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| | Health
Insurance for the Poor |
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For people living below
poverty line, an illness not only represents a permanent threat to their income
earning capacity, in many cases it could result in the family falling into a
debt trap. When the need to get the treatment arises for poor families they
often ignore it because of lack of resources, fearing wage loss, or wait till
the last moment when it’s too late. Even if they do decide to get the desired
health care it consumes their savings, forces them to sell their assets and
property or cut other important spending like children’s education.
Alternatively they have to take on huge debts. Ignoring the treatment may lead
to unnecessary suffering and death while selling property or taking debts may
end a family’s hope of ever escaping poverty. |
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These tragic outcomes can be
avoided through a health insurance which shares the risk of a major health shock
across many households by pooling them together. A well designed and implemented
health insurance may both increase access to healthcare and may even improve its
quality over time. |
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| | Genesis
of RSBY |
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In the past Government have
tried to provide a health insurance cover to selected beneficiaries either at
the State level or National level. However, most of these schemes were not able
to achieve their intended objectives. Often there were issues with either the
design and/ or implementation of these schemes. |
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Keeping this background in
mind, Government of India decided to design a health insurance scheme which not
only avoids the pitfalls of the earlier schemes but goes a step beyond and
provides a world class model. A critical review of the existing and earlier
health insurance schemes was done with the objective of learning from their good
practices as well as seeks lessons from the mistakes. After taking all this into
account and also reviewing other successful models of health insurance in the
world in similar settings, Rashtriya Swasthya Bima Yojna was designed. |
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Rashtriya Swasthya Bima
Yojana or RSBY started rolling from 1st April 2008. |
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| | What
is RSBY? |
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RSBY has been launched by
Ministry of Labour and Employment, Government of India to provide health
insurance coverage for Below Poverty Line (BPL) families. The objective of RSBY
is to provide protection to BPL households from financial liabilities arising
out of health shocks that involve hospitalization. Beneficiaries under RSBY are
entitled to hospitalization coverage up to Rs. 30,000/- for most of the diseases
that require hospitalization. Government has even fixed the package rates for
the hospitals for a large number of interventions. Pre-existing conditions are
covered from day one and there is no age limit. Coverage extends to five members
of the family which includes the head of household, spouse and up to three
dependents. Beneficiaries need to pay only Rs. 30/- as registration fee while
Central and State Government pays the premium to the insurer selected by the
State Government on the basis of a competitive bidding. |
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| | Unique
Features of RSBY |
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The RSBY scheme is not the
first attempt to provide health insurance to low income workers by the
Government in India. The RSBY scheme, however, differs from these schemes in
several important ways. |
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Empowering the beneficiary
– RSBY provides the participating BPL household with freedom of choice
between public and private hospitals and makes him a potential client worth
attracting on account of the significant revenues that hospitals stand to earn
through the scheme. |
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Business Model for all Stakeholders –
The scheme has been designed as a business model for a social sector scheme with
incentives built for each stakeholder. This business model design is conducive
both in terms of expansion of the scheme as well as for its long run
sustainability. |
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Insurers – The
insurer is paid premium for each household enrolled for RSBY. Therefore, the
insurer has the motivation to enroll as many households as possible from the BPL
list. This will result in better coverage of targeted beneficiaries. |
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Hospitals – A hospital has the
incentive to provide treatment to large number of beneficiaries as it is paid
per beneficiary treated. Even public hospitals have the incentive to treat
beneficiaries under RSBY as the money from the insurer will flow directly to the
concerned public hospital which they can use for their own purposes. Insurers,
in contrast, will monitor participating hospitals in order to prevent
unnecessary procedures or fraud resulting in excessive claims. |
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Intermediaries – The inclusion
of intermediaries such as NGOs and MFIs which have a greater stake in assisting
BPL households. The intermediaries will be paid for the services they render in
reaching out to the beneficiaries. |
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Government – By paying only a
maximum sum up to Rs. 750/- per family per year, the Government is able to
provide access to quality health care to the below poverty line population. It
will also lead to a healthy competition between public and private providers
which in turn will improve the functioning of the public health care providers. |
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Information Technology (IT) Intensive –
For the first time IT applications are being used for social sector scheme on
such a large scale. Every beneficiary family is issued a biometric enabled smart
card containing their fingerprints and photographs. All the hospitals empanelled
under RSBY are IT enabled and connected to the server at the district level.
This will ensure a smooth data flow regarding service utilization periodically. |
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Safe and foolproof – The use
of biometric enabled smart card and a key management system makes this scheme
safe and foolproof. The key management system of RSBY ensures that the card
reaches the correct beneficiary and there remains accountability in terms of
issuance of the smart card and its usage. The biometric enabled smart card
ensures that only the real beneficiary can use the smart card. |
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Portability – The key feature
of RSBY is that a beneficiary who has been enrolled in a particular district
will be able to use his/ her smart card in any RSBY empanelled hospital across
India. This makes the scheme truly unique and beneficial to the poor families
that migrate from one place to the other. Cards can also be split for migrant
workers to carry a share of the coverage with them separately. |
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Cash less and Paperless transactions –
A beneficiary of RSBY gets cashless benefit in any of the empanelled hospitals.
He/ she only needs to carry his/ her smart card and provide verification through
his/ her finger print. For participating providers it is a paperless scheme as
they do not need to send all the papers related to treatment to the insurer.
They send online claims to the insurer and get paid electronically. |
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Robust Monitoring and Evaluation –
RSBY is evolving a robust monitoring and evaluation system. An elaborate backend
data management system is being put in place which can track any transaction
across India and provide periodic analytical reports. The basic information
gathered by government and reported publicly should allow for mid-course
improvements in the scheme. It may also contribute to competition during
subsequent tender processes with the insurers by disseminating the data and
reports. |
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About
the Scheme
