Cess for cashless critical illness cover mooted

Within a gap of less than two months, a second expert committee on health has recommended that ?it could also be considered wherein government could provide cashless treatment for critical illnesses for all citizens in select hospitals. Such a programme could be administered through something on the lines of ?health financing cess?.?

Last month, a high-powered panel in the Planning Commission constituted by the Prime Minister proposed a healthcare model that allows cashless treatment for all in select specialty hospitals. The funding for such a set-up is proposed to be administered under ?a single payer system?. Under this, a public health insurance agency is proposed be responsible for collecting funds and making payments for mandated healthcare services from a single source. The possible financing options include a health cess, as reported by FE earlier.

The other recommendations include setting up a credit bureau for insurance agencies with a detailed history of all insured persons, which would include frauds. A similar problem that afflicted banks and housing finance companies was resolved by forming Credit Information Bureau India (CIBIL), which helped them access the past credit histories of borrowers before advancing new loans, reducing their risk by blacklisting defaulters.

?CIBIL has made borrowers more disciplined on repayments, as they fear being declared defaulters and losing the opportunity to secure loans in future. A similar data bank for insurance agencies can go a long way in lowering the number of defaulters and would result in a lower interest rate for all borrowers. During the interim period when such an insurance bureau is being formed, insurance companies should be allowed access to CIBIL data as many insured people would have taken loans at some point in time,? said Sujoy Shetty, leader, Pharma Practice, PwC, who is also a member of the committee on improving access to healthcare in the country.

Other members in the committee include Devi Shetty, chairman of Narayana Hrudalaya, representatives from department of pharma and ministry of health, industry members from Bharti Axa Life Insurance, Max Healthcare, third party administrators such as Paramount TPA among others.

A copy of recommendation is being sent to the Insurance Regulatory and Development Authority, Planning Commission, health ministry, Department of Pharma for consideration.

Other suggestions of the committee include formulating policies that covers preventive check-ups and OPD (outpatient department) treatments so that unnecessary hospitalisation is avoided, make provision of group coverage of health insurance for private sector employees mandatory and make tax incentives related to insurance schemes more lucrative.

At present, less than 15% Indians are covered under some form of health insurance, including government-supported schemes. Only around 2.2% are covered under private health insurance, of which rural health insurance penetration is less than 10%. Although healthcare insurance in India is underpenetrated, it is expected to grow at a CAGR of 15% till 2015.

At the current rate of growth only 50% of India?s population would have health insurance cover by 2033. This is despite estimates indicating that nearly 39 million people in India are pushed below poverty line because of ill health every year.

Around 30% in rural India actually opted out of medical treatment for purely financial reasons in 2004, up from 15% in 1995. While in urban areas, 20% of ailments went untreated for financial reasons in 2004, up from 10% in 1995. Additionally, around half of all hospital admissions in rural India and 31% in urban India were financed by loans and the sale of assets.