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India: Health insurance plan for poor families seen as falling short

Source: Asia Insurance Review | Nov 2017

India Life & Health

The government-run Rashtriya Swasthya Bima Yojana (RSBY), launched in 2008, is seen to have failed in its mission to protect poor households from financial risks due to health spending.
   Under the RSBY, Below Poverty Line or BPL households are entitled to hospitalisation coverage of up to INR30,000 (US$460) annually. The programme functions through a network of about 8,700 hospitals and 14 insurance companies. 
   RSBY has funded more than 14 million hospitalisations so far. This is less than two million hospitalisations per year, barely 3% of the total annual hospitalisation cases in the country and only about 10% of annual hospitalisation cases among the poor, notes Dr Anup Karan, a health economist with the Indian Institute of Public Health, Public Health Foundation of India.
Inadequate outreach
One problem with the RSBY is insufficient outreach. There are about 36 million families enrolled in the RSBY. That is about 60% of all poor families in the 520 districts where the programme has been implemented among of India’s 625 districts. To identify households eligible for the scheme, the health ministry used BPL data from censuses conducted by state governments, most of which were conducted in 2002-2003. The BPL list omits many poor households, particularly those in remote areas, but includes several non-poor households. 
   In addition, providing INR30,000 per year for the healthcare needs of a family – the average size of which may be four people – is grossly inadequate. In India, the average expenditure in 2014 for a single hospitalisation at a private hospital was about INR26,000, according to data from the National Sample Survey Organisation. 
   The INR30,000 limit was fixed in 2008 and has not been revised, even though hospitalisation costs have almost doubled since then.
   The RSBY does not provide coverage for outpatient care. But, outpatient care is the overwhelming component accounting for 70% of healthcare in India. 
   In general, people enrolled under the RSBY have a poor understanding of how it works. In addition, doctors might over-prescribe medicines and recommend unnecessary treatment. Providing health insurance without regulating practices of the health providers usually limits success of these schemes, said Dr Karan. A 
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