The expert committee constituted by the government to revamp the Medical Insurance Scheme for State Employees and Pensioners (MEDISEP) has recommended enhanced insurance coverage, a larger and more comprehensive package of procedures and improved coverage of catastrophic illnesses under the scheme.

The committee has recommended an enhanced basic insurance coverage from ₹3 lakh to ₹5 lakh, based on the framework of the Health Benefits Package (HBP) 2022 formulated by the National Health Authority.

However, while the HBP 2022 costing might attract more private hospitals to empanel under the scheme, it would also mean that the current premium would have to be increased by 50% to accommodate this costing.

This means that the current monthly premium could go up from ₹500 to ₹750.

Adoption of HBP 2022 would mean that many pre-hospitalisation investigative procedures like CT scans and high-cost injections etc. would also get covered under MEDISEP.

New conditions under ‘emergency procedures’

The committee has also recommended expanding the definition of ‘emergency procedures’ (which earlier included only road traffic accidents, heart attack and stroke), to include 10 more conditions, including electric shock, poisoning, animal attacks, burns, snake bites or drowning.

MEDISEP, which was launched in July 2022, offered a basic insurance cover of ₹3 lakh, at a monthly premium of ₹500. It covers over 30 lakh individuals, including some 5.45 lakh government employees, 5.89 lakh pensioners and their dependents.

The scheme, which was envisaged as a comprehensive health insurance cover for a significant section of the population, ran into rough weather despite its high uptake, because of the non-participation of private sector speciality hospitals. The scheme came under much criticism because the package rates for various medical procedures were felt to be “impractical, non-uniform and unrealistic”, making MEDISEP unattractive for the private sector.

With the three-year policy period of MEDISEP coming to an end on June 30, 2025, the government had set up a six-member expert committee under Sriram Venkitaraman, Joint Secretary and Officer on Special Duty (Finance Resources) to study the scheme and recommend appropriate revisions.

The expert committee has recommended that the HBP 2022 costing be adopted for MEDISEP, with an increase of 1.5 times of Tier One city rates for private hospitals. However, for government hospitals, the HBP 2022 packages will be accepted as such.

The committee has also recommended that MEDISEP be extended to employees and pensioners in public sector undertakings, Corporations, autonomous, statutory bodies and the cooperative sector, where the health insurance cover might be poor or inadequate because of the high premiums and poor beneficiary packages offered by private health insurance companies.

This is one way the government can keep the premium or costs down, while increasing the overall risk pool.

Slashing policy period

Another recommendation is that the policy period be made two years instead of the current three years so that any costing/package rates changes that may arise may be accommodated, which will also make the scheme more sustainable and attractive as far as the private health sector is concerned.

The committee has recommended that the ceiling on hospital room rent for private hospitals be increased from the current ₹2,000 to ₹5,000. The rates for ICU/ ventilator admissions will be as per the HBP2022 rates.

A proper grievance redressal mechanism, with the inclusion of representatives from private hospitals associations and IMA has also been recommended by the committee to deal with issues of claim rejection, delays in claims settlement or complaints regarding package rates.

All hospitals with 10 beds or more will be encouraged to empanel under MEDISEP.

The recommendations will be presented before the Cabinet soon for approval.