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

The public health spending in India has been hovering around 1% ofgross 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 carefinancing in India. However, for providing protection from the economic effects ofhealth shocks, last few years have seen a plethora of central and stategovernment–sponsored private health insurance schemes for the deprived groups,particularly those working in the unorganized sector. The latest is the Rajiv GandhiJeevandayee 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 frommaking OOP expenditure while availing the tertiary care from the RGJAY accreditedfacilities. Both primary and secondary data were utilized for this study. Despite beingenrolled in RGJAY, more than three fifths (63%) of the beneficiaries still incurred OOPpayments for services when admitted in the hospital, and more worryingly, it was foundthat a significantly higher proportion of persons from Below Poverty Line (BPL) families(88.23%) reported paying for diagnostics, medications, or consumables. Furthermore, ourstudy found that about a third of the beneficiaries experienced financial catastrophe ifindirect expenditure is taken into consideration. This also implies that for the poor,ill-health has further deepened the existing poverty