Ayushman Bharat-Karunya Aarogya Suraksha Padhati (AB-KASP), an integrated health insurance scheme covering nearly 42 lakh families in Kerala, seems to be headed for financial disaster as on one hand the scheme is draining the exchequer in no time, while the sums of non-payment of insurance claims are on the other. installed on another.
In the last three years since the scheme was implemented in Kerala under insurance mode, government spending on the scheme has gone out of hand. From ₹ 460 billion in 2020-21, KASP claims expenditure increased to ₹ 1,141 billion in 2021-22.
Even in the midst of the country’s fiscal crisis, the finance minister had to sanction ₹200 crore last week to settle claims to keep KASP from running aground. This year’s claims expenses have already reached 938.89 kroons. The fact that the National Health Agency (NHA) has paid only a fixed premium to the states – ₹ 138 per annum for Kerala – has not helped matters, completely ignoring inter-state differences in healthcare delivery.
Fee 970 kroons
The shocking extent of the financial mess of the State Health Agency (SHA), the AB-KASP implementing agency, has come down to the state government, data obtained with the NHA shows Kerala’s insurance claim payout second. the highest in the country, accounting for approximately ₹ 970,000,000 out of ₹ 8,000,000 pending claims.
Kerala’s concerns over KASP seem to have started when the government decided to shift the scheme from insurance to insurance mode in April 2020 on the proposal of the Special Officer for KASP. It said the assurance mode would provide “better cashless treatment”.
Reason for exchange
The reason for switching from the insurance regime to the insurance regime was said to be delays in settling claims and the high rate of rejection of claims by insurance companies. The confirmation approach was argued to be beneficial as the government would have direct control over the verification, processing and settlement of claims, resulting in less resources.
Public health experts point out that the financial sustainability of a scheme like AB-KASP under a guarantee regime, where the state government has to shoulder the bulk of the financial obligations directly, was always questionable. This was especially so in a state like Kerala, where the ratio of hospitalizations to claims would be high due to health-seeking behaviour.
Before KASP, from 2008 to 2019, the then health insurance scheme Rashtriya Swasthya Bima Yojana (RSBY) was run by the state in an insurance mode without any problems. In the insurance regime, the government has to pay only a pre-fixed premium to the insurance company and the scheme is managed by the company, which bears all the losses that may occur even if the claim ratio reaches 100%. In safe mode, it’s the complete opposite.
Claims costs, which used to be around ₹700-800, have now become unlimited. The overdue claims of both public and private hospitals have only increased instead of decreasing. The government and the SHA need to explain why KASP in guarantee mode was thought to be beneficial to the country and why the scheme was allowed to become so viable, especially when the country’s fiscal position is under great pressure, it is pointed out. out.