Medical insurance in India for the elderly - I

Health Scheme for the Central Government pensioners

(This is the first part of a multi-part post on this subject. This is not meant to be a comprehensive source of information on various insurance schemes for the aged in India as of now, but rather tries to offer somewhat of a critical appraisal from a user perspective cutting through the received wisdom and advertisement blurbs. The present one talks about one of the most important government funded schemes, a subsequent post will take a look at some of the other health insurance policies available in the market.)

A major escalation in the drug prices and the cost of an increasingly privatized health care in India that has occurred over the last two decades and the liberalized economic policies pursued by the government are significantly correlated, notwithstanding the expected murmurs of protests from the liberalization fetishists against this inference. There seems to be enough wisdom within the government (PMO/panning commission) and advice from outside propelling the government propelling it to get out of the welfare commitment to supply public health care as much as possible and allow private health care providers to take its place and let the market enjoy a free run. This is more than clear both by the various policy pronouncements and through experiences on the ground. Ample statistics exist in the public domain to demonstrate the ballooning of what has been rather graphically described as the OUT-OF-POCKET (OOP) expenditure for health (generally accepted to be about 70% of the total) for the majority of Indians. This is a significant and potentially disastrous burden especially for the poor and of course the elderly and may lead to penury and destitution. I have had occasions to discuss these issues in some of the earlier posts in seinjuti (see, “Drug prices escalation potential in India”, November 5, 2011, “OOP health expenses of India”, November 6, 2011) and more recently elsewhere (“Price of health”, silvertalkies, October 6, 2012).

In this connection, one has only to look at the dwindling utility and effectiveness of the Central Government Health Scheme (CGHS). This is one among the few relatively well-organized government sponsored schemes through which a modicum of medical insurance benefit is provided to the employees (and their dependents, total beneficiaries estimated to be about 4 million or so) working in various central government departments and offices all over the country and autonomous institutions like CSIR under the government of India. CGHS scheme and the rules governing it [under the broader Central Services (Medical Attendance) or the CS (MA) Act of 1954] cover both serving government employees and the pensioners. For the latter, since we are concerned here about the elderly, this service is usually available after retirement either by paying a sort of annual premium or (what is becoming the norm more recently) by making a one-time lump sum payment. In this sense this is like a usual medical insurance offered by private companies for the elderly.

Over the last several years, because of the deliberate reduction (as a government policy) in the CGHS approved rates for a large number of diagnostic tests and procedures (both taken as in-patients or in the OPD) and generally not accepting the market rates charged by good private hospitals, many of these are opting out of the CGHS scheme or are being de-recognized by the government. Even where the treatment in some of these hospitals are not completely disallowed, the CGHS insured has to agree to pay the difference between the rates charged by the hospital and those allowed under the CGHS schedule, even before the admission or undergoing a procedure. Hospital bills may also create such differentials due to the price differences between branded drugs sometimes prescribed by the hospitals and the equivalent generics allowed within the CGHS schedule. The same is true about some critical prosthetics (certain high end drug eluting coronary stents used in angioplasty are ruled out under the revised CGHS schedule). More often than not this may mean 40-80% in OOP. Alternatively the insured has to go and get treated at the restricted number of CGHS recognized hospitals where the test and the treatment facilities may not be up to the mark or one does not get to choose his/her preferred or recommended doctors (who are not necessarily associated with or may not choose to operate in these latter hospitals).

The service is operated either as a cash-less (or the direct payment) facility or as a reimbursable one. In the former the pensioner produces document authorizing the hospitalization and the treatment (office memo, letter from an authorized medical attendant, etc) acceptable to the hospital whereupon the treatment is provided without charging the CGHS beneficiary (except for the differential payments explained above that can be substantial in some cases and some hospitals). At the end of the treatment, the hospital sends bills, details of treatment and other documents to the concerned government office/authority for verifying and accepting the expenditure and finally sanctioning the payment as per its accounts office calculations. In case the office disagrees with some parts of the bill in the sense that these are not admissible under the current CGHS schedule these amounts are recovered from the pensioner.

Many elderly pensioners, especially those not having much human support system (relatives and friends) often find obtaining the correct authorization document from the CGHS dispensaries or the city headquarter time consuming and not devoid of harassment, especially as these offices are not always close to their residence or near the hospitals of interest.  

In the case of the reimbursable route, the pensioner makes the payment upfront to the hospital and submits the bills (including complete break up of all expenditure) and the supporting documents like test reports, prescriptions for medicines and tests   appending the same to the application to his/her accounts office. The latter after scrutiny and verification with the hospital, reimburse the expenditure, which could be much lower than the actual depending on the admissible rates of treatment, recognition level of the hospital where the treatments are taken. It may strain one’s credulity, but it is true that if a pensioner, because of his/her salary level at the time of retirement has the medical card branded, for instance, as “semi-private”, he or she would not just be entitled to a hospital accommodation in the semi-private ward or some other below that grade, entitlements for many of the critical treatment costs (including surgical or other procedure charges) are also graded in terms of admissible charges under the CGHS schedule. If one uses a higher than entitled accommodation for some unavoidable reasons or that the hospital does not allow for such gradations of charges and insist on levying standard charges the differences are not reimbursed and the pensioner has to make this payment. Thus it is not difficult to appreciate that despite availing of a government sponsored medical insurance the pensioner may end up incurring substantial OOP expenses.

Anecdotal evidence (based on the actual experiences of many pensioners) indicates that the claim settlement in the case of reimbursement often gets delayed by the cavalier attitude of the hospitals in providing incomplete documentation along with the final bills and completely rigid and often indifferent and non-cooperative handling of such deficiencies in the reimbursement applications by the government accounts offices. Though the pensioner is not really to blame, he/she must personally at his/her own cost get the required documents from the hospital billing department in order to expedite the reimbursement process.

The bright side of the CGHS scheme for the pensioners is that the OPD treatments and tests taken at and medicines prescribed by the designated CGHS dispensaries are practically free of cost (covered within the terms of the scheme). Similar tests and/or treatments can be availed at the recognized hospitals or by doctors from a CGHS empanelled list of the so-called “authorized medical attendant”s or the AMAs  generally at subsidized prices. Unfortunately, however, such dispensaries and AMAs are comparatively few in number and concentrated more in the main cities (about 25 or so) considering the countrywide validity of the scheme.

The number of recognized (empanelled) hospitals is coming down by the year. Many of these being government hospitals, which have to cater to the disproportionately large number of patients especially the poor and those from the lower strata of the population, are ill equipped, lack sufficient facilities, cleanliness and hygiene, important medicines, blood products and sometimes even good doctors. Many pensioners wishing to avail the scheme perforce have to choose to go to these hospitals.