India: National health insurance protects people from poverty

GIZ is advising India on developing one of the world’s largest health insurance systems

Illness as a poverty trap: many people in India live with the constant threat of falling into poverty if they become sick. Over 90 per cent of the Indian population work informally – without any employment contract. Consequently, they have no social insurance and are obliged to pay for their own hospital treatment. One of the major causes of impoverishment in India is the high cost of medical treatment. The Indian Government has sought to change this situation and in 2008 introduced health insurance for those living below the poverty line. This health insurance, Rashtriya Swasthya Bima Yojana (RSBY), enables poor people all over India to seek treatment without having to pay for it themselves.

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is advising India on implementing this health insurance system. GIZ provided support throughout the planning and implementation stages – from the development of the IT infrastructure for registering people and managing data to the settlement of costs for hospital procedures. GIZ is carrying out these activities on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The Bill & Melinda Gates Foundation is cofinancing the project.

The national health insurance system now benefits over 41 million families – in total around 134 million people who are protected from financial risk in the event of illness.

Those who sign up to the scheme receive a smart card containing a microchip, which they can use to access medical treatment. The microchip stores photographs and fingerprints of up to five family members who are also authorised users of the programme. The insurance premiums are paid for by the Indian Government and the  state the individual lives in. Users only need to pay a registration fee of 30 rupees, equivalent to around EUR 0,40. Approximately 11.8 million hospital visits have already been handled in this way.

Thanks to the work of GIZ and its partners, over 302 million people worldwide received improved insurance cover or some form of basic health insurance between 2010 and 2015.

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