Ex-Servicemen Cover Pegged At Rs 860 Crore

The defence ministry will have to shell out Rs 860 crore annually towards insuring the outpatient treatment of 18 lakh ex-servicemen and their dependents (totalling 75 to 80 lakh).

This is under a scheme being worked out by the state-owned The New India Assurance Company which would offer ex-servicemen cashless out-patient treatment at specified hospitals and clinics.

Senior government officials stated that the proposal is in the final stage of acceptance and has gone to the Prime Minister's office (PMO).

Ex-servicemen today receive Rs 100-150 for medical treatment, together with their monthly pensions.

The scheme has already received approval from the Insurance Regulatory and Development Authority (IRDA).

 

Army hospitals fail to provide adequate facilities to cover the needs of existing servicemen as well as ex-servicemen, since serving people are given first priority there.

The state-owned insurer estimates a claim ratio of 75-80 per cent under the scheme. That is for every Rs 1 in premium, it will shell out 75-80 paise in claim settlement.

This is well under the existing high claim ratio of 130 per cent on Mediclaim policies. In many cases, this claim ratio is as high as 300-400 per cent as a result of corporate frauds and hospitals overcharging patients who state that they have insurance cover.

The state insurer, New India, is working out on a series of stringent checks and balances to ensure effective cost control, and check on claims. It has identified 201 centres to be established across the country where ex-servicemen would be given outpatient treatment.

New India is looking at tying up with third-party administrators (TPAs), which in turn would be affiliated to around 500 "preferred" hospitals.

The scheme being worked out includes necessary software, reinsurance treaty, infrastructure facilities, and TPA services to ensure cashless services and treatment. New India is in talks with global reinsurance companies to reinsure the scheme. To date, Mediclaim with its alarming claim ratios cannot be reinsured overseas.