Ayushman Bharat: States still in wait-and-watch mode

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Even as Prime Minister Narendra Modi is likely to announce the launch of Ayushman Bharat - the state-sponsored health insurance scheme, in his Independence Day speech, states are still in a wait-and-watch mode on the implementation.

The scheme, called Ayushman Bharat-National Health Protection Scheme (AB-NHPS), will be provided to families who are below the poverty line and cannot afford to buy medical insurance. This will be a family floater policy.

While a majority of states will be taking the trust route for the health insurance programme that will offer Rs 5 lakh medical cover for 100 million individuals, not all tenders have been completed for the states opting for insurance route.

Sources told Moneycontrol there could be a grand launch in states like Gujarat and Haryana on August 15. Among insurance companies, Apollo Munich Health Insurance won the AB-NHPS tender for Nagaland at a premium Rs 444 per family.

Out of the 28 states that signed memorandum of understanding (MoUs) with the government to participate in the scheme, only 4 states -- Jharkhand, Nagaland, Manipur and West Bengal -- have stuck with the insurance model. Even among these, West Bengal will take a hybrid route wherein the services of insurance companies will be taken for a few districts while the rest will have the premiums (subsidy) coming into a pool managed by a trust.

What will the cover provide?

AB-NHPM will cover medical and hospitalisation expenses for almost all the secondary care and most of the tertiary care procedures. AB-NHPM has defined 1,350 medical packages covering surgery, medical and daycare treatments including medicines, diagnostics, and transport.

To ensure that nobody is left out (especially the girl child, women, children and elderly), there will be no cap on family size and age in the scheme. The scheme will be cashless and paperless at public hospitals and empanelled private hospitals. It is likely the beneficiaries will be offered a smart card for the process of claims.

The beneficiaries will not be required to pay any charges for the hospitalisation expenses. The benefit also includes pre and post-hospitalisation expenses. The scheme is an entitlement based, the beneficiary is decided on the basis of the family being figured in SECC database.

Who is eligible for the insurance cover?

Based on the socio-economic caste census of 2011, the insurance cover will be offered to eligible persons. The different categories in the rural area include families having only one room with kucha walls and kucha roof (temporary settlement), families having no adult member between age 16 to 59, female-headed households with no adult male member between age 16 to 59.

Apart from these, families with disabled member and no able-bodied adult member in the family, SC/ST households and landless households deriving a major part of their income from manual casual labour will be eligible. Further, households without shelter, destitute, living on alms, manual scavenger families, primitive tribal groups and legally released bonded labour will be covered under the scheme. For urban areas, 11 defined occupational categories are entitled under the scheme.

How it differs from the earlier health cover?

Insurance companies were the lead players in the Rashtriya Swasthya Bima Yojana (RBSY) wherein a majority of states floated tenders to select an insurer for the particular region. In this model, the insurance company offered a bidding price and the one who quoted the lowest was selected.

Only a few states like Andhra Pradesh had opted for the trust model which meant that a trust would be set up that would handle the premiums from the centre and state and also be responsible for the claims settlement.

RSBY had a cover of Rs 30,000 for which individuals had to pay Rs 30 as premium. Considering that medical inflation is at 18 percent, the medical cover was termed as grossly inadequate for the country.

However, under the Ayushman Bharat scheme that will be launched on August 15, a majority of states have opted for the trust model. Insurance companies who Moneycontrol spoke to, said the states will be unable to handle the high volumes.

What are the nagging issues?

Many states who have opted for the trust-based model are still trying to get systems in place. Many states are yet to hire people and train them to manage the claims, which is delaying the rollout process.

At least 8 big states are yet to sign MoUs with the Centre. Odisha, Telangana, and Delhi may give a miss altogether while the remaining states including Tamil Nadu, Karnataka, Kerala, and Punjab are in discussions and are expected to come on board.

Still, large private hospital chains have preferred to sit out from empanelment process citing low package rates. But Moneycontrol learns the government and large private hospitals are in discussions to sort out the issue of low package rates.