RSBY expansion may take one of three routes

 A University of Chicago academic who is heading a study on the potential universal coverage of India’s first national health insurance scheme, the Rashtriya Swasthya Bima Yojana (RSBY), has said it will benefit a lot of people from different segments, but suggested a progressive subsidy model in the long-run, for the scheme to become more viable.

In a bid to provide citizens living below the poverty line (BPL) with health insurance cover, the government launched the RSBY in 2008, which successfully enrolled over 150 million beneficiaries by 2012.

The Centre’s aim was demand-side health intervention, reducing out-of-pocket expenditures, and incentivising providers to make healthcare available, especially to the poor.

In order to expand RSBY to other income groups (above poverty line — APL) in the future, the university’s study — Indian Health Insurance Experiment (IHIE) — is evaluating options to expand it. “The scheme will certainly benefit BPL households, but they lack knowledge about insurance, while APL households are aware of insurance and finance to some extent, and also value it. Both groups will benefit, but it is unclear to say who will benefit more,” Prof Anup Malani of the University of Chicago, who heads IHIE, told Deccan Herald.

Malani added that though the intention is universal coverage, “instead of the government paying the entire premium, the scheme may be progressively subsidised so that insurance may be provided to more people, depending on their ability to pay premium, and also, it may become economically viable.”

Presently, RSBY provides annual health insurance coverage of up to Rs 30,000 for BPL households, which takes care of secondary hospitalisation.

Members will have to pay a nominal Rs 30 during enrollment, with the Centre bearing 75 per cent of the annual premium of Rs 200, while the remaining 25 per cent is borne by respective state governments.

Coverage trends

Meanwhile, IHIE has integrated 11,000 APL households as samples. “There are three options through which we are exploring the expansion of RSBY. First, to provide the scheme free of cost to APL members, like those under BPL. Second, to provide it with greater premium. Third, to get APL members to buy the whole scheme. In the next two years, we will figure out the impact,” Malani explained.

The study looks at the total uptake of the scheme, awareness, and households availing healthcare services. While the uptake is 50-60 per cent among BPL, it is at an impressive 70-80 per cent among APL families.

“The idea is to help the government improve the scheme, getting more hospitals to participate, more insurance companies to come in, be accountable, and get people to value health insurance,” he added. 

Around $1.5 million funding has been received for IHIE from DFID, the University of Chicago, Northwestern University, and the International Growth Centre.