insurance firm to run ESI plan without states

Friday 16, June, 2006 The World?s largest health insurance scheme, the Employees State Insurance Corporation (ESIC), will soon start running the ESI scheme by itself, divesting all state governments of the responsibility.

Politically, the move will allow the Centre to garner more brownie points on health insurance for low income earners in private sector jobs. The scheme has a whopping 3.7 crore beneficiaries, with the total number of family units covered at over 79 lakh. It runs in all states with the exception of the North-Eastern states, except Assam.

The pretext being forwarded for the move by the Centre is that the current health care delivery system was not satisfactory due to dual control in administration of the ESI scheme. The move will cost another Rs 400 crore.

The historic decision of taking over state governments? responsibility of running the ESI scheme, taken at the 136th meeting of the ESIC, will for the present, be restricted to states that volunteer for the take-over. Congress-ruled Maharashtra will be the first on the block to relinquish control of the health insurance scheme. But, sources said, the decision taken on Thursday will lead to the gradual take-over of the scheme in all states and Union Territories.

Justifying the decision, labour minister Chandrashekhar Rao said that the step was aimed at ?improving the health care delivery system? and that ?insured persons (workers) and their families would be immensely benefited.?

The ESI network includes 143 hospitals. They handle OPD cases of more than eight crore each year. More than 4.5 lakh beneficiaries are admitted for in-patient care to the hospitals.

Over the years, the scheme has been gradually expanded to cover more establishments. The Act was originally applicable to non-seasonal factories using power and employing 20 or more persons, but the threshold has been lowered to factories employing 10 or more persons and non-power using factories employing 20 or more persons.

Besides shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons also come under its ambit. The wage ceiling for coverage under the Act is Rs 7,500 per month, set in ?04.

Thursday?s meeting also decided to introduce a conditional amnesty scheme for the withdrawal of criminal cases, filed under Sections 84 and 85 of the ESI Act against erring persons and defaulting employers. Around 2.6 lakh employers come under the Scheme.

At present, the ESIC owns a whopping 2,213 acres of prime land and around 25,74,850 sq mt of built up space under hospitals, dispensaries, staff quarters and offices countrywide. The ESIC?s decision to consolidate and centralise administration and delivery of the core medical insurance scheme comes in tandem with plans to spruce up and develop more model hospitals under the ESI countrywide, in addition to the 143 existing hospitals.

OPD attendance at ESI institutions are more than eight crore each year. More than 4.5 lakh beneficiaries are admitted for in-patient care to ESI hospitals.

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