New Delhi:

After Nagaland, two more states, Gujarat,Chattishgarh and union territory Daman & Diu have finalised their mode of  participation in the National Health Protection Mission(NHPM).


Gujarat,and Chattishgarh, which have chosen hybrid model- mix of Trust and Insurance coverage of Rs 50,000- have chosen their insurers after completing the competitive biddings.


Delhi based Oriental Insurance Company(OIC) has successfully bid for the state of Gujarat at Rs 360 for providing cover upto Rs 50,000 per family. Similarly, stand-alone health insurance company, Raligare Health Insurance Insurance has bagged the mandate from the state of Chattishgarh by offering a rate of Rs 1100 for providing a cover upto Rs 50,000 per family.


Initiallly, Baja Allianz General insurnace,that had quoted at Rs 1270, was declared as winner, but later it was found out that due to technical gliches, other companies like Raligare which had offered much cheaper pricing at Rs 100 have been overlooked.Finally, Raligare Health Insurnace was chosen by the government of Chattishgarh.   


The NHPM account of Daman & Diu, which has gone for entirely insurance model, has been awarded to the OIC at a rate of Rs 1712 per family for a Rs 5lakh cover,. 


In all these states that have completed their bidding process,  New India Insurance(NIA), the largest listed general insurer in the country, could not succeed as it stuck to a higher premium. In Gujarat,it had quoted a price of Rs 800.while for both Chattishgarh and Daman, it has quoted a premium of Rs 2500.


As the launch of this mega health insurance scheme is drawing closer, Prime Minister Narendra Modi will unveil the scheme on Aug15, more states are now getting ready to finalise the platform, they would be utilising for offering Rs 5 lakh health cover to the poor and vulnerable familes in the country for free.

The largest state in the Country, Uttar Pradesh and some smaller states like  Uttarakhand, Himachal Pradesh and Tripura have all decided to opt for pure Trust model over Insurance one.

“It is now clear NHPM, that was expected to be a big business for the domestic general insurance industry, is turning out to be a damp squib for them'' said analysts. 


Earlier, private sector Apollo Munich General Insurance had bagged the Nagaland account at a premium of Rs 444 per family. 


According to the sources,out of the 26 states that signed memorandums of understanding (MoUs) with the government to participate in the scheme, only 4 states — Jharkand, Nagaland, Manipur and West Bengal — have stuck with the insurance model.


"We realised that the trust model is more successful as insurance companies do not process claims so easily and claim settlement will be easier under trust model," said Uttar Pradesh Health Minister Sidharth Nath Singh.


West Bengal will follow a hybrid model that will involve floating of tenders in some districts to choose insurance companies for the scheme. The others will have a trust handling all the claims.


"When the scheme was announced insurance companies were looking at it with lot of interest, it's potentially giving them huge business," said Indu Bhushan, Chief Executive Officer of the Ayushman Bharat scheme.

"In the RFP (request for proposal) or tender document, we made sure that they don't have windfall gain. So we ensured that they can take a maximum of 15 percent (profit margin), and if the profit (margin) is more than15 percent they have to give it back. They are still interested, but their level of enthusiasm has gone down, as they can't make big profit," Bhushan said.


In a trust-based model, each individual state will form its own trust to manage the scheme and claims will be disbursed from a corpus created from central and state government contributions at a ratio of 60:40.In Trust Model, the claims will settled through the help Third Party Administrators(TPAs). 


There are problems with trust-based models as well, as most states don't have the experience to handle the high volumes of claims, and possible frauds and corruption.


States were also encouraged by the experience of Andhra Pradesh, which has its own health scheme called Aarogyasri delivered through a trust model that has been successful in keeping costs largely unchanged.


Meanwhile, Debasish Panda, additional secretary, Insurance, Ministry of Finance(MoF), held a meeting with the general managers(GM) of all the four state-owned general insurance companies- NIA, OIC, National Insurance Company and United India Insurance(UII)- in New Delhi on July 30 to know their views on the tender document for the NHPM.

Some of the suggestions made by the GMs are- _
-Reverse bidding is not a good practice,
-Security amount should be removed from the tender document,
-Refund of premium should be if the profit is in the range of 20-30 per cent or. It was kept at 30 per cent for the  RSBY, 
-A national rate must be informed by the government as the insurers have no idea about it.