premature termination of health insurance; 45.6 lakh beneficiaries without cover in Punjab

45.6 lakh beneficiaries of the Center and Punjab’s Ayushman Bharat-Mukhya Mantri Sehat Bima Yojana (AB-MMSBY) are without any health insurance cover in the state for the past six months, thanks to the premature termination of the contract with the insurance company during the regime . of the previous government.

The “immediate termination” order by the Punjab government’s health department came in December 2021, requiring beneficiaries to seek medical attention, to fend for themselves or to give up treatment.

The health department prematurely terminated its contract with SBI General Insurance, selected by the Punjab government to service the health insurance scheme, saying the “company is more than the time limit of 15 days stipulated for payment to hospitals”. hospital unnecessarily.” The contract expired on December 29, 2021, when the Congress led by the then Chief Minister Charanjit Singh Channi was ruling the state. OP Soni was the Health Minister at that time. The agreement would otherwise have expired on August 18, 2022.

The department neither penalized the company for those wrongdoings nor served any notice for blacklisting them. The settlement ended when the insurer was bleeding due to claims in excess of premium. The agreement was terminated just days before the model code of conduct for the 2022 assembly elections came into force. Otherwise the company was expected to incur an estimated loss of Rs 600-700 crore by the end of the contract. As per the contract, the financial liability of the company ceases only on the expiration date.

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premature termination of health insurance; Beneficiaries without cover in Punjab

Now this additional burden of Rs 600-700 crore will have to be borne by the present government. As of today, the government has a liability of Rs 249 crore, while most of the private hospitals and government hospitals like GMCH-32 have stopped entertaining the patients of Punjab under this scheme.

“The contract was provided for 30 days early termination notice to the company before serving the final termination notice. However, the department was in a hurry to terminate the contract with immediate effect without making any alternate arrangement for those 45 lakh families. Even if we leave the loss of several hundred crores to the exchequer, can we ignore the plight of so many deserving patients as dialysis facility or radiation facility is no longer available to them? asked a government functionary.

The government took legal advice from a private lawyer before proceeding with the termination. Interestingly, the then ministers and department officials preferred to seek legal opinion from a private lawyer rather than the government’s Advocate General and his battery of lawyers. The legal opinion cost the state exchequer Rs 2 lakh.

No permission was obtained from the Finance Department to terminate the contract. Had this been done, the FD would have disagreed, as it could have put an additional burden of about Rs 600-700 crore on the exchequer and the insurance company would have benefited from such an amount. As soon as the FD came to know about the immediate notice, he asked the health department to issue a clarification that it was not a final termination. But by that time the company had taken a stand that since the agreement has been terminated, it will not be responsible for any financial liability accrued after December 29.

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On Monday, Chief Minister Bhagwant Mann held a meeting with the officials of the Health Department and discussed the issue. It is being told that the officials have informed the CM about the whole matter. “We owe around Rs 250 crore to several government and private hospitals and hospitals in Chandigarh. The CM was told that the government would have to pay this as a liability. The government will ensure that residents continue to receive treatment. The next tenders will be called now,” said a source close to the discussions.

He said that soon after the expiry of the contract, the department had floated fresh tenders and got the most suitable bid at three times the premium of the earlier. While the contract with SBI-GIC was done at Rs 1050 per beneficiary, in the fresh tenders, it received bids for a premium of over Rs 3000. The Finance Department, however, objected and the tender was never awarded. Even at the time of termination, it was a forgotten conclusion that the new premium would be at least twice the existing premium.

The company had to pay a premium of Rs 458.45 crore to the Center and the state to insure 45 lakh beneficiaries at a premium of Rs 1050. Since the premium was to be paid on a six monthly basis, the government had paid a premium of Rs 142 crore. Since the Center pays 60 per cent of the premiums of the 14 lakh families listed as BPL by the Centre, its share in the total premium was around Rs 100 crore. While the Center pays the premium for only 14 lakh families, the state extended the scheme to 45 lakh families and renamed the Ayushman Bharat scheme as Ayushman Bharat – Chief Minister Health Insurance Scheme. With the termination, BPL families are also not getting any insurance.

When contacted OP Soni said, “The company was not waking up. The complaint was that they were not paying the claims. I had at least 10 meetings with them. There were protests across the state. Indian Medical Association (IMA) was organizing a series of protests. I had no personal interest. I had people’s interests in mind. I wanted them to get insurance. When the company was doing nothing, it was best to terminate the contract.”

An SBI spokesperson said in an e-mail Indian Express Said, “At SBI General Insurance we are always committed to our customers and well prepared to meet their requirements. Under Ayushman Bharat Sarbat Sehat Bima Yojana (AB-SSBY) scheme in the state of Punjab in August 2021 Since our onboarding as an official insurer, we have ensured that all claims are processed and have met compliance standards by the effective date of termination. Contract by State Health Agency, Government of Punjab. have settled all claims arising out of hospitalization on or before the effective date of termination and for which claims and appropriate supporting documents have been submitted to us.We have discharged all our obligations under the contract after the service and termination successfully completed.”