Overview of Publicly Funded Health Insurance: Tamil Nadu Model

Introduction

As per the World Health Organization report on health financing,(1) out-of-pocket payments for health can cause households to incur catastrophic expenditures, which in turn can push them into poverty. The need to pay out-of-pocket can also mean that households do not seek care when they need it. National health accounts(2) show that 72% of all health expenditure is made by individual households, which is one of the highest proportions in the world, and it is most regressive form of health care financing.

After taking into account the need, status of health financing and existing health insurance schemes in India, the Government of Tamil Nadu took a decision to roll out this insurance scheme.

The Government of Tamilnadu has launched the Chief Minister Kalaignar Insurance scheme for life-saving treatments on July 23^rd 2009. Based on the experience from a similar scheme, “Aarogyasri”(3) and “Rashtriya Swasthya Bima Yojana (RSBY) Scheme,”(4) our project has been launched covering the entire state.

Target Group

The scheme is targeted to cover the families of the 26 welfare boards (unorganized sector) as well as families earning less than Rs. 72,000/- per annum.

Enrollment and Issue of Smartcard

Village-wise camps were organized with 1000 teams through the insurance company across the state. During enrollment, the target group is identified through ration card and income certificate from the revenue officials. The photos and fingerprints from both thumbs of all the members of the family are taken and then data is centralized and a smartcard is prepared and distributed through district administration. As of now, more than 1.33 crore families are enrolled and have been given the smartcard.

Sum Assured, Premium and Procedures Covered

Each eligible family is insured for an amount of 1 lakh for a period of 4 years, with an annual premium of Rs. 469/family, which is being paid entirely by the Government of Tamilnadu. A list of the various disease covered under this scheme is given by the government order(5) and other details of the scheme, like list of hospitals empanelled, procedures and package cost, can be accessed through their website.(6)

Analysis and Results

In the first year, 153,410 patients are benefited and Rs. 415 crores claims have been made. The claim ratio in the first year was 73%, excluding capacity building cost, card cost and other administrative cost, which are anticipated to increase in the future.

The age- and gender-wise utilization in Table 1, specialty-wise utilization in Table 2 and district-wise claims in Table 3 explain the progress of the scheme, which is self-explanatory.

Table 1.

Age-wise and gender-wise beneficiary report (1^st year policy)

Table 2.

Disease-wise number of claims versus amount spent (1^st year policy)

Table 3.

District-wise claims summary (1^st year policy)

Advantages

1. Empowers the community with choice of either private or public health facility.

2. Package rates with volume reduced the cost of health care.

3. Insurer is paid the premium based on the enrollment, which ensures coverage.

4. The portability in scheme, where the beneficiary can avail treatment at any part of the state, is useful to migratory workers.

5. Advanced IT elements like biometric cards and web-based claims management have been used to ensure hassle-free service delivery and uniform claim processing without any delay or corruption.

6. No age limit; everyone in the family and all preexisting diseases are included.

7. A paperless service provision model ensures that the public is not facing any hassles; they just walk in with a smart card and walk out with satisfied treatment.

8. It covers not only the poor but also the low middle class by raising the income ceiling limit to Rs 72,000 per annum, which is very unique, and it is for the first time that the middle class is also being addressed in welfare schemes.

9. The scheme is run by the insurance company directly without Third Party Administrators, which ensures timely settlement of claims and issues, if any arise.

Challenges

1. Identifying the Insurance Scheme Partner/Company in a transparent manner through open tender who can deliver the services at a competitive rate.

2. Enrollment of the eligible beneficiaries after certification by the appropriate authority without subjecting the public to hurdles is a challenge.

3. Creation of network hospitals with grading who agree to provide quality treatments at the approved package rates.

Replication in Other Parts of the Country

1. With IRDA rules and regulations governing the insurance sector in the entire country, formulating a similar insurance scheme is an easy task.

2. Training the officials and sensitizing the public can be replicable.

3. Diseases and treatment procedures are standardized to a larger extent across the nation. Additional procedures can be accommodated according to local epidemiology.

4. Use of biometric cards for the beneficiaries has helped in weeding out spurious entrants, and it has also helped in maintaining a paperless ecofriendly system that becomes part of a Web Based Claims Management System, which offers several advantages for maintenance and growth. The IT infrastructure in use can easily be copied and used with minimal changes to accommodate the magnitude of the beneficiaries.

Scalable

Although it covered the intended beneficiary at the entire state level, there is still scope for the expansion of the scheme, where the Above Poverty Line population and the organized private sector groups can join the scheme by paying the premium themselves.

Sustainability

This scheme enjoys the patronage of the state administration and has the complete acceptance of the society. The annual expenditure outlay toward this scheme amounts to Rs. 750 crore, which is manageable and sustainable.

Issues that Need to be Addressed

There is a need for external evaluations of the performance and possibility of integration with RSBY.

Quality Issues

The Empanelment and Disciplinary Committee, Mortality and Morbidity Committee Vigilance Committee, Ortho/Cardiac/Cochlear Committee, Inspection Committee and Redressal Committee at the district level under the chairmanship of the district collector look into the quality issues.

With all the above factors, this scheme ensures that benefits actually reach the intended beneficiaries directly/entirely without any pilferage, which can be a model for other states to adopt with suitable modifications.