7th Pay Commission Recommendations on Health Insurance Scheme

Health Insurance Scheme : In this backdrop, the Commission opines that health insurance for the government employees and pensioners remains the most optimal route for ensuring complete coverage for all employees, pensioners and their dependants in the long run. The IV CPC had suggested that feasibility and modalities of an Insurance Scheme for government employees in lieu of medical reimbursement may be considered by the government.

The VI CPC had recommended introduction of a health insurance scheme for Central Government employees and pensioners. It had recommended that for existing employees and pensioners, the scheme should be available on a voluntary basis, subject to their paying the prescribed contribution. It had also been recommended that the health insurance scheme should be compulsory for new government employees who would be joining service after the introduction of the Scheme.

Similarly, it had recommended that those retiring after the introduction of the insurance scheme would be covered under the Scheme.

The Commission observes that in view of the recommendations of the earlier Pay Commissions and various high power committees, the government has been contemplating the introduction of a health insurance scheme on Pan-India basis. The Commission notes that although the Committee of Secretaries had given its ‘in principle’ approval way back in 2011, and an amount of ₹ 2,061 crore had been earmarked under the XII Five Year Plan, the Scheme has still not been implemented.

The Commission notes that given the tardiness in the introduction of the long awaited Insurance Scheme, as already mentioned earlier in this chapter, the pensioners residing outside CGHS area will continue to be at a disadvantage, in terms of medical facilities, compared to their counterparts residing in CGHS areas. As stated earlier in this chapter, according to existing provisions, pensioner residing outside CGHS area but subscribing to CGHS for OPD/IPD can avail medical facility from any hospital–private or public or empanelled under CS (MA)/ECHS–in his/her own city. However, in such cases, the pensioners have to make upfront payment to the hospital and claim reimbursement later. The Commission feels that this could be a limiting factor for many pensioners who may not have the resources to pay hospital expenses upfront. The Commission notes that under CS (MA) Rules/ECHS, there are empanelled hospitals in every part of the country, at least in all major locations. In this backdrop, after identification of some major centres/cities based on minimum population threshold of pensioners, these hospitals could be empanelled by CGHS as well, for extending
medical facilities on a cashless basis.

Considering all the issues, the Commission makes the following recommendations:

i. The Commission strongly recommends the introduction of health insurance scheme for Central Government employees and pensioners. In the interregnum, for the benefit of pensioners residing outside the CGHS areas, the Commission recommends that CGHS should empanel those hospitals which are already empanelled under CS (MA)/ECHS for catering to the medical requirement of these pensioners on a cashless basis. This would involve strengthening of administrative capacity of nearest CGHS centres. However, this step will go a long way in ameliorating the pending grievances of these pensioners.

ii. The Commission recommends that the remaining 33 postal dispensaries should be merged with CGHS. The Commission further recommends that all postal pensioners, irrespective of their participation in CGHS while in service, should be covered under CGHS after making requisite subscription.

iii. Currently, there are various health care schemes in the Central Government catering to specific sets of employees. For example, apart from CGHS, there are Ex-Servicemen Contributory Health Scheme (ECHS) and Railways Employees Liberalized Health Scheme (RELHS) which cover ex servicemen and Railway employees/pensioners, respectively. Although the patterns in these schemes vary, a combined entity of CGHS ECHS-RELHS
would result in a very strong network of health facilities for the Central Government employees across the length and breadth of the country. The Commission recommends that possibility of such a combined network of various medical schemes should be explored through proper examination.

Based on the recommendations of the VI CPC, the Government has been contemplating introduction of a Health Insurance Scheme. The Commission observes that there are many global health care insurance companies today who provide comprehensive health care coverage. Through suitable tie ups with these companies, the government may examine the possibility of enhancing the remit of the proposed Health Insurance Scheme to include all the officers/staff and their dependents posted in Embassies/Missions abroad. Needless to state, this should be preceded by a thorough examination of the annual costs involved under the AMA Scheme vis-à-vis likely annual cost under the insurance route.

Authority: 7th CPC Report