed to persuade its own premier health institutions — RCC, MCC and SCTIMST — to accept the treatment package rates under KASP, she pointed out.
“Medisep was to have been launched on June 1 initially. Till May, the talks with private sector hospitals were going on smoothly. The crisis in Medisep was precipitated by the stalemate over the RCC and SCTIMST’s refusal to implement KASP. Private hospitals’ argument was that if the treatment package rates are not acceptable to premier government hospitals, how can it be viable for private sector. Their argument was infallible and the collective campaign against the scheme worked,” she added.
The government also totally failed to comprehend the insurance market dynamics and the fact that many vested interests were at play, which would never want Medisep to take off as 11 lakh government employees and pensioners getting a single insurance cover would affect the market significantly.
Medisep offers a primary annual coverage of up to ₹two lakh and additional coverage of up to another ₹9 lakh for catastrophic illnesses.
When the Request for Proposal for the scheme was floated, the government had capped the annual premium amount that can be quoted at ₹3,600. RGIL, which quoted ₹2,999, won the tender.
All public sector insurance companies which had participated in the original tender had quoted annual premium in the range of ₹10,000 to ₹17,000.
Now that the government has decided to call for a new tender to float Medisep, the treatment package rates would have to be revised, which would mean that the annual premium amount as well as the employees’ monthly contribution (now fixed at ₹250) would also go up.
But these processes could be time-consuming and Medisep, the biggest and most comprehensive insurance scheme ever devised for State government employees and pensioners, which was finally launched two years after it had been announced, could get delayed indefinitely.
