Early termination of health insurance; 45.6 lakh beneficiaries without coverage in Punjab

Up to 45.6 lakh beneficiaries of Ayushman Bharat from the Center and Punjab – Mukh Mantri Sehat Bima Yojana (AB-MMSBY) have been without health insurance in the country for the last six months, thanks to the premature termination of the contract with the insurance company during the previous regime. government.

The “immediate cessation” order from the Punjab government’s health department came in December 2021, leaving beneficiaries in need of medical care to fend for themselves or simply leave treatment in the middle.

The health department prematurely terminated its contract with SBI General Insurance, selected by the Punjab government to service the health insurance scheme, arguing that “the company takes more than 15 days to pay for hospitals or sanction hospitals unnecessarily.” The treaty was terminated on December 29, 2021, when the Congress, chaired by then-Chief Minister Charangit Singh Chani, was in charge of the country, and OP Sony was the Minister of Health at the time, otherwise the agreement would end on August 18, 2022.

The department did not punish the company for these wrongdoings, nor did it give them any notice to be blacklisted. The termination of the agreement came when the insurer was bleeding due to higher claims than the premium. The agreement was terminated just days before the code of conduct for the 2022 assembly elections came into force, otherwise the company was expected to have a loss of 600-700 rupees by the end of the contract. According to the contract, the financial obligations of the company end on the date of termination.

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Early termination of health insurance; uncovered beneficiaries in Punjab

Now this additional burden of Rs 600-700 Crore will have to be borne by the current government. To date, the government’s liability is 249 rupees, even when most private hospitals and public hospitals such as GMCH-32 have stopped entertaining Punjab patients under the scheme.

“The contract provided for a 30-day notice of termination to the company prior to service of the final notice of termination. However, the department in question was in a hurry to terminate the contract with immediate effect, without making any alternative arrangements for these 45 Lakhia families. Even if we set aside several hundred crores of treasury loss, can we ignore the plight of so many deserving patients who are dying because the dialysis or radiation facility is no longer available to them? ”A government official asked.

The government took legal advice from a private lawyer before proceeding with the termination. Interestingly, the then minister and officials preferred to take the legal opinion from a private lawyer rather than the government’s attorney general and his group of lawyers. The legal opinion costs the state treasury Rs 2 lakh.

No permission has been obtained from the Finance Department to terminate the contract. If it had been done, FD would not have agreed, as it potentially placed an additional burden of almost Rs 600-700 crore on the state treasury and benefited the insurance company so much. As soon as the FD learned of the immediate notice, they asked the health department to clarify that this was not a final termination. But at the time, the company was of the opinion that once the agreement was terminated, it would not be liable for financial liabilities accrued after December 29.

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On Monday, Chief Minister Bhagwant Mann met with health officials to discuss the issue. The officials informed the Council of Ministers about the whole problem. “We owe about 250 rupees to several public and private hospitals and hospitals in Chandigarh. CM was told that the government would have to pay this as a liability. The government will clarify this to ensure that residents continue to receive treatment. The next tenders will be announced now, “said a source familiar with the discussions.

He added that shortly after the contract was terminated, the agency published new offers and received the most appropriate offer at triple the premium price earlier. While the contract with SBI-GIC was concluded at Rs 1050 per beneficiary, in the new tenders it received the Rs 3000 plus premium offer. However, the finance department objected and the tender was never distributed. Even at the time of termination, it was ruled out that the new premium would be at least double the current premium.

The center and the state had to pay the company a premium of 458.45 rupees to insure 45 lakh beneficiaries with a premium of 1,050 rupees each. As the premium had to be paid on a six-month basis, the government paid a premium of Rs 142. As the Center pays 60 per cent of the premium to the 14 lakh families listed as BPL by the Center, its share is around Rs 100 in the total premium. While the Center paid a premium for only 14 lakh families, the state expanded the scheme to 45 lakh families and renamed the Ayushman Bharat scheme to Ayushman Bharat – Mukh Mantri Sehat Bima Yoyna. With termination, even BPL families do not receive insurance.

Contact OP Soni said: “The company is not waking up. There were complaints that they did not pay receivables. I had at least 10 meetings with them. There were protests across the country. The Indian Medical Association (IMA) held a series of protests. I had no personal interest. I meant people’s interest. I wanted to get insurance. When the company was doing nothing, it was best to terminate the contract. “

An SBI spokesman told The Indian Express: “We at SBI General Insurance have always been committed to our customers and are in a good position to serve their requirements. After joining as an official insurer under the Ayushman Bharat Sarbat Sehat Bima Yojana (AB-SSBY) scheme in Punjab in August 2021, we ensured that all claims were processed and met compliance standards by the effective date of termination of the contract by the State Health Agency, the Government of Punjab. We have settled all claims arising from hospitalization on or before the date of entry into force of the termination of the contract and for which we have been filed claims and appropriate supporting documents. We have successfully fulfilled all our obligations under the contract during and after the service. ”

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