Continuation of ‘Medisep’ project uncertain as finance department walks a tightrope

Thiruvananthapuram: The ‘Medisep’ insurance project for government employees and pensioners has encountered roadblocks as the finance department hesitates to decide whether to continue with the project. According to government sources, the project has become entangled over issues related to increasing premiums and coverage. There are indications that the government is also exploring the possibility of winding up the project.

The contract with the insurance company is set to end on June 30, 2025. Although the company has approached the government to renew the project, the finance department is yet to express a definitive position. Besides, no practical suggestions have emerged from meetings held with service organisations regarding the effective implementation of the project.

Despite the inclusion of pensioners in the project—unlike in previous schemes—they are also dissatisfied with the services provided by the insurance company. Meanwhile, sources within the finance department indicate that the government is finding it difficult to continue with the ‘Medisep’ project for various reasons. Since the finance department has not yet finalised a decision regarding the continuation of the project, the tender process has not been initiated.

Bone of Contention

According to the existing agreement, the government pays Rs. 6,000 annually for each employee enrolled in the scheme, based on a contribution of Rs. 500 per month from each employee. This amount is paid in advance, and the government deducts Rs. 500 from the salary and pension of employees each month. Under the contract, each employee is entitled to insurance coverage of Rs. 3 lakhs. If a claim is not made in one year, the individual can claim it in the following year with additional benefits.

However, the company says that continuing the project under these terms is not financially feasible. They reported receiving Rs. 600 crores in the first year but had to pay out Rs. 700 crores for insurance claim settlements. As a result, they are demanding an increase in the premium amount. Despite discussions with service organisations, the government has failed to reach an understanding with them. The organisations have also demanded an increase in the coverage amount.

Currently, an employee can claim the insurance amount only if hospitalised. The service organisations are advocating for the reimbursement of expenses related to outpatient treatment and the inclusion of Ayurveda treatments in the project.

The Options

• Increase the premium and allow employees and pensioners the option to enter the project only if they are interested.
• Reinstate medical reimbursement for those who are not interested.

However, the government contends that this would create an additional financial burden. They also believe that restructuring the reimbursement project could lead to potential anomalies.

Medisep so far

• 30 lakh beneficiaries are included in the project, with 5.52 lakh employees and 5.87 lakh pensioners enrolled.
• 1,920 medical treatment packages available.
• 553 empaneled hospitals.
• Approximately 7.75 lakh claims settled as of October 15.
• Rs. 1,519 crores dispensed for medical treatment.