Rashtriya Swasthya Bima Yojana which was formally launched on the 1st of October last year to help provide smart card based cashless health insurance cover up to Rs.30,000 or $700 to the Below poverty Line or BPL families in the next five years under the Health Insurance Scheme. An estimated six crore BPL workers in all 600 districts in the country at one lakh workers per district would be covered for 120 district per year starting from this financial year. The Central Government has already issued Guidelines and a Draft Tender Document has been prepared and sent to all the States.
This is how it works, total sum insured would be Rs. 30,000/- per family, per annum, on a family floater basis. It would operate through cashless transactions and would cover hospitalization expenses, taking care of most of the illnesses with as least exclusions as possible. An initial allocation of Rs.250 crore has been made in the budget 2008-09. The Centre would contribute 75% of the annual premium whereas the States would be contributing the remaining 25%.
The use of smart card will make this project totally cashless and provide interoperability to facilitate use by migrant labor and use of IT applications for the poorest of the poor make this scheme unique in nature. The Scheme would use both public and private service providers for delivering the insurance package. It would also seek the contribution of Rs.30, by way of Registration fee, from the BPL beneficiary with a view to inculcating a sense of ownership in them. Fifteen States (Delhi, Rajasthan, Gujarat, Haryana, Bihar, Uttrakhand, Kerala, Punjab, Chhattisgarh, Jharkhand, Uttar Pradesh, Tamilnadu, Karnataka, Maharashtra and West Bengal) have been approved. States of Orissa and Himachal Pradesh are likely to start very soon. All States, except the States in the North-East and J&K, have formally communicated their participation in this program. The Enrolment software has, by and large, stabilized but the real challenge would be the operation of Transaction software which will be used in the hospitals. The specifications for Transaction Software have been approved and released. A Certification System has also been put in place. A couple of Service Providers have submitted the software for certification.
The card is works at both public and private hospitals that have pre-enrolled in the program. The card system functions like a health savings accounts with s consumer-driven incentives to manage costs wisely. The program launched in April has already drawn 1.5 million enrollees. The government hopes 60 million more will join buy the 1st anniversary of the program.
The challenges are many; the back-end data base management which would ultimately make the scheme paperless can lead to fraud and insecurity. This is a long term exercise which will take a few months. If a person is not present in his home state he is not eligible he has to return to his home state to qualify. Not all private practices and hospitals will be willing to allocate discount rate for such a system and until now there are just few enrollees. This type of card should not lead to the market distortions that occurred in the United States after Medicaid and Medicare came into existence. Another challenge is that it only covers medication to a certain extent which would eat a large chunk of money. This is a good move by the government to help the underprivileged yet deserving population, we have to wait and watch how far this scheme is successful. While the use of the card is limited to care at hospitals, it still goes a long way to reduce the chance that medical debt will financially crush already-impoverished families. And with one-third of the world's poor living within its borders, India is right to address its health care challenge the budget provides for Rs.10 billion for the Aam Admi Bima Yojana that provides insurance cover to poor households. This will cover 10 million poor households in addition to the 10 million likely to be covered by Sep 30 this year.
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