Overview of Different Government Health Insurance Schemes Available in India

Actuaries India
Jul 21, 2018 · 3 min read

It is important to stay fit and healthy. A fit body and mind helps to increase productivity and efficiency in life. The world witnesses a rise in population and with that there occurs a crunch on the natural resources. Excessive population and industrialization have contributed to pollution resulting in the occurrence of a wide variety of diseases. Many people fall prey to these diseases, many die without proper treatment. However, those who have enough money consider investing on different health insurance products so that they can claim the benefits if they suffer from ailments.

In this context it is important to discuss about “Pradhan Mantri Health Insurance Scheme”. This insurance product is useful for the people of the country.

Pradhan Mantri Health Insurance Scheme is a social security scheme that was announced by the Government of India. The scheme offers cashless hospitalization cover for secondary as well as tertiary care. Another interesting feature of PMHIS is that the scheme allows a sum assured of 5 lakh annually on a family floater basis. Yet another feature of the scheme is that there is no payment on death. This insurance scheme was designed for about 10 crore needy, vulnerable Indians. As of the year the beneficiaries of this scheme is more than 50 Crore and that is 40% of India’s population. Government estimates a premium of about Rs. 1000–1200 per family, on an annual basis. An important feature of PMHIS is that the insurance costs are totally borne by the Government.

How PMHIS is expected to Work?

The ministry of health & family welfare is entrusted with the responsibility to implement and administer the scheme. There is decentralized implementation at the state level. A competitive bidding process selects private or public insurer. Insurer with lowest financial bid is selected to provide health insurance. The responsibility of the general and standalone insurer is to price the product on the basis of available data in order to make the product financially viable. The insurer is also responsible to enrol with families, tie-up with the hospitals and other administration.

Besides the PMHIS there is yet another scheme, abbreviated as RSBY. The features of the RSBY are mentioned as follows:-

This is a social security scheme and its premium is funded by the Government.

The scheme offers cashless hospitalization benefits of Rs. 30,000 per family, on an annual basis. The scheme offers coverage to below poverty line (BPL) families. A maximum of 5 people per family can be covered under the scheme.

If we do a comparison between the two schemes, PMHIS and the RSBY then we find the following differences:-

  • RSBY is meant for BPL families whereas the PMHIS is meant for poor and vulnerable families.
  • Under RSBY the amount is Rs. 30000 annually on a family floater basis. Under the PMHIS the amount is Rs. 500000 annually (which is 17 times the value under RSBY) on a family floater basis. The scheme also includes 3-days of pre-hospitalization and 15 days of post-hospitalization.
  • Under RSBY, a maximum of 5 members of a family can be covered. Under PMHIS any number of family members can be covered.
  • Under RSBY the premium shared between the centre and the state is in the ratio of 75:25. Under PMHIS the premium shared between the centre and the state is in the ratio of 60:40.
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