The central government kickstarted the year by announcing the formation of the 8th Pay Commission, a body tasked with evaluating and recommending adjustments in salaries, pensions, and other benefits for central government employees and pensioners. While salary revision is the most anticipated part, the commission’s responsibilities go far beyond just recommending pay hikes.
Many are unaware that pay commissions also review allowances, perks, and employee welfare schemes such as healthcare. Over the years, one key area flagged for reform is the Central Government Health Scheme (CGHS).
The Central Government Health Scheme (CGHS) provides affordable and accessible medical services to central government employees, pensioners, and their families. Services include outpatient consultations, inpatient treatments, diagnostic services, and pharmacy benefits.
Despite its comprehensive design, CGHS has struggled with limited reach, especially in Tier 2 and Tier 3 cities. Many beneficiaries live in regions where CGHS facilities are unavailable or under-equipped, leading to persistent dissatisfaction among pensioners and employees.
The 6th Pay Commission had proposed an optional health insurance scheme, allowing employees to enroll voluntarily by paying a fixed contribution. The commission further recommended:
Making the scheme mandatory for new recruits.
Ensuring coverage for retirees post-implementation.
The 7th Pay Commission took a stronger stance, stating:
“Health insurance is the most suitable option for providing long-term and better medical protection to all employees, pensioners and their families.”
It advocated for immediate implementation and also addressed the issue of pensioners outside CGHS coverage. The panel recommended:
Empanelment of CS(MA) and ECHS hospitals under CGHS for cashless treatment.
Strengthening CGHS administrative infrastructure to accommodate these changes.
CS(MA): Caters to serving central government employees.
ECHS: Covers ex-servicemen and their dependents via a network of polyclinics and empanelled hospitals.
In January 2025, reports emerged suggesting that the Health Ministry might finally act on long-standing recommendations. A new insurance-based health scheme is being considered to replace CGHS. Tentatively named the Central Government Employees and Pensioners Health Insurance Scheme (CGEPHIS), this policy could be:
Run through insurance providers registered with IRDAI.
Designed to provide nationwide coverage, including in remote areas.
“Despite the government’s interest, the scheme has not been implemented yet.”
Currently, no official confirmation has been given, but expectations are high with the 8th Pay Commission’s formation.
As the 8th Pay Commission begins its work, the spotlight is not only on salary revisions but also on long-pending reforms in employee welfare. If CGEPHIS becomes a reality, it could revolutionize medical access for millions of government workers and retirees.
“Now that the 8th Pay Commission is announced and the proposed panel will start its work soon, it will be interesting to see if the new commission is able to solve this age-old issue or not.”
As the 8th Pay Commission begins its work, expectations are running high among central government employees and pensioners—not just for salary revisions, but for long-overdue reforms in healthcare access. The possibility of replacing the decades-old CGHS with a modern, insurance-based scheme like CGEPHIS marks a pivotal moment.
Previous pay commissions have consistently highlighted the limitations of CGHS, especially its inadequate reach in smaller towns and rural areas. By transitioning to a more inclusive and scalable insurance model regulated by IRDAI, the government could ensure better and more uniform healthcare coverage across the country.
If implemented, this reform could offer cashless treatments, extended coverage, and a streamlined healthcare experience for both current employees and retirees. With healthcare becoming more critical than ever, this move could be one of the most employee-centric outcomes of the 8th Pay Commission—bringing relief, inclusivity, and hope to lakhs of beneficiaries nationwide.