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.
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.
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.
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.
Rashtriya Swasthya Bima Yojana or RSBY started rolling from 1st April 2008.
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.Click here for RSBY report