Health Insurance for BPL Families- RSBY

Social Security and healthcare assurance for all has been the motto of Government of India, and it has taken various steps in this regard. One of the most important policy milestones is the Unorganized Workers Social Security Act (2008) enacted by the Central Government to provide for the social security and welfare of the unorganized workers. This act recommends that the Central Government provide social security schemes to mitigate risks due to disability, health shocks, maternity and old age which all unorganized workers get exposed to and are likely to suffer from. In India more than two thirds of expenditure on health is through Out of Pocket (OOP) which is the most inefficient and least accountable way of spending on health. Supply side financing on health alone has not been found to be successful in reducing OOP expenditure on health substantially and therefore, to test the demand side financing approach, Government of India, decided to introduce Rashtriya Swasthya Bima Yojana (RSBY) a Health Insurance Scheme for the Below Poverty Line families with the objectives to reduce OOP expenditure on health and increase access to health care

RSBY was launched in early 2008 and was initially designed to target only the Below Poverty Line (BPL) households, but has been expanded to cover other defined categories of unorganised workers, covering:

1. Building and other construction workers registered with the Welfare Boards

2. Licensed Railway Porters

3. Street Vendors

4. MNREGA workers who have worked for more than 15 days during the preceding financial year

5. Beedi Workers

6. Domestic Workers

7. Sanitation Workers

8. Mine Workers

9. Rickshaw pullers

10. Rag pickers

11. Auto/Taxi Driver

The premium cost for enrolled beneficiaries under the scheme is shared by Government of India and the State Governments. The program has the target to cover 70 million households by the end of the Twelfth Five Year Plan (2012-17). Its main service delivery model remained as demand financing, freedom of choice among accredited government and private hospitals, and cashless service reimbursable to provider on a pre-determined package rates on family floater basis, could become a strong pillar for the universal health care system laid down by Government of India.

Since 1st April, 2015, the Scheme Rashtriya Swasthya Bima Yojana (RSBY) has been transferred to Ministry of Health & Family Welfare on “as is where is” basis. Ministry of Health & Family Welfare is administering and implementing the scheme through a decentralized implementation structure at the State level.

Objective of RSBY:-

RSBY has two fold objectives:
1.To provide financial protection against catastrophic health costs by reducing out

2.To improve access to quality health care for below poverty line households of pocket expenditure for hospitalization and other vulnerable groups in the unorganized sector

Details of the Scheme

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. The government has framed indicative 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. The coverage extends to maximum five members of the family which includes the head of household, spouse and up to three dependents. Additionally, transport expenses of Rs. 100/- per hospitalisation will also be paid to the beneficiary subject to a maximum of Rs. 1000/- per year per family. The beneficiaries need to pay only Rs. 30/- as registration fee for a year while Central and State Government pays the premium as per their sharing ratio to the insurer selected by the State Government on the basis of a competitive bidding. At every state, the State Government sets up a State Nodal Agency (SNA) that is responsible for implementing, monitoring supervision and part-financing of the scheme by coordinating with Insurance Company, Hospital, District Authorities and other local stake holders.

Features of scheme

The RSBY scheme is not the first attempt to provide health insurance to low income workers by the Government in India. The RSBY scheme, however, differs from these schemes in several important ways.

Empowering the beneficiary – RSBY provides the participating BPL household with freedom of choice between public and private hospitals and makes him a potential client worth attracting on account of the significant revenues that hospitals stand to earn through the scheme.

Business Model for all Stakeholders – The scheme has been designed as a business model for a social sector scheme with incentives built for each stakeholder. This business model design is conducive both in terms of expansion of the scheme as well as for its long run sustainability.

•	Insurers – The insurer is paid premium for each household enrolled for RSBY. Therefore, the insurer has the motivation to enroll as many households as possible from the BPL list. This will result in better coverage of targeted beneficiaries.

•	Hospitals – A hospital has the incentive to provide treatment to large number of beneficiaries as it is paid per beneficiary treated. Even public hospitals have the incentive to treat beneficiaries under RSBY as the money from the insurer will flow directly to the concerned public hospital which they can use for their own purposes. Insurers, in contrast, will monitor participating hospitals in order to prevent unnecessary procedures or fraud resulting in excessive claims.

•	Intermediaries – The inclusion of intermediaries such as NGOs and MFIs which have a greater stake in assisting BPL households. The intermediaries will be paid for the services they render in reaching out to the beneficiaries.

•	Government – By paying only a maximum sum up to Rs. 750/- per family per year, the Government is able to provide access to quality health care to the below poverty line population. It will also lead to a healthy competition between public and private providers which in turn will improve the functioning of the public health care providers.

Information Technology (IT) Intensive – For the first time IT applications are being used for social sector scheme on such a large scale. Every beneficiary family is issued a biometric enabled smart card containing their fingerprints and photographs. All the hospitals empanelled under RSBY are IT enabled and connected to the server at the district level. This will ensure a smooth data flow regarding service utilization periodically.

Safe and foolproof – The use of biometric enabled smart card and a key management system makes this scheme safe and foolproof. The key management system of RSBY ensures that the card reaches the correct beneficiary and there remains accountability in terms of issuance of the smart card and its usage. The biometric enabled smart card ensures that only the real beneficiary can use the smart card.

Portability – The key feature of RSBY is that a beneficiary who has been enrolled in a particular district will be able to use his/ her smart card in any RSBY empanelled hospital across India. This makes the scheme truly unique and beneficial to the poor families that migrate from one place to the other. Cards can also be split for migrant workers to carry a share of the coverage with them separately.

Cash less and Paperless transactions – A beneficiary of RSBY gets cashless benefit in any of the empanelled hospitals. He/ she only needs to carry his/ her smart card and provide verification through his/ her finger print. For participating providers it is a paperless scheme as they do not need to send all the papers related to treatment to the insurer. They send online claims to the insurer and get paid electronically.

Robust Monitoring and Evaluation – RSBY is evolving a robust monitoring and evaluation system. An elaborate backend data management system is being put in place which can track any transaction across India and provide periodic analytical reports. The basic information gathered by government and reported publicly should allow for mid-course improvements in the scheme. It may also contribute to competition during subsequent tender processes with the insurers by disseminating the data and reports.

Who is the beneficiary

The beneficiary is any Below Poverty Line (BPL) family, whose information is included in the district BPL list prepared by the State government and the family falling into any of the above defined (point number 1) eleven categories are eligible. The eligible family needs to come to the enrollment station, and the identity of the household head needs to be confirmed by the authorized Government official.