RSBY customers left in limbo; uncertainty prevails over future of scheme

Uncertainty prevails over future of scheme

With uncertainty around the future of the government-sponsored Rashtriya Swasthya Bima Yojana (RSBY), card holders have been left in uncertainty.

States are not renewing contracts or issuing tenders, while the Centre is yet to take a final decision on how RSBY will be implemented from this financial year.

Sector officials said the scheme was set to undergo an overhaul, with a proposal to have only public sector general insurers manage it, through a trust-like structure. However, the role of insurers is not clear. Led by the General Insurance Council, they've presented their views to the government.

“We do not know the status. Hence, no bids are being done, even as contracts have expired. This will impact the end-customer,” said a senior official from a private general insurer.

Both state and private sector general insurers have been taking part in annual tenders for winning contracts in each district to manage the scheme. The insurers manage the process and the scheme is subsidised by the Centre. It was launched by the Union ministry of labour and employment on April 1, 2008, to provide health insurance for families below the poverty line, from financial liabilities arising out of health care, including hospitalisation.

Those opting for the scheme are entitled to a hospitalisation cover up to Rs 30,000, for a number of ailments and conditions. The government has fixed package rates for the hospitals for a large number of interventions. Pre-existing conditions are covered from the outset there is no age limit.

The coverage extends to five members of the family, including three dependents. Beneficiaries need to pay only Rs 30 as registration fee; the central and state governments pay the premium to the insurer, selected on the basis of competitive bidding.
 

As on April 30 last year, there were 37.19 million active smart cards under the scheme. A total of 7.16 million hospitalisation cases had been serviced till then. 

It is also being proposed that the ministry of health will now be responsible for this scheme since it covers health insurance for policyholders.

This scheme was a mechanism used by private insurers not only to reach out to more customers, but also for building their brand in the hinterlands where they may not have had a branch. The insurer for each region is selected on the basis of a competitive bidding process, where the insurer quoting the lowest price is selected each year.

“If insurers are out of the ambit out of the scheme, while it will impact overall health business, the customer benefits may decrease. Insurers have a better expertise in handling claims than other institutions,” said the underwriting head of a private non-life insurer.