Government-owned United India Insurance has won the contract to deliver the Tamilnadu government-sponsored health insurance scheme in the state that will add about Rs 750 crore to its premium income every year.

Though the Maharashtra government’s deal with National Insurance Company a few days ago for health insurance carried an annual premium of Rs 800 crore, it is expected to roll out only in phases, making this the largest government-sponsored health insurance scheme in the country.

The earlier scheme in Tamil Nadu floated by the previous DMK government was executed by Star Health and Allied Insurance company, which earned the company an annual premium of Rs 600 crore from the government.

Following a change in government, the earlier scheme was scrapped, and the new scheme invited bids only from public sector insurance companies among which Chennai-headquartered United India Insurance emerged successful.

The company already received the first quarterly premium installment of Rs 183.64 crore from the chief minister J Jayalalithaa on Tuesday, according to a statement from the state government.

Against the earlier scheme that provided coverage of up to Rs 1,00,000 for a year for a poor family of four members, the new scheme, named ‘Chief Minister’s Elaborate Medical Insurance Scheme’ expands the coverage to Rs 1,50,000 in cases of specific treatments and surgeries. The scheme also provides insurance coverage for 1,016 treatments and procedures, 113 follow-up procedures and 23 diagnostic procedures.

“Though the coverage is wider, we are confident of better claims management and viable operations, as we have a lot of safety mechanisms in place. The hospital network is also wider and includes many government hospitals too,” said G Srinivasan, chairman, United India Insurance to Financial Chronicle.

Apart from the central government-sponsored Raashtriya Swastha Bhima Yojana (RSBY), many states like Tamil Nadu and Maharashtra have a state government-sponsored health insurance scheme modelled on the successful ‘Rajiv Arogyasri’ introduced by the deceased former chief minister of Andhra Pradesh, YS Rajasekhara Reddy.

Though such schemes do not help the insurance companies much, monetarily, they provide a reach to the most remote towns and villages, which can eventually become targets for other products or services.

rsrividhya@mydigitalfc.com