Health Insurance for Rural India

Access to quality healthcare has always been challenging for rural India, which comprises more than 70% of the total population. Whether it's a viral infection, critical illness or an accident, India's rural population is vulnerable to various health-related risks. Even though India's rural population makes up a massive proportion of the total population, the low penetration of health insurance schemes proves that the market remains largely unexplored.

Be it due to a lack of hygiene, lack of good medical facilities, or proper nutrition for those below the poverty line, the rural part of India faces numerous challenges regarding health insurance in rural areas. Most rural households lack the concept of structured savings, which leads them to a situation where one has to choose between health and financial stability. If the health insurance premiums are too high, the rural population might rethink the idea of buying insurance policies for themselves and their families. Hence, the kind of health insurance schemes offered to this untapped market become crucial in helping increase penetration.

The Government of India has launched several health insurance schemes for the rural population to deal with various healthcare issues. Some of the health insurance schemes are explained further.

Aam Aadmi Bima Yojana (AABY)

The Aam Aadmi Bima Yojana is one of the rural health insurance schemes introduced by the Government of India to provide social security to landless households and families below the poverty line. The scheme is meant for beneficiaries involved in certain vocations, including fishing, weaving, carpentry, etc. The Aam Aadmi Bima Yojana offers life and disability insurance to the beneficiaries and partial compensation for the loss of wages due to death or disability. Apart from insurance coverage, the scheme provides scholarship benefits for the education of the children of the insured. Since its introduction, the scheme has provided financial assistance to rural communities and reduced economic vulnerabilities associated with healthcare emergencies.

Rashtriya Swasthya Bima Yojana (RSBY)

The RSBY scheme, an acronym for Rashtriya Swasthya Bima Yojana, is a health insurance scheme for providing assistance in rural areas. The scheme was launched in 2008, especially for people working in the unorganised sector. It is estimated that almost 93% of the total population of India works in the unorganised sector; hence the scheme was introduced to bridge the gap. The scheme gives hospitalisation coverage of up to INR 30,000 annually for a family of five. One of the key advantages of availing of the RSBY scheme includes its cashless facility, where the beneficiaries do not have to pay upfront for medical services under the scheme. The scheme also provides coverage for transportation costs, making it effortless for the insured to reach healthcare facilities in remote areas.

Pradhan Mantri Jan Arogya Yojana (PMJAY)

The Pradhan Mantri Jan Arogya Yojana, also known as Ayushman Bharat or National Health Protection Scheme, is one of India's largest health insurance schemes that gives coverage against secondary and tertiary hospitalisation charges. The scheme covers up to INR 5 lakh per family per year with cashless transactions at both public and private hospitals. The PMJAY scheme covers a wide range of medical conditions, including pre-existing ones, ensuring comprehensive healthcare insurance for rural areas in India. The scheme also promotes a paperless and cashless mode of transaction that ensures transparency and efficiency in healthcare delivery in every part of the country.

Pradhan Mantri Suraksha Bima Yojana (PMSBY)

With an aim to enhance the healthcare insurance penetration in India, which was only 20% in 2016, the Government of India launched the Pradhan Mantri Suraksha Bima Yojana. The scheme covers individuals between 18 to 70 years with a savings bank account for accidental death and disability. The health policy provides accidental death and full disability of up to INR 2 lakh and partial disability of INR 1 lakh against INR 12 per annum. The premium amount gets deducted from the beneficiary’s bank account through the auto-debit facility.

Universal Health Insurance Scheme (UHIS)

The Universal Health Insurance Scheme was launched in 2003 to support the poorest section of society. The UHIS scheme was launched as a part of the Universal Health Assurance Mission (UHAM) and is open to offering healthcare assistance to people living below the poverty line. The UHIS scheme can be purchased by both individuals and groups aged between 5 to 70 years. Accidental disability, hospitalisation and a lot of other facilities are covered under the UHIS scheme. However, the health insurance policy premium depends largely on the size of the family and the number of individuals insured.

People in rural India cannot afford regular health insurance policies due to many financial and educational limitations. With feasible premiums and substantial insurance coverage, the various health insurance schemes introduced in rural areas by the Government of India are aimed at providing health insurance to every citizen of India. The various health insurance schemes by the Government of India have played a crucial role in extending healthcare access and financial protection to marginalised communities.