Is RSBY India's Platform to Implementing Universal Hospital Insurance?

Background& objective: In 2008, India’s Labour Ministry launched a hospital insurance called Rastriya Swasthya Bima Yojana (RSBY) covering ‘Below-Poverty-Line’ (BPL) households. RSBY is implemented through insurance companies; premiums are subsidized by Union and States governments (75%:25%). We examine RSBY’s enrollment of BPL, costs vs. budgets and policy ramifications. Methods: Numbers of BPL are obtained by following criteria of two committees appointed for this task. District-specific premiums are weighted to obtain national average premiums. Using the BPL estimates and national premiums, we calculated overall expected costs of full roll-out of the RSBY per annum, and compared it to Union government budget allocations. Results: By 31.3.2011, RSBY enrolled about 27.8% of the number of BPL households following the Tendulkar Committee estimates (37.6% following the Lakdawala Committee criteria). The average national weighted premium was INR 530 per household per year in 2011. The expected cost of premium to the union government of enrolling the entire BPL population in FY 2010-11 would be INR 33.5 Billion using Tendulkar count of BPL (or INR 24.6 billion following Lakdawala count), representing about 0.3% (or 0.2% respectively) of the total union budget. However, the RSBY budget allocation for FY 2010-11 was surprisingly only about 0.037% of the total union budget, sufficient to pay premiums of only 34% of the BPL households enrolled by 31.3.2011. Interpretation and conclusions: RSBY could be the platform for universal health insurance when (i) the budget allocation will match the required funds for maintenance and expansion of the scheme; (ii) the scheme would ensure that beneficiaries’ rights are legally anchored; and (iii) RSBY would attract large numbers of premium-paying (non-BPL) households. The government can fix core issues to achieve these objectives