Straight from the Specialists
(Any opinions expressed here are those of the author, and not necessarily of Reuters)
The more I think about it, the more I am convinced that the direct cash transfer scheme is a money saver for the government and the taxpayer. A direct parallel is the way insurance companies handle claims in health insurance plans.
There are two players, the policyholder who makes the claim and the insurance company which makes a payout. There are two ways in which payment is made by an insurance company while honouring claims. One in which the treatment cost is borne by the policyholder who then applies for reimbursement from insurance companies. And the other is the cashless facility in which the cost of treatment is directly borne by the insurance company.
The first is a nightmare scenario for insurance companies and we saw public sector insurance companies backing out of cashless treatment in several hospitals. It took a lot of time and negotiations to sort this mess out and reinstate the cashless facility.
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The government’s cash transfer scheme (CTS) has been accepted by economists as the most efficient method of delivering subsidies to the poor. This became possible with the identification of the poor after the introduction of “Aadhaar” or unique identity scheme. The scheme is going to be implemented from the beginning of 2013.