Reducing the financial burden of illness through health insurance
Location: Chhattisgarh, India
Client: World Bank, Chhattisgarh Department of Health and Family Welfare
IDinsight service: Impact evaluation design
In 2007, before India’s present health insurance scheme was launched, just 15% of the population was covered by any kind of health insurance, leaving one billion people – and virtually all of the country’s urban and rural poor – without a safety net to support households in the event of catastrophic illness.
The Indian central government’s RSBY program offers health insurance coverage of approximately $500 per annum to households living below the poverty line. Beneficiaries can seek inpatient treatment for many ailments at any empanelled public or private hospital, of which there are 700 in Chhattisgarh. The cashless system uses high-tech tools to convey payments directly from the insurer to the facility, thereby reducing leakage. In 2012, Chhattisgarh universalized the program, permitting all citizens to enroll regardless of poverty status.
A large and growing literature examines the impact of public health insurance coverage on hospitalization rates and out-of-pocket expenditure for health services. While most studies have found that health insurance increases the likelihood that a family will visit a medical facility, it is less clear whether insurance reduces out-of-pocket expenditure (by covering the costs otherwise incurred by families) or increases it (perhaps because patients become aware of other ailments, which may not be covered). IDinsight designed a rigorous impact evaluation of RSBY in Chhattisgarh to help answer these questions. Because RSBY coverage is opt-in for all eligible beneficiaries, precluding a randomized design, the matching study methodology leveraged differences in enrollment rates to compare health service utilization and expenditure between enrolled and non-enrolled families who are otherwise similar.