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What is Rashtriya Swasthaya Bima Yojna (RSBY)?
Rashtriya Swasthaya Bima Yojna is a Central Government Scheme announced by the Prime Minister
Manmohan Singh on the previous year’s Independence Day (August 15, 2007). It is a new health
insurance scheme for the Below Poverty Line (BPL) families in the unorganized sector. It was
formally launched on October 1, 2007.
What is the objective of this Scheme?
The objective of RSBY is to provide the insurance cover to below poverty line (BPL)
households from major health shocks that involve hospitalization.
Is it being implemented all over the country?
There is a five year plan for rolling out the RSBY which allows each participating state to
contract 20 per cent of their respective districts each year. By April 1, 2008, almost every
large state government has expressed its intention of joining the scheme and fifteen States
(Delhi, Rajasthan, Gujarat, Haryana, Bihar, Uttrakhand, Kerala, Punjab, Chhatisgarh,
Karnataka, Maharashtra, Tamilnadu, Uttar Pradesh, West Bengal and Jharkhand) have
already issued advertisements.
Three states – Delhi, Haryana and Rajasthan – have begun enrollment. More than 6000 smart
cards have been issued to the beneficiaries till 31.3.2008. The MoU has also been signed with
the State of Punjab on 8.4.08.
Should State be allowed only 20 percent of the districts in the first year? Is
there any timeframe given to the States to submit their proposals to
implement the scheme?
As per the guidelines each State has to take up 20% of the districts each year in the next five
years. However, the Central Government would consider additional districts if slots become
available on account of inability of other States in furnishing their proposals. As of now, no
time frame has been fixed but it would be done in due course.
Who is bearing the cost of running this Scheme? How does it work?
The majority of the financing, about 75 per cent, is provided by the Government of India
(GOI), while the remainder is paid by the state government. State governments engage in a
competitive bidding process and select a public or private insurance company licensed to
provide health insurance by the Insurance Regulatory Development Authority (IRDA). The
technical bids submitted must include a number of elements as per GOI requirements. The
insurer must agree to cover the benefit package prescribed by GOI through a cashless facility
that in turn requires the use of smart cards which must be issued to all members. This
requires that a sub-contract be arranged with a qualified smart card provider. The insurer
must also agree to engage intermediaries with local presence such as NGOs etc. in order to
provide grassroots outreach and assist members in utilizing the services after enrolment. The
insurer must also provide a list of empanelled hospitals that will participate in the cashless
arrangement. These hospitals must meet certain basic minimum requirements (e.g., size and
registration) and must agree to set up a special RSBY desk with smart card reader and trained
staff. The list should include public and private hospitals.
The financial bid is essentially an annual premium per enrolled household. The insurer is
compensated on the basis of the number of Smart Cards issued, i.e. households covered. Each
contract is specified on the basis of an individual district in a state and the insurer agrees to
set up an office in each district where it operates. While more than one insurer can operate in
a particular state, only one insurer can operate in a single district at any given point in time.
The hardware and software specifications laid down by GOI imply inter-operability across
districts and states.