Rashtriya Swasthya Bima Yojana (RSBY) was launched by Ministry of Labour and Employment, Government of India in 2008 to provide health insurance cover to Below Poverty Line population and informal sector workers of India. In 2013-14 budget, the benfits of RSBY is extended to few other categories like the rickshaw pullers, auto taxi drivers, and it budget allocation has been increased to 1137 Cr. The scheme is today the world’s largest medical insurance programme covering over 120 million poor people in the country. The objective of the scheme is to protect these families from shocks related to catastrophic expenditures on health by improving access to health and reducing out of pocket expenditure. Main Features of RSBY: • This is a Smart Card based cashless and paperless social health insurance scheme. • It provides annual hospitalisation cover up to Rs. 30,000 for a family of five members through health insurance companies. Families pay only a registration fee of Rs. 30 and get a RSBY smart card which helps in accessing empaneled hospitals across the country for in-patient treatment. • Transportation expenses up to Rs. 1,000 per year are provided in cash for travelling to the hospital. • All pre-existing diseases are covered from day one. There is no age limit to enrol in the scheme. • 75 % of the cost (premium) of the scheme is borne by Central Government (90% in case of Jammu & Kashmir and North-Eastern States) and the rest is borne out by respective State government. • State Governments can top-up the coverage amount beyond Rs. 30,000. • Started in few districts in 2008, the scheme has spread into 486 districts across 28 States and Union Territories as of December 2012. • The premium charged by insurance companies has large variations ranging from Rs. 224 to Rs. 745 per family per year in a district. The average premium which was Rs. 600 in 2008 has come down to Rs. 350 in 2012. • Around 12,000 hospitals are empanelled under RSBY to provide hospitalisation benefits to the enrolled members in RSBY – 70 per cent are private hospitals and 30 per cent are public hospitals. • Though almost all cases of hospitalization are covered, package rates have been fixed for around 1,100 procedures. RSBY has garnered an enviable position in India’s policy space. The United Nations Development Programme (UNDP) and International Labour Organization (ILO) picked it up as one of the top 18 social security schemes in the world.In June 2011, the World Bank came out with its first-ever review of social welfare policies in India. For most part, the review panned the policies for their faulty design and sloppy implementation. However, there was one exception—the Rashtriya Swasthya Bima Yojna (RSBY), or the national health insurance scheme. The RSBY has received rave reviews even from international organisations. The GIZ (or the German Agency for International Cooperation that, along with the World Bank, was involved in designing the scheme) in its January 2013 report has found that based on data from three states—Bihar, Uttarakhand and Andhra Pradesh—90 percent of the respondents were satisfied with the scheme. The criticism against RSBY is at two broad levels: • The first concern is that, in the absence of a strong primary and secondary health infrastructure, it increases the tendency among patients to get hospitalised at the first instance. As an off-shoot, it leads to increased frauds. Various studies and reports have shown how empanelled hospitals did not have adequate facilities, or how hospitals conducted unnecessary hysterectomies on patients to make easy money through the cashless insurance schemes. • Second, as more and more people use insurance to pay their bills, insurance companies will ask for higher premiums from the government. In time, this trend could make the scheme unviable. Should health care be provided through government channels or through giving out medical insurance? One public health expert says that while you could combine both approaches, it would be better if the government manages the demand. India has failed miserably in managing supply since its independence. Providing insurance not only gives the poor a chance to access private care but also provides a business case for private players to service remote areas.

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