Only two per cent of the targeted families were covered by Arogya Raksha in Andhra Pradesh during 2017-18 policy period. Of those, approximately 78.25 per cent not being part of the renewal for 2018-19 policy period, informs Dr Manjuram Mannuru (PT) (MHA-T.I.S.S), Ex. Manager (Grievances & Settlement) – Health Insurance, Punjab Health Systems Corporation, Government of Punjab
On January 1, 2017, Andhra Pradesh Chief Minister Chandrababu Naidu had launched Arogya Raksha Health Insurance Scheme in Guntur. The scheme targets around 32 lakh APL (Above Poverty Line) families of the state and covers hospitalisation expenses of upto Rs 2 lakhs per individual per year for the annual premium of Rs 1200 per person. If a person wants to cover his parents, spouse and two children, then the premium charged under the scheme is Rs 7200/-. The aim of the government is to achieve ‘Health for All’ by covering remaining uninsured that are not part of any other health schemes.
However, the scheme was unable to attract the people at the beginning itself and further failed to retain those who had been part of the policy. At beginning of the policy year 2017-18, only 64,049 families out of 32 lakhs had joined the scheme and contributed premium was Rs 19.3 crores, while for the renewal policy year 2018-19, the number of families being part of the scheme is declined to 13,929 and contribution of premium is Rs 3.7 crores. This shows that the people are neither willing to take nor to continue under the scheme.
Due to this reason, the scheme sustainability has been doubted and it will gradually become inefficient. There are three possible reasons to explain this. Firstly, the premium of Arogya Raksha is high when compared to private insurance products available in the market. Even for Ayushman Bharat, government announced that the premium is fixed to Rs 1200 annually per family (which family size, has no limit) per year. But, public sector insurance companies asked the government to raise the premium of at least Rs 2400 per family per year. Notably, the Ayushman Bharat covers pre-existing diseases but Arogya Raksha does not. This indicates the premium of Arogya Raksha is high and unaffordable. Secondly, the beneficiaries whose claims had been rejected under the pre-existing diseases or any other clause now may not go for policy renewal.
And lastly, the scheme is voluntary in nature; technically a greater chance of adverse selection (risky people show more interest over healthy people) leads to increase in the cost of the scheme to pay claims. For instance, South Korea is succeeded to achieve the universal coverage by mandatory law through policy legislature in a phased manner and for each phase, the state has targeted a section of the society. This policy mandate helped to minimise adverse selection, increase pool size and distribute the risk across all the people; which are an essential principal of insurance to work efficiently. However, the Arogya Raksha scheme is introduced without proper analysis and clearly a failure of an administration.
Moreover, healthy people are not choosing this scheme either due to high premium or felt no risk; the unhealthy risk proportion of the pool will be increased and the overall size of the pool will be decreased. When the size of the pool decreases, then the costs of the insurance premium will be increased. If the premium is high, then who would be willing to join in Arogya Raksha health scheme? Hence, it is time to analyse not only at ground level, but also at administrative level to find out the reasons why the people are not interested to join under this policy for not only to sustain, but also to achieve Arogya Andhra (Health for All).