PARIPOORNA MEDICLAIM AYUSH BIMA A Policy Response That Reveals the Structural Crisis of CGHS
By Lokanath Mishra
I. Introduction
The Government of India has recently introduced an optional health insurance product titled “Paripoorna Mediclaim Ayush Bima”, made available exclusively to beneficiaries of the Central Government Health Scheme (CGHS). The announcement, issued by the Department of Financial Services (DFS), Ministry of Finance, presents the scheme as a supplementary mechanism intended to enhance healthcare access and financial protection for Central Government employees and pensioners.
On its face, the initiative appears progressive and responsive to rising healthcare costs. However, a closer and more critical examination reveals that the scheme is not merely an additional welfare measure. Rather, it constitutes an implicit acknowledgment by the State that CGHS, in its present form, has failed to deliver effective, cashless, and dignified healthcare, especially to pensioners and senior citizens. The scheme, therefore, raises significant questions of constitutional responsibility, administrative accountability, and the evolving nature of social security in India.
II. Salient Features of Paripoorna Mediclaim Ayush Bima
Paripoorna Mediclaim Ayush Bima has been structured as an add-on insurance product, without formally replacing CGHS entitlements. Beneficiaries may opt into the scheme upon payment of premium, while remaining enrolled under CGHS.
The principal features include:
• Indemnity-based in-patient hospitalization coverage within India
• Sum insured options of ₹10 lakh or ₹20 lakh per policy
• Coverage for a maximum of six family members
• Room rent ceilings capped at 1% of the sum insured per day for general wards and 2% per day for ICU care
• Pre-hospitalization expenses for 30 days and post-hospitalization expenses for 60 days
• Coverage for AYUSH treatments up to 100% of the sum insured for in-patient care
• Coverage for modern medical procedures up to 25% of the sum insured, with an optional rider for enhanced coverage
• A co-payment structure allowing beneficiaries to choose between 70:30 or 50:50 cost-sharing
• A cumulative bonus of 10% per claim-free year, subject to a maximum of 100%
• Premium discounts of approximately 28% and 42% compared to comparable retail products
• GST exemption, aimed at improving affordability
The policy is proposed to be made available through New India Assurance Company Limited, both online and through physical offices.
III. The Policy Context: Why Such a Scheme Has Become Necessary
The emergence of this insurance product cannot be understood in isolation. It is the direct consequence of a widening disconnect between CGHS package rates and contemporary healthcare economics.
In the present healthcare market, CGHS rates are substantially lower than actual hospital billing practices. Even empanelled private hospitals routinely demand advance deposits ranging from ₹2 lakh to ₹5 lakh for ordinary procedures, with significantly higher amounts for intensive or specialised care. Beneficiaries are frequently compelled to sign undertakings, arrange emergency funds, and endure delayed discharges.
Reimbursements under CGHS, when eventually granted, are limited to prescribed ceilings, forcing beneficiaries to absorb substantial out-of-pocket expenditure. These deficiencies have been consistently highlighted through representations, grievances, and litigation over several years.
Instead of undertaking structural reform—such as:
• periodic revision of CGHS rates,
• strict enforcement of empanelment conditions,
• modernisation of OPD services and medicine supply, or
• strengthening grievance redress mechanisms,
the Government has opted for an insurance-based corrective, limited only to CGHS beneficiaries. This design choice itself demonstrates that the scheme is not a general welfare initiative, but a compensatory mechanism intended to bridge the gap created by CGHS’s operational inadequacies.
IV. CGHS: A Statutory and Contributory Right
It is essential to underline that CGHS is not a discretionary welfare grant. It is a mandatory contributory scheme for Central Government employees in notified cities. Employees contribute throughout their service, and at the time of retirement are required to make a substantial lump-sum contribution for lifetime coverage.
This contribution was extracted on a clear and unequivocal representation by the State: that medical security in post-retirement life would be assured.
Under constitutional jurisprudence, such representations give rise to:
• the doctrine of legitimate expectation,
• the principle of promissory estoppel, and
• the obligation of non-arbitrariness under Article 14.
The Supreme Court has repeatedly affirmed that pensionary and post-retirement benefits are not bounties, but deferred wages and enforceable rights (D.S. Nakara v. Union of India, (1983) 1 SCC 305; State of Jharkhand v. Jitendra Kumar Srivastava, (2013) 12 SCC 210).
Requiring beneficiaries—particularly senior citizens—to purchase insurance to obtain meaningful healthcare protection amounts to double financial extraction for the same statutory promise, a practice incompatible with constitutional governance.
V. Insurance Economics and the Burden on the Elderly
Contemporary health insurance markets impose disproportionate financial burdens on senior citizens. Pensioners commonly suffer from chronic, age-related conditions such as diabetes, hypertension, cardiac ailments, and arthritis.
Under prevailing market conditions, a retired couple aged 70–75 years may be required to pay ₹1 lakh to ₹2.5 lakh annually for a ₹10–20 lakh cover, in addition to:
• co-payment obligations of 30% to 50%,
• room rent caps,
• treatment sub-limits.
Even after paying substantial premiums, beneficiaries remain exposed to high out-of-pocket expenses. Such an arrangement cannot be equated with social security; it merely transfers financial risk from the State to individuals least capable of bearing it.
VI. Impact on Serving Employees
CGHS enrollment is compulsory for serving employees in CGHS-covered cities. The introduction of Paripoorna Mediclaim Ayush Bima implicitly acknowledges that CGHS coverage is insufficient on its own.
This results in a constitutionally anomalous framework:
• compulsory participation in an inadequate system, and
• optional payment for adequacy.
Such a structure raises serious concerns under Article 14 (arbitrariness) and Article 21 (right to health and dignity), as recognised in Consumer Education and Research Centre v. Union of India (1995) 3 SCC 42 and Paschim Banga Khet Mazdoor Samity v. State of West Bengal (1996) 4 SCC 37.
VII. Pensioners: The Most Affected Class
CGHS pensioners are denied Fixed Medical Allowance (FMA) solely on the ground of CGHS coverage. Having already contributed during service and at retirement, they are left without any alternative support mechanism.
By compelling pensioners to purchase insurance to overcome CGHS deficiencies, the State effectively:
• converts CGHS into a subscription-based system without enforceable assurance, and
• shifts institutional failure onto the most vulnerable stakeholders.
This approach is incompatible with the welfare-state mandate embedded in the Preamble and Articles 38, 39(e), 41, and 47 of the Constitution.
VIII. Constitutional and Policy Implications
The very introduction of Paripoorna Mediclaim Ayush Bima constitutes an implicit policy admission that CGHS, as presently structured, no longer delivers effective healthcare protection.
Once such an admission exists, constitutional governance does not permit the State to:
• rectify systemic defects at the expense of beneficiaries, or
• impose additional financial burdens on pensioners who have already paid contributions and foregone FMA.
Healthcare for retired public servants forms an integral component of the right to life under Article 21, and any dilution of assured medical care fails the tests of reasonableness, fairness, and welfare orientation.
IX. The Way Forward: A Constitutionally Sound Alternative
If CGHS has become financially and administratively unsustainable, the Government must adopt a rational and equitable alternative:
• Paripoorna Mediclaim Ayush Bima should be made compulsory for all CGHS pensioners
• Entire premium must be borne by the Government / CGHS
• CGHS should function as the nodal authority managing the insurance
• Pensioners should not be subjected to co-payment for deficiencies arising from outdated CGHS rates.
Such a model would eliminate bureaucratic delays, arbitrary reimbursements, and uncertainty while ensuring genuine cashless care.
X. Conclusion
Paripoorna Mediclaim Ayush Bima is not merely a supplementary insurance product. It is a quiet confession that CGHS has failed to keep pace with medical and economic realities. Beneficiaries have long highlighted these shortcomings; the present scheme confirms their validity.
Having extracted lifelong contributions and denied Fixed Medical Allowance, the State cannot lawfully or morally compel pensioners to finance the correction of its own administrative failures.
Healthcare for retired public servants was never intended to be a commercial gamble.
It was promised as a guarantee.
A welfare State cannot disclaim that guarantee by shifting the burden onto those who have already paid the price.