Cover could range from Rs 50,000-1 lakh with premium from Rs 1,000-2,400

A new health insurance scheme for masses will be launched by the government. While the name of the scheme is not known, it is proposed to be a cashless scheme with premiums as low as Rs 1000 for a family of five (without a senior citizen) for a cover of Rs 50,000. For those with one or more senior citizens, a cover of Rs 1 lakh would cost Rs 2,400, whereas for a family without senior citizens the Rs 1 lakh cover would be available for Rs 1,600.

As per this proposal that has been sent to insurance companies, this will be a cashless scheme and will not offer any subsidy. Any insurer, general or health, can offer this product. However, there would be a waiting period of two years for pre-existing conditions. This scheme will be over and above the existing Rashtriya Swasthya Bima Yojana (RSBY) scheme which is for people below poverty line.

As per a recent World Bank report, health insurance coverage in India is expected to cross 630 million people or 50 per cent of the population by 2015. As per data from the General Insurance Council, standalone health insurers saw the highest growth at 42.1 per cent from April to July this fiscal over last fiscal with premiums of Rs 1066.69 crore.

Insurance company executives said that this scheme will be much cheaper for customer, and is good for those who do not have any form of health insurance or have a small cover from their employer. “Since the cover protects the entire family, there is no need to buy any separate policy,” said the chief executive officer of general insurance company said.

However, some concerns have been raised about how this product, which is at a lower premium than other health insurance products, would be distributed. Here, banks have not been made a part of the process unlike the other government schemes under Pradhan Mantri Jan Suraksha scheme where insurers have been mandated to tie-up with banks for policy sales and claim payments.

Meanwhile, the RSBY scheme will be managed by special bodies created by state governments and no insurer will be involved in this process. However, the cover of Rs 30,000 under this would continue at Rs 30 fee. Earlier, there were talks of only having government-owned insurers in this scheme. But the government has decided against this idea.

RSBY, launched by labour and employment ministry in April 1, 2008, was envisaged to provide health insurance coverage to below poverty line families. RSBY beneficiaries are entitled to hospitalisation coverage of up to Rs 30,000 for most of the diseases. The government has even fixed package rates for hospitals for a large number of interventions. Pre-existing conditions are covered from day one and there is no age limit.

The coverage extends to five members of a family which includes the head of household, spouse and up to three dependents. Beneficiaries need to pay only Rs 30 as registration fee, while Central and state governments pay the premium to the insurer. As on April 30, 2014, there were 37.19 million active smart cards under the scheme and 7.16 million cases required hospitalisation.