Healthy scheme

The LDF government launches a health insurance scheme for the below poverty line category.

in Thiruvananthapuram

HALF-HEARTEDLY, after months of discussions and negotiations, the Left Democratic Front (LDF) government in Kerala has launched a modified version of the Central governments Rashtriya Swasthya Bima Yojana (RSBY), the health insurance scheme primarily meant for families below the poverty line (BPL).

The Kerala version, called the Comprehensive Health Insurance Scheme (CHIS), was launched by Chief Minister V.S. Achuthanandan in Alappuzha on October 2. Just as the RSBY programme, the CHIS also offers a maximum annual medical insurance cover of Rs.30,000 to a family of five for a fee of Rs.30, if it is in the BPL category. However, the scope of the State scheme is much larger. It has sought to include at least 10 lakh more of the poor in its list of BPL members, over and above the 11.79 lakh people estimated to be absolutely poor as per the BPL norms of the Central government. In addition, the State scheme is open also to people above the poverty line (APL) if they are willing to pay the entire annual premium of Rs.506 for each family and an additional Rs.60 as the cost of the family smart card. All transactions at hospitals are to be cashless if they use the smart cards.

Despite going through the stipulated open tender process, the public-sector United India Insurance Company has won the rights to run the scheme in all the 14 districts. Thus, the Kerala government has effectively curtailed, in line with its policy, private insurance companies from operating the scheme at least in its initial year. It has also prescribed one of the lowest rates in the country for treatment under the CHIS and decided to allow to be included in it only those private hospitals that agree to the prescribed rates.

Moreover, the State government seeks to use the scheme as an opportunity to strengthen the public health care system by allowing government hospitals to utilise the premiums collected by them for their own development needs, in addition to the funds that are available under the National Rural Health Mission. The State scheme also offers bonus cash incentives to government hospital staff, including doctors, based on the quantum of premium collected by them.

Public health experts, however, say that the State scheme, which, no doubt, takes care of the ruling coalitions political concerns up to an extent, seeks to dodge questions about its long-term viability and possible impact on a deteriorating universal and free public health care system. No doubt, State Planning Board Vice-Chairman Prabhat Patnaik has been describing the insurance scheme as a distinctly sub-optimal way of providing health care to the people. And, Finance Minister T.M. Thomas Isaac told Frontline (see interview) that the scheme is an example of a government being forced to choose alternatives within the limitations.

Ideally, according to them, the LDF government would have preferred a comprehensive and free health care system for the BPL population instead of one supported by health care insurance, because in the latter case a sizable portion of the government resources meant for the poor would eventually end up merely sustaining these insurance companies rather than providing health care to the poor.

The State government believed the best results would be obtained only by involving public sector insurance companies and hospitals. But with the Centre insisting on the implementation of an insurance scheme involving both public and private sectors, Kerala was forced to work within a framework, or otherwise lose the Central funds, the Finance Minister said.

Ever since the Congress(I)-led United Democratic Front (UDF) government burnt its fingers by proposing an ill-conceived, irregular and unfeasible health insurance scheme for the poor on the eve of the Assembly elections in early 2006 (Unhealthy scheme, Frontline, November 17, 2006), the issue of evolving a health insurance scheme for the underprivileged has been as much a matter of concern to public health specialists and economists as to politicians in Kerala.

The Kudumba Suraksha health insurance scheme, when it was launched by the UDF government three months before the elections in April 2006, appeared a dream project for the poor in Kerala, who could, it was then claimed, obtain cashless medical treatment for all existing illnesses including mental illnesses and maternity needs, treatment at home, and insurance cover in case of accidental death or disability, for five members of a family for a paltry contribution of Rs.33.

The proclaimed benefits included Rs.30,000 a year as the total medical expenses for a family of five; up to Rs.60,000 a year for treatment at home, if required; up to Rs.15,000 a year for maternity needs; a subsistence allowance of Rs.50 a day (if the breadwinner is hospitalised); a bystander allowance of Rs.50 a day; coverage of all existing illnesses; and, as mentioned earlier, cashless medical treatment on production of the photo identity cards supplied by the insurer. The scheme also included an accident insurance benefit of Rs.1 lakh for death or full disability and Rs.50,000 for partial disability.

The total premium for a typical five-member BPL family was fixed at Rs.399 a year, with a Central government subsidy of Rs.300 under the Universal Health Insurance Scheme (UHIS) and an additional subsidy of Rs.33 each from the State government and the local body concerned.

However, it soon became obvious that no company would be able to bear the costs of a scheme with the kind of low premium that was quoted and that it was merely a ploy by the company to initially suffer a loss in order to make a killing later on. It was this election-eve political trick of the UDF government that made the general public wary of the dangers of an insurance scheme that was primarily dependent on private insurance companies and the private health care system.

Given the state of affairs in the government health facilities in Kerala, the UDFs insurance scheme would only have led to patients flocking to private hospitals. As public health experts had cautioned then, within a few years the government hospitals would have fallen into disuse and by then the company would have started demanding a much higher premium for treatment of poor patients in what would be a prospering network of private hospitals. The result would have been the undermining of the much-lauded and widely available public health care system in the State.

With the launch of the CHIS by the LDF government, such concerns are being re-energised in Kerala. Within a fortnight of the launch of the new scheme in Alappuzha district (it is scheduled to be introduced in all the 14 districts of the State by March 2009), there were early signs of an overwhelming response from the poor and a similar enthusiasm among private hospitals to gain accreditation.

In most districts, there is going to be nearly 80 to 100 per cent enrolment of people in the BPL category and already the private-sector hospitals, including several multispeciality medical college hospitals, are showing keen interest. Some of the medical college hospitals are even ready to enrol patients for free, because they say they face such a shortage of patients, said C.K. Viswanathan, Secretary, Labour and Rehabilitation, the department entrusted with the implementation of the scheme.

According to P. Sukumar, Executive Director, Comprehensive Health Insurance Agency of Kerala (CHIAK), the nodal implementation agency, there is an obvious eagerness among private hospitals in all districts for accreditation even though they are unhappy with the rates prescribed for the nearly 725 medical and surgical interventions or procedures under the scheme.

Meetings are being convened in all the 14 districts to ensure the participation of private hospitals and the response has been positive, he said.

A senior government official told Frontline that there was no doubt that the insurance companies were going to lose heavily in Kerala. In many other States, the companies are used to beneficiaries not claiming their dues and a system whereby they can hence pocket the government funds and leave. But in Kerala people go to hospitals even for minor ailments and the premium is extremely low. The question of viability needs to be addressed. Moreover, the private health care market is unethical and shockingly unregulated. That is cause for concern, in the context of such a scheme.

I feel that such a scheme would become successful only as part of a larger health sector reform, Dr. V. Ramankutty, Professor at the Achutha Menon Centre for Health Science Studies, told Frontline. The State government wants to implement a scheme that is open, but at the same time unattractive, to the private sector. That is a difficult proposition. For example, the rates prescribed are low but are they appropriate? The premium is low but is it viable? It is a good thing that funds from the scheme would be made available to government hospitals for improving facilities. But how effectively will they be able to utilise the funds? Are government hospitals ready to welcome an inflow of patients? Otherwise, naturally, there will be a tendency among people to go to the private sector. And the public health care system in Kerala would be further weakened.

In a recent article, Prabhat Patnaik reiterated that the insurance scheme was not meant to replace the existing free public health care system for the poor, but to build upon it.

This means that those who were earlier accessing the public system for free health care should continue to be eligible for free health care even after the insurance scheme comes into effect but the public sector should get compensated for an amount up to a maximum of Rs.30,000 (the ceiling under the insurance scheme) from the insurance provider in each such case. If someone from the BPL category incurs an expense higher than Rs.30,000, for example, the public system would continue to bear the additional expense on its own, he said.

No doubt, given the LDF governments compulsions to evolve a scheme within the limitations imposed by the Union government, the new health insurance scheme is certainly the best that can be done. As Thomas Isaac said, the government believes that even if the scheme fails, we will still have our public health care system intact. Or, should we say, hopefully?