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Central Government Employees Health Insurance Scheme – Latest Developments

Central Government Employees Health Insurance Scheme – Latest Developments as per the report in Indian Express

The much hyped Central Government Employees Personal Health Insurance Scheme (CGEPHIS)which was proposed by Health Ministry from the year 2009, as an alternate to presently existing Health related Schemes for Central Government Employees such as CGHS, Medical Attendance Rules etc, is still a non-starter for reasons known only to the Govt.

The following are the features of CGEPHIS :


  • All personnel of the Central Government including All India Service officers, serving, newly recruited, retired and retiring and others who are covered under the existing CGHS(Central Government Health Services)  and under CS (MA) [Central Services (Medical Attendance) Rules] Rules shall be offered Health Insurance Scheme  on voluntary or on compulsorily basis . This could be:
  • CGEPHIS shall be compulsory to new Central Government Employees who would be joining service after the introduction of the health Insurance Scheme.
  • CGEPHIS shall be compulsory to new Central Government retirees who would be retiring from the service after the introduction of the Insurance Scheme.
  • CGEPHIS would be available on voluntary basis for the existing Central Government Employees and pensioners serving in CGHS area/ covered by CGHS. In this case such serving Central Government Employees and Central Government existing Pensioners shall have to opt out of CGHS scheme. They will also have the option of choosing both CGHS and Insurance policy. In such case the total premium has to be born by the beneficiary.
  • CGEPHIS would also be available on voluntary basis for the existing serving employees and pensioners in non-CGHS areas not covered by CGHS. In this case such serving Central Government Employees and existing Pensioners (who have opted for CGHS facility) shall have to opt out of CGHS scheme. They will also have the option of choosing both CGHS and Insurance policy. In such case the total premium has to be born by the beneficiary.

The proposals relating to sum assured/policy limits, family size, age limit, Insurance coverage are as follows

Sums Insured / Policy Limits

The scheme shall provide coverage for meeting all expenses relating to hospitalization of beneficiary members up to Rs. 500,000/- per family per year subject to stated limits on cashless basis through smart cards. The benefit shall be available to each and every member of the family on floater basis i.e. the total reimbursement of Rs. 5 .00 lac can be availed by one individual or all members of the family. The document also says the Government has proposed to restrict the benefit in respect of Domiciliary hospitalization and Maternity to Rs.50,000/- for each admission

Family Size / Age Limit

  • Serving Employees: Self, spouse, two dependent children and dependent parents (New born shall be considered insured from day one).
  • Retired Employees: Self, spouse and one dependent child.
  • Additional dependent family member can be covered under the scheme by paying the fixed percentage of premium per additional dependent family member. The premium shall be borne by the beneficiary.
  • All beneficiaries shall be insured till survival.
  • The definition of dependent shall be as per guidelines issued by Central Government.

Insurance Coverage

In addition to the coverage afforded under a standard medical insurance policy, the following shall also be covered under CGEPHIS:

  • Pre-existing diseases
  • Maternity benefit
  • Day-one Coverage for all diseases
  • New-born babies
  • Pre and Post hospitalization cover of 30 days and 60 days respectively
  • Domiciliary Hospitalization

Now, as per the news flashed in the Indian Express, Health Ministry taken up CGEPHIS proposal to terminate CGHS.

The health ministry has moved a proposal for ending the Central Government Health Scheme (CGHS) in its current form and moving to an insurance-based scheme — the Central Government Employees and Pensioners Health Insurance Scheme (CGEPHIS) — in an apparent attempt to cut costs.

Instead of the government directly paying the medical bills of CGHS beneficiaries, the new scheme will be implemented through insurance companies registered with the Insurance Regulatory and Development Authority and selected through bidding.

Currently, under CGHS, government employees pay Rs 6,000 annually as fixed medical allowance (FMA). The new FMA for beneficiaries is yet to be calculated. While the government’s actual financial commitment will depend on bids and the new FMA, the ministry is working on a presumptive figure of Rs 14,000 per family, which works out to approximately Rs 1,000 crore annually.

The scheme will cover medical expenses up to Rs 5 lakh per family per year. Beyond that, the insurer will have to get clearance from the nodal agency on a case to case basis. An additional sum insured of Rs 10 crore in each of the four zones will be provided by the insurer as buffer for such cases. The CGHS in its present form does not have any annual cap, but each procedure has a prescribed maximum limit for reimbursement. While a note for the Expenditure Finance Committee (EFC) was circulated last year, a fresh proposal incorporating inputs from various departments including the DoPT, erstwhile Planning Commission and Ministry of Statistics and Programme Implementation has been sent to the finance pision of the health ministry.

While existing employees can choose between CGHS and CGEPHIS, the new scheme will be made compulsory for new employees.

Sources in the health ministry said the proposal dates back to 2011, when the committee of secretaries gave its in-principle approval.  The proposal was revived after the NDA government took charge. Former Health Minister Dr Harsh Vardhan, however, was opposed to the idea. According to sources, Vardhan was of the opinion that the change would actually mean a higher burden on the exchequer. The annual CGHS bill has increased in the past few years, rising from Rs 987.75 crore in 2008-09 to Rs 1755.62 crore in 2013-14. The average expenditure per beneficiary adds up to Rs 4,787 (which means about Rs 23,000 for a family of five) — Rs 11,955 for pensioners and Rs 2,096 for serving employees.

The total number of CGHS beneficiaries is 36,67,765. Besides serving and retired government employees, this includes former vice-presidents, former prime ministers, MPs and former MPs, sitting and retired judges of the Supreme Court, PIB accredited journalists, railway board employees, Delhi Police personnel in Delhi and employees and pensioners of 60 autonomous/ statutory bodies.

Under CGEPHIS, the OPD needs will be met by the FMA. While the CGHS covers only 25 cities, the new scheme will be pan-India. This would automatically increase the financial commitment. All diseases, including pre-existing ones, will be covered, and in case of transplants, the expenses incurred for the donor or processing of cadaver organ will also be covered. Interestingly, the Rashtriya Swasthya Bima Yojana, which was run by the labour ministry so far, will be under the health ministry from April 1, as it moves from an insurance-based scheme to a trust-based scheme.

Source: The Indian Express


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