'Ayushman Kerala' will deliver less than what Modi promised

'Ayushman Kerala' will deliver less than what Modi promised
The Ayushman Bharat's, PM Narendra Modi's flagship health scheme, premium amount, as feared by Kerala's Finance Minster Thomas Isaac (right), would remain at Rs 1,050.

The Centre has conceded one major condition Kerala had put forth to join Prime Minister Narendra Modi's flagship health scheme Ayushman Bharat – National Health Protection Scheme. The state has been allowed to customise the Ayushman Bharat scheme to make it financially viable. The scheme, when it rolls out in the state from April 1, 2019, will not promise a blanket benefit of Rs 5 lakh. Instead, the highest cover will be Rs 2 lakh.

Number mismatch

The Centre, however, has not agreed to increase the number of beneficiaries that it will assist. It is willing to bear 60 per cent of the premium amount of only 18.5 lakh families.

There are 41 lakh families as beneficiaries in the state under the existing Rashtriya Swasthya Bima Yojana (RSBY). "Even if its own selection parameters are employed, the Centre should be supporting 24.45 lakh families," said additional chief secretary (health) Rajeev Sadanandan. "Negotiations are still on and we are hopeful of making the Centre agree to support at least 24.45 lakh beneficiary families," he said.

As for the rest, 16.55 lakh beneficiaries, the state would pay from its own coffers. Under the RSBY, which is currently on, the Centre's share of 60 per cent of the premium is only for 20.4 lakh families. It is the state that meets the entire premium requirements of the remaining 19.6 lakh families.

Unworkably low premium

The Ayushman scheme's premium amount, as feared by Kerala's finance minster Thomas Isaac, would remain at Rs 1,050. This considered unsustainably low by the state. The RSBY scheme has a premium of Rs 1,250 and a maximum insurance benefit of Rs 30,000. But for Ayushman scheme, with a premium of Rs 1,050, the maximum insurance sum promised is a whopping Rs 5 lakh.

An insurance company cannot sustain such a low premium in a state like Kerala where the claims are high. "In the past 10 years of RSBY's operations, over 42 per cent of the insurance claims in the country came from Kerala. This is also a sign that the national insurance scheme is not functioning well in the rest of the country," Thomas Isaac said. "A smaller premium amount can work in North India where people don't generally access such schemes. But for an insurance amount of Rs 5 lakh is to be given in Kerala, insurance companies unofficially state that the premium will have to be in the Rs 5000-Rs 7000 range. It means that the state will have to bear the entire amount beyond Rs 1,110," Isaac said.

Realistic touch to Modi's claims

This is why the state wants the new scheme to be realistic. One thing is clear, the Rs 5 lakh insurance sum will be only on paper. "We will not run to the insurance companies for an insurance with a cap of Rs 5 lakh. The proposed premium, any which way you look at it, will be too inadequate for such an amount. At the most, the state will give an insurance cover of Rs 2 lakh. And even this will be a mix of both insurance and assurance," said Rajiv Sadanandan.

Insurance-assurance hybrid

In other words, this means that the maximum entitled insurance for a beneficiary in Kerala under the new scheme will be Rs 50,000. Anything above this amount and up to Rs 2 lakh will be covered under assurance schemes like Comprehensive Health Insurance Scheme (CHIS) and Karunya Benevolent schemes that are conditional and are limited to a specific number of ailments. (This is how the state gives a maximum insurance of Rs 70,000 for certain ailments under the RSBY scheme even though the RSBY cap is Rs 30,000.)

"There will be a very narrow pool of ailments, say for instance cancer or haemophilia, for which an insurance amount of over Rs 3 lakh will be granted," the health principal secretary said. In fact, the Centre has still not clarified how it would provide the promised sum; whether purely as insurance or, as Kerala will now do, as a combination of insurance and assurance.

Even after tweaking the Ayushman scheme the state is expecting an extra annual outgo of over Rs 700 crore. Under RSBY, the state shells out Rs 453 crore annually. Once the customised new scheme becomes operational, the annual expenditure is estimated to touch Rs 1,200 crore. The Centre will account for just Rs 125 crore.

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