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Rashtriya Swasthya Bima Yojana (RSBY) is in poor health

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  • Rashtriya Swasthya Bima Yojana (RSBY) was launched eight years ago with the main objectives to provide financial coverage (or risk protection) by reducing such burden while enhancing use of healthcare
  • But, RSBY has not been able to reduce out-of-pocket payment for healthcare for the poor, and they face the catastrophic impact of such payments.

About RSBY:

  • RSBY, a tax-financed health insurance that is managed through private insurance companies, was introduced in 2008 for inpatient care to Below Poverty Line (BPL) families. Over 40 million families were enrolled till September 2016.
  • The beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000/- per annum on family floater basis, for most of the diseases that require hospitalization. The benefit will be available under the defined diseases in the package list.


  • Health insurance in low- and middle-income countries is recognised as a strategy to improve health access and facilitate Universal Health Care (UHC) by reducing the financial burden of accessing good health.
  • UHC is a “political choice” governments must make, irrespective of income levels.
  • To move towards UHC, risk pooling and prepayment are necessary. When a large proportion of health expenditure is funded by out-of-pocket payment, as is the case in India, households or individuals are subject to major financial risk when they fall ill, because there is no sharing of risk.”
  • In India, insurance is often associated with for-profit private insurance when the majority of the world’s insurance is social or public health insurance. In Thailand, UHC has been implemented using social insurance.
  • Complete tax revenue financing, like in the UK, is not feasible for lower and lower-middle income countries, including India. To have the government pay for everybody and everything (is not feasible), so individual contribution is needed.
  • Despite rising healthcare costs, the RSBY continues to be capped at Rs 30,000 since 2008. There has not been any revision, while the costs of hospitalisation have almost doubled. For a family of 4 or 4.5 persons, it was “grossly inadequate.
  • The one positive impact of the scheme was in non-medical spending. The poor increased their household consumption level, or non-medical spending, after RSBY intervention. The increase is very small, but statistically significant. This is certainly an indirect benefit of the scheme which needs deeper exploration.

Vishal Thakur By - Vishal Thakur
Posted On - 10/12/2017 12:00:00 AM

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