Centre to infuse life into health plans, protect 6 crore poor families too

THE insurance regulator has proposed a new consolidated health and life cover for over six crore poor families that will replace all existing insurance schemes sponsored by the central and state governments.      The Insurance Regulatory and Development Authority (Irda) plans to provide every poor family a life cover of Rs 1.5 lakh and a medical cover of Rs 1 lakh. An integrated cover will cost Rs 1,500 per annum, of which the Centre will bear half the premium and the rest will be shared equally by the states and the beneficiaries.      The proposal, estimated to cost Rs 12,000 crore, will cover most families in the unorganised sector and will replace all other central and state-sponsored insurance schemes. The insurer, who underwrites the policy, will also get a profit, making the scheme commercially viable. "We analysed the risk profile of poor families and families in the unorganised sector. A universal social insurance plan to provide insurance cover to eight crore families in the unorganised sector, which includes six crore families living below poverty line, could be a viable alternative to the plethora of schemes being run now," said J Hari Narayan, chairman of Irda. The proposal is being examined by the Thirteenth Finance Commission, which is a constitutional body that recommends formula for sharing revenues between the Centre and the states.      In this case, the Centre's share of the premium works out to around Rs 6,000 crore per annum, and about Rs 30 a month for a poor family.      Today, both the Centre and the states spend over Rs 4,000 crore on social insurance schemes with different claim ratios. It is believed that the insurance coverage and costs can be optimised with a well-designed scheme that integrates all the risk covers: health, partial and full disability, and death.      "This can be a major poverty alleviation programme as most families that move out of the below-poverty-line segment slip back when a major calamity strikes the family," said a senior Irda official who was involved in drafting the new plan.      Government-sponsored insurance schemes include the flagship Rashtriya Swasthya Bima Yojana (RSBY) that provides health insurance to poor households and Aam Aadmi Bima Yojana (AABY) that offers death and disability insurance to the unorganised sector.      Among the states, the Andhra Pradesh government offers one of the most popular free health insurance schemes called Rajiv Aarogyasri, which had been proposed by the late chief minister YS Rajasekara Reddy.      Irda has analysed efficacy of all domestic insurance schemes and has examined healthcare plans in various countries including UK's public health system, National Health Service. Universal healthcare systems differ across the world according to the extent of a government's involvement and the funding model. In the UK, Spain and Nordic countries, the government is involved in a big way in the commissioning or delivery of healthcare services. In the US, on the other hand, healthcare services are largely owned and operated by the private sector.  MAJOR RELIEF  What's in it for poor families?  Every poor family will get a life cover of Rs 1.5 lakh and a medical cover of Rs 1 lakh  This programme will help families avoid slipping back into poverty when a major calamity strikes them  A beneficiary will have to shell out just a fourth of the Rs 1,500 per annum premium for the cover. The Centre will pay half the premium and states will pay the rest  What's in it for governments?  The governments will get a viable alternative to the plethora of schemes being run now, which cost them Rs 4,000 cr a year  What's in it for insurers?  The insurer, who underwrites the policy, will also get a profit