At present, no reinsurance support has been given under the scheme and discussions are still underway.
The Pradhan Mantri Jan Arogya Yojana (PM-JAY), which was implemented from September 2018, is touted as the most ambitious scheme of the Modi government.
Reinsurance under the scheme, however, has not been decided and is still under discussion.
Barring four states, all the others have opted for a trust model to implement the scheme. This means they will set up a trust to collect premiums and pay claims. Only have opted for the insurance model.
Being the first scheme that aims to provide health insurance to 50 million Indians, not having reinsurance support will mean that agencies that choose to implement this scheme could virtually go bankrupt in the event of the reserves getting exhausted from multiple claims.
Reinsurance refers to the risk cover taken by insurance companies as a protection against financial liabilities of large insured risks such as country-wide government schemes in the areas of health, crop and infrastructure projects, among others.
In the absence of an adequate reinsurance scheme, insurers are at the risk of facing an impact on their minimum capital requirement.
“We are in talks with the government to get clarity on who will be responsible for the reinsurance programme,” said a senior public sector insurance executive.
General Insurance Corporation of India is the sole reinsurer in the country and once given the mandate, it could be involved in providing risk covers. Considering the size of the scheme, it is likely that foreign reinsurers will also be involved in the scheme.
NITI Aayog has said that in just 50 days since its launch by the Prime Minister, about 2,00,000 beneficiaries have been treated in public and private hospitals under the Pradhan Mantri Jan Arogya Yojana.
Under the scheme, also referred to as Modicare, about 10 million families (50 million people) will get access to Rs 5 lakh worth of health insurance completely free of cost. This will include families from lower income groups that fall under the socio-economic caste census (SECC) data of 2011.Similar schemes funded by the government including the Fasal Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and the Pradhan Mantri Suraksha Bima Yojana, which have reinsurance support from both Indian and international companies.The Great Diwali Discount!
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