Thiruvananthapuram: The second phase of Medisep, the health insurance scheme for government employees and pensioners, is being rolled out without addressing the need for cashless treatment, prompting widespread criticism.

Many hospitals have reportedly withdrawn from Medisep, and employees say the government has failed to propose the inclusion of new facilities. In the absence of a cashless system, patients are forced to pay for treatment upfront, with reimbursement amounts allegedly reduced by 40 to 60 per cent. There is also no effective mechanism in place to address grievances.

The government has stated that it will engage the services of the Clinical Establishment Authority to curb exploitation by private hospitals, including overbilling. However, provisions in the law requiring hospitals to display treatment rates have not been implemented, and pressure from private hospitals persists.

Various employee organisations have demanded that enrolment in Medisep be voluntary rather than compulsory. They have also raised concerns over the monthly premium increase from ₹500 to ₹750, warning of a further hike next year.

SETO Chairman Chavara Jayakumar called for the government to contribute towards the premium, noting that other benefits, including reimbursement, were withdrawn when Medisep was introduced.

It has now been suggested that the insurance company will be tasked with preparing a standard operating procedure to take strict action against hospitals that breach the agreement, a move that pro-government organisations say would benefit the insurer. Kerala Secretariat Association President M S Irshad has urged the government to redesign the scheme so that only willing participants are enrolled.