Health Insurance for the Poor
For people living below poverty line, an illness not only represents a permanent threat to their income earning capacity, in many cases it could result in the family falling into a debt trap. When the need to get the treatment arises for poor families they often ignore it because of lack of resources, fearing wage loss, or wait till the last moment when it's too late. Even if they do decide to get the desired health care it consumes their savings, forces them to sell their assets and property or cut other important spending like children's education. Alternatively they have to take on huge debts. Ignoring the treatment may lead to unnecessary suffering and death while selling property or taking debts may end a family's hope of ever escaping poverty.
These tragic outcomes can be avoided through a health insurance which shares the risk of a major health shock across many households by pooling them together. A well designed and implemented health insurance may both increase access to healthcare and may even improve its quality over time.
Genesis of RSBY
In the past Government have tried to provide a health insurance cover to selected beneficiaries either at the State level or National level. However, most of these schemes were not able to achieve their intended objectives. Often there were issues with either the design and/ or implementation of these schemes.
Keeping this background in mind, Government of India decided to design a health insurance scheme which not only avoids the pitfalls of the earlier schemes but goes a step beyond and provides a world class model. A critical review of the existing and earlier health insurance schemes was done with the objective of learning from their good practices as well as seeks lessons from the mistakes. After taking all this into account and also reviewing other successful models of health insurance in the world in similar settings, Rashtriya Swasthya Bima Yojna was designed.