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A Minimum Pay, for Maximum Health!

Seventh pay commission

The Seventh Pay Commission, headed by Justice A.K Mathur, was formed in February 2014 by the previous government. The government forms a pay commission every ten years with the objective of revising the pay scales of Central Government personnel. These recommendations are most often adopted by the states with minor modifications.

The minimum basic salary at current levels is INR 7,730 along with Grade pay without dearness allowance and other allowances.

In September 2015, the Seventh Pay Commission proposed a minimum basic salary of INR 20,000 per month for Central Government personnel. As a result of this proposition, the average basic salary for a majority of government personnel will rise by 30% to 40%.

seventh pay commission

With the Seventh Pay Commission, the average basic salary will rise by 30%-40%. | Photo Courtesy: Newstodayonline

The proposed competitive minimum salary reflects positively on the socialist approach of the government. Moreover, the increase will bring in more employees in the minimum salary bracket. The pay panel is further considering reducing the disparity between the highest and the lowest paid employees to bring equality.

The unavailability of upfront cash limits the accessibility to good healthcare services for retirees living in non-CGHS areas.

In another positive move, the Seventh Pay Commission introduced health insurance plan for government employees. This health insurance plan will benefit over 47 lakh Central Government personnel and about 52 lakh retired pensioners. The insurance scheme proposes to cover indoor and outdoor patients for maximizing the benefits. The commission has proposed strengthening the Central Government Health Scheme (CGHS). It will enable retired personnel to access empanelled healthcare providers and avail cashless treatment where CGHS medical facilities are unavailable. Currently, such users are required to pay the cost upfront and later file claims. The unavailability of upfront cash limits the accessibility to good healthcare services for retirees living in non-CGHS areas.

Role of Insurance Providers

The Seventh Pay Commission proposes to include the insurance providers in this scheme to offer the best health insurance policy to the users. The insurers are advised to launch feasible health covers that will maximize the benefits for retired personnel and existing employees. Furthermore, the insurance regulator Insurance Regulatory and Development Authority (IRDA) is expected to make it mandatory for insurers to offer basic coverage to all government personnel and retirees. This cover would be made available irrespective of the medical condition and age of the user and insurance companies would be restricted from making profits on these plans.

Combining Various Medical Networks

Several healthcare schemes are presently available for Central Government personnel. Some of these include CHGS, Railways Employees Liberalized Health Scheme (RELHS), and Ex-Servicemen Contributory Health Scheme (ECHS). Under the new proposal, the commission wants to provide a strong network of healthcare facilities by combining these various schemes. This merger would make it easier for the users to have quick access to healthcare. Furthermore, the commission proposes to strengthen the administrative capacities of the various centers to resolve the grievances of the users.

Prescribed Contribution

According to the Seventh Pay Commission, the optimal route for providing complete coverage for all personnel is a mediclaim scheme for government employees and pensioners. The previous commission had recommended introducing a voluntary scheme where existing personnel and retirees could avail the coverage by paying the prescribed contribution. It further recommended making contribution mandatory for all employees joining services after the introduction of this scheme.

Retirement plans and health insurance are influential factors in retirement planning. Health cover is important not only for government personnel but also for every individual. Rising healthcare costs, increasing lifestyle-related illnesses have also resulted in the increase in number of people opting for critical illness insurance, and spurt in inflation makes it necessary for every person to avail a health policy. This insurance provides financial security in case of major illness and prolonged treatments.

Featured Image Credits: Passel

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