The Tamil Nadu government?s decision to scrap the previous DMK regime?s Kalaignar Insurance Scheme is expected to cast a shadow on the business prospects of Star Health and Allied Insurance Company, which has been managing the scheme since mid-2009 along with other firms.
More than 70% of the company?s business comes from the state governments? insurance schemes, including that of Arogyashree in Andhra Pradesh and Kalaignar Insurance Scheme in Tamil Nadu.
Star Health is said to have conducted a total business of R1,250 crore in 2010-11. As on December 31, 2010, the total net premium earned by the company was R609.2 crore, according to the data posted on its website. Interestingly, it was only in the last financial year that the company started making profits.
Company officials refused to comment on the issue, but sources in the know said the firm would now focus more on its retail portfolio, apart from targeting corporates for bulk insurance schemes.
In her reply to the debate on the governor?s address, chief minister J Jayalalithaa said on Friday that the scheme had been largely beneficial to private hospitals, with negligible portion of the premium covered under it going to government hospitals. She said that out of the R850 crore paid towards settlement of medical claims under this scheme so far, only R10.49 crore went to government hospitals.
She added the scheme itself had many shortcomings, including inadequate coverage for some life-saving surgeries and no provisions for reimbursement. A new insurance scheme would be introduced which would take care of the entire medical expenses of the insured public, she said.