Analyses of enrollment, dropout and effectiveness of RSBY in northern rural India

Wameq Raza and Ellen van de Poel and Pradeep Panda
Erasmus University Rotterdam, Microinsurance Academy, BRAC


The Rashtriya Swasthya Bima Yojana (RSBY) was launched in 2008 to provide inpatient insurance coverage to all below-poverty-line (BPL) households in India. Using household level panel data from Uttar Pradesh (UP) and Bihar (2012-2013), this paper investigates the determinants of enrolling and dropping-out of the scheme. We next investigate whether participation is positively associated with inpatient-care utilization and financial protection. We find that the presence of chronic illnesses, lower socioeconomic status, belonging to scheduled-castes or tribes (SCST), insurance related awareness and proximity to healthcare facilities are positively correlated with enrolment. SCST status and presence of chronic condition households deter households from dropping-out. The associations between RSBY membership and healthcare use and financial protection vary across the states. Unlike UP, we only find insured households in Bihar to experience lower out-of-pocket payments and debt following hospitalization. Overall, we conclude that though the RSBY does
appear to be pro-poor and is inclusive of disadvantaged minorities, the scheme suffers from adverse selection. The RSBY has the potential to play an important role in India’s move towards Universal Health Coverage. To do this however, scheme awareness should be increased; targeting mechanisms warrant improvement, and ensure that RSBY participation leads to cashless care. The differences in effectiveness between both states suggests that regulatory and infrastructural reform, may lead to more effective coverage.