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Health Insurance for Poor Indians

An illness is a permanent threat to the income earning capacity of people living below poverty line. It could also result to the family falling into a debt trap. Mosof the poor families ignore it because of lack of resources and fearing wage loss or they wait till the last moment when it's too late. The desired health care consumes all their savings, forces them to cut important spending like children's education or sell their property & assets. A health insurance is the best option which can save these families from the tragic outcomes.

The RSBY health insurance scheme is serving India's poor since six years and some 36 million families have acquired the smart card that entitles them to medical treatment.

Unlike many previous social programs, the RSBY has introduced a smart card that stores all data digitally representing a huge logistical IT operation. This has evacuated the huge hurdles of filling forms for the people who can neither read nor write.

This complicated scheme involves various incentives for private insurance companies and hospitals. The task of making people aware about the program and providing smart card is given to the insurance companies. This card can cover up to five people. Cardholders receive a premium from the state and Rs 30, 000 a year for hospital treatment expenses per family. 130 million Indians are insured now and all the 28 states have taken part in the scheme voluntarily.

Plans to offer social services via the card are on the track by some Indian states. The critics of the scheme say that more money should be invested into the public health system instead of giving subsidies to the private companies. Sahktivel Selvaraj from the Public Health Foundation argues that the hospitals have more incentives to operate than are actually needed as the outpatient care is not covered in the scheme.

Helmut Hauschild from the German Agency for International Cooperation thinks that it would be too expensive and logistically complicated to cover outpatients too in the scheme. He also said that the program unlike other social schemes is monitored vigorously to make sure that there is no abuse with state governments and insurance companies being fined in case they don't pay their bills timely. However, it is a challenge to make the population aware about the scheme especially in remote rural areas.

There is another problem according to Rajendra Singh who is responsible for monitoring how the program is implemented. The problem is that not all those who are entitled to the insurance are on the list of people under poverty line. So, information needs to be taken from the 2002 census. There are many families who are under the poverty line but not on the list so those families can’t be helped.

Over six million people have been hospitalized since the launch of the scheme under this scheme since its launch. This scheme has helped alot of people and made their life more comfortable.