The proposed universal health insurance scheme is seen primarily as a political move by the United Progressive Alliance (UPA) ruling coalition of center-left political parties, led by Manmohan Singh.

The planning commission, appointed by the Prime Minister to suggest universal health insurance coverage for all Indians, is framing a blueprint that would provide a minimum cover to everyone in the country. Under Rashtriya Swasthya Bima Yojna (RSBY; Hindi for National Health Insurance Program), BPL families in the unorganized sector are provided health insurance cover which entitles them to hospitalization coverage of up to 30,000 rupees. Beneficiaries under RSBY need to pay only 30 rupees as registration fee, while the central and state governments pay the outstanding premium to the insurer.

The planning commission has also called for an increase in public expenditure on health to 2.5% of the gross domestic product (GDP) per annum by the end of 12th Plan (2012-17), up from 1.4% at present. Private households currently contribute about three-fourths of the total healthcare expenditure, which is at about 4% of the GDP, and is estimated at US $1.6 trillion. The planning commission is expected to finalize the spending plan for the next five years by December 2011.

“I think we do want a universal access system. The RSBY today is available for all BPL and for additional categories. It is quite possible that it can be expanded,” said planning commission deputy chairman Montek Singh Ahluwalia. “When I say free...you provide basic health insurance and anybody who wants more health cover pays extra. That is perfectly viable.”

In 2008, the World Bank (Washington DC, USA) announced that it had uncovered serious incidents of fraud and corruption in health projects it funds in India to the tune of US $570 million. The World Bank also stated that despite improvement in health indicators in the country, slow progress has failed to match the impressive gains in economic growth during the past decade.

Related Links:
Rashtriya Swasthya Bima Yojna
The World Bank