Medisep insurance gets costlier for government staff, pensioners: Reasons, new premium

The Kerala state government has announced a steep hike in the Medisep premium, the health insurance scheme for government employees and pensioners, triggering concern among beneficiaries and opposition from service organisations. According to a recent order issued by the Finance Department, the monthly premium has been raised from ₹500 to ₹810, an increase of ₹310.

On an annual basis, beneficiaries will now have to pay ₹8,237, in addition to GST. The revised rate will come into effect from the first of next month. For the serving government employees, the enhanced premium will be deducted from salaries starting this month. For pensioners, the revised amount will be deducted from their pensions in January.

The decision has drawn opposition, with service organisations announcing plans to initiate a legal battle against the premium hike. The Finance Department, however, has defended the move, stating that the increase is linked to the rollout of the second phase of the Medisep scheme. According to the department, the revised premium has been set after addressing shortcomings identified in the existing system and is in line with the improved scheme structure.

What is the Medisep scheme?
Medisep is a comprehensive health insurance scheme introduced for government employees and pensioners in the state. The scheme came into force on July 1, 2022, and has since emerged as one of the most extensive health insurance initiatives for government staff and retirees in the state. Until now, beneficiaries were required to pay a monthly premium of ₹500, which was deducted directly from the salaries of serving employees and the pensions of pensioners.

The policy had a tenure of three years, with a basic coverage of ₹3 lakh per year. Of this amount, ₹1.5 lakh was earmarked for utilisation within a year, with any unutilised portion lapsing at the end of that period. Under the scheme, beneficiaries and their dependents were eligible to receive treatment at empanelled government and private hospitals.

A key feature of Medisep was its cashless treatment facility, which allowed beneficiaries to access medical care without making upfront payments.