Understanding the “Cash-Less” Nature of Government-Sponsored Health Insurance Schemes

Abstract

The public health spending in India has been hovering around 1% of gross domestic product (GDP), and it contributes only 28% of total health expenditure. Hence, out-of-pocket (OOP) payments continue to be the dominant source of health care financing in India. However, for providing protection from the economic effects of health shocks, last few years have seen a plethora of central and state government–sponsored private health insurance schemes for the deprived groups, particularly those working in the unorganized sector. The latest is the Rajiv Gandhi Jeevandayee Arogya Yojana (RGJAY), launched by the Government of Maharashtra in 2012. This study is an attempt to assess the extent to which RGJAY protects the families from making OOP expenditure while availing the tertiary care from the RGJAY accredited facilities. Both primary and secondary data were utilized for this study. Despite being enrolled in RGJAY, more than three fifths (63%) of the beneficiaries still incurred OOP payments for services when admitted in the hospital, and more worryingly, it was found that a significantly higher proportion of persons from Below Poverty Line (BPL) families (88.23%) reported paying for diagnostics, medications, or consumables. Furthermore, our study found that about a third of the beneficiaries experienced financial catastrophe if indirect expenditure is taken into consideration. This also implies that for the poor, ill-health has further deepened the existing poverty.