8th Pay Commission Set to Transform Central Employee Benefits, New Health Insurance Scheme in the Works

Major Relief Expected for Crores of Central Government Employees and Pensioners

NEW DELHI — In a significant development for over one crore central government employees and pensioners, the Government of India has officially announced the formation of the 8th Pay Commission. Alongside expected salary revisions, the commission is also anticipated to bring sweeping reforms in allowances, pension structures, and crucially, healthcare benefits.

One of the key agendas likely to be addressed is the overhaul of the Central Government Health Scheme (CGHS), a system that has faced long-standing criticism for limited accessibility and outdated infrastructure.

CGHS May Be Replaced by a Modern Insurance-Based Healthcare Scheme

According to sources within the Ministry of Health, discussions are underway to replace CGHS with a more efficient, insurance-based model tentatively named the Central Government Employees and Pensioners Health Insurance Scheme (CGEPHIS). If implemented, the new scheme would be administered through IRDAI-approved insurance providers, offering broader coverage, especially for employees and pensioners residing outside urban CGHS zones.

Both the 6th and 7th Pay Commissions had flagged the limitations of CGHS and recommended a modernized approach. The 7th Commission emphasized the need for a comprehensive health insurance model with provisions for cashless treatment in private and empaneled hospitals under CS(MA) and ECHS frameworks.

8th Pay Commission: A Turning Point in Policy Reform

The formation of the 8th Pay Commission marks a critical policy move aimed at aligning compensation and welfare benefits with current economic realities. While salary revisions remain a top priority, a strong focus is also being placed on employee welfare, including medical facilities, retirement benefits, and rural coverage.

The commission’s recommendations are expected to consider inflation, cost of living, and the growing need for dependable healthcare access. Officials suggest that the CGEPHIS proposal could be one of the most transformative health policy shifts for central employees in decades.

Although there is no official confirmation yet on the rollout of the new health scheme, stakeholders across departments are optimistic that the 8th Pay Commission will pave the way for long-awaited healthcare reforms.

What’s Next?

The Pay Commission is expected to start consultations in the coming months, with a final report likely to be submitted by mid-2026. If the healthcare overhaul is approved, central employees and pensioners could gain access to a far more robust, reliable, and inclusive health insurance model — potentially replacing the outdated CGHS system entirely.