Insurers get second chance to bid for CGHS project

Insurers get second chance to bid for CGHS project

Insurance companies will get another opportunity to bid for the Union government’s ambitious health insurance project, ‘Central Government Employees and Pensioners Health Insurance Scheme’.

The health ministry had earlier nullified last year’s bidding process due to changes in the terms and conditions of the proposed scheme.

ICICI Lombard General Insurance had won the bid last year to administer the health insurance project, meant for employees eligible for medical treatment under the Central Government Health Scheme(CGHS). It will have to apply afresh to qualify again.

The decision will also allow last year’s unsuccessful bidders such as Oriental Insurance, New India Assurance, United India Insurance, National Insurance, Cholamandalam Ms General Insurance and Star Health and Allied Insurance to try their luck again.

Sources in the ministry said the decision to cancel last year’s tender result was due to changes made in the list of beneficiaries, for whom the proposed health insurance scheme would be mandatory in the initial stages. The initial plan was to make health insurance mandatory for new recruits who join after the commencement of the scheme.

It was also decided future pensioners, who retire after the scheme comes into force, should also be asked to be part of it. Later, after finalisation of the tender, the ministry decided to keep this option voluntary for future pensioners and make it mandatory for recruits.

The change, officials said, would have resulted in a difference in the number of estimated beneficiaries and hence, the re-tendering exercise.

The CGHS covers over 800,000 families, of which 500,000 are employees and 300,000 are pensioners, through its network of hospitals and clinics in 25 cities and towns across India. Since it has no presence in 10 states, it does not cover all the 3.2 million eligible families. With the government deciding to put a cap on its annual spend of Rs 1,600 crore, there is no alternative funding mechanism to turn health coverage inclusive. The new health insurance scheme is considered as an attempt to make this possible.

The new proposal, for which expression of interests will be invited from insurance companies in three months, is expected to cover seven lakh pensioners in five years.

According to sources, ICICI had agreed to provide a Rs 5-lakh insurance coverage for each policy holder for an annual premium of Rs 1,500.

The officials said the initial contract would be for three years and the insurance company that administered the programme would have the flexibility to seek a change in the premium amount every year.

Source : Business Standard