In a significant development, the Maharashtra state government has decided to call off its Rs 3,000 crore contract with United India Insurance (UII), which was responsible for implementing the revamped Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY).
As per reports, the government led by Chief Minister Eknath Shinde has now decided to pay for universal health coverage directly without any insurance company in between. The Centre contributes around 60 per cent of the premium while the balance is paid by the state.
The state government’s transition from the Insurance Model to the Trust Model for managing medical claims marks a significant shift after 12 years of operating under the previous scheme. Effective September 14, the government will take on the responsibility for settling these claims directly.
Previously, the cashless program was overseen by United India Insurance, which managed the process of claim settlements for medical treatments received by residents. However, the Maharashtra government found the insurer’s performance unsatisfactory and terminated the deal.
Ramesh Chavan, CEO, Mahatma Phule Jan Aarogya Yojana, has said that the contract was terminated because of unsatisfactory response from the insurance company. “After we signed the contract in June, the company was to pay Rs 93 crore performance bank guarantee which they did not pay. Additionally due to increase in claim amount last year, the company was delaying the payment and we started receiving a number of complaints from the hospital.”
Mahatma Jyotiba Phule Jan Arogya Yojana 2.0
In the recent state budget, the Maharashtra government introduced a revamped version of the Mahatma Jyotirao Phule Jan Arogya Yojana (MJPJAY) health insurance programme, which came into effect on July 1. This latest initiative offered a maximum coverage of Rs 5 lakh for cashless medical treatment to all state residents, regardless of their income levels. The revised MJPJAY encompasses around 2.72 crore families and provides access to about 1,900 hospitals, among which 1,450 are private healthcare facilities.
Under the new universal health coverage, the state established a premium of Rs 1,300 per family for approximately 2.38 crore families, amounting to a total population of 12.3 crore. The total insurance premium surpassed Rs 3,000 crore, designated to be paid to UII. Notably, the family coverage has been elevated from Rs 1.5 lakh to Rs 5 lakh.
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UII was responsible for covering up to Rs 1.5 lakh per family, while the remaining amount is to be overseen by the state agency State Health Assurance Society (SHAS).
MJPJAY 2.0, a comprehensive health coverage program, was designed to extend universal healthcare access to all eligible state residents possessing valid ration cards and domicile certificates.
Launched in the year 2020, this initiative catered specifically to economically vulnerable segments of society, ensuring broad coverage for the entire state population. It offered seamless, cashless healthcare services for specified illnesses via a network of healthcare providers encompassing both public and private sectors.
Under the aegis of the State Health Assurance Society (SHAS), an annual insurance premium of Rs 797 per family was remitted, amounting to nearly Rs 1900 crore in total annually. This sum was disbursed in quarterly phases to the United India Insurance company over the past four fiscal years.
