In India more than two thirds of expenditure on health is through ‘Out of Pocket’ (OOP) which is the most inefficient and least accountable way of spending on health.
Unorganized Workers Social Security Act (2008) enacted by the Central Government to provide for the social security and welfare of the unorganized workers – Supply Side Financing —> Didn’t reduce OOP.
Rashtriya Swasthya Bima Yojana (RSBY)(2008) – a Health Insurance Scheme for the B.P.L. families with the objectives to reduce OOP expenditure on health and increase access to health care – Demand Side Financing .
        Earlier RSBY covered only BPL families, later expanded to cover :
1. Building and other construction workers registered with the Welfare Boards
2. Licensed Railway Porters
3. Street Vendors
4. MNREGA workers who have worked for more than 15 days during the preceding financial year
5. Beedi Workers
6. Domestic Workers
7. Sanitation Workers
8. Mine Workers
9. Rickshaw pullers
10. Rag pickers
11. Auto/Taxi Driver
RSBY has two fold objectives:
1. To provide financial protection against catastrophic health costs by reducing out
2. To improve access to quality health care for below poverty line households of pocket expenditure for hospitalization and other vulnerable groups in the unorganized sector.
  • Since 1st April, 2015, the RSBY has been transferred to Ministry of Health & Family Welfare on “as is where is” basis.
  • The beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000/- per annum on family floater basis, for most of the diseases that require hospitalization.
  • Additionally, transport expenses of Rs. 100/- per hospitalisation will also be paid to the beneficiary subject to a maximum of Rs. 1000/- per year per family.
  • The beneficiaries need to pay only Rs. 30/- as registration fee for a year while Central and State Government pays the premium as per their sharing ratio to the insurer selected by the State Government on the basis of a competitive bidding.
At every state, the State Government sets up a State Nodal Agency (SNA) that is responsible for implementing, monitoring supervision and part-financing of the scheme by coordinating with Insurance Company, Hospital, District Authorities and other local stake holders.
  • Empowering the beneficiary – RSBY provides the participating BPL household with freedom of choice between public and private hospitals.
  • Business Model for all Stakeholders –Insurers, Hospitals, Intermediaries, Government
  • Information Technology (IT) Intensive
  • Safe and foolproof – The use of biometric enabled smart card and a key management system
  • Portability
  • Cash less and Paperless transactions
  • Robust Monitoring and Evaluation