PROD Reference number: 109                 

Reform option

Community Health Insurance Programme, Karnataka

Subject area

Health financing.


Mobilising community participation.
The main aim of the scheme was to develop and test a model of community health financing suited to a rural community.

The Government of Karnataka in partnership with UNDP, National Insurance Corporation, Karuna Trust and the Centre for Population Dynamics started a pilot project in two blocks of Karnataka in October 2002.

The Karuna Trust is in charge of the overall management of the project. It directly implements the scheme in one block while the health department under the Chief Executive Officer (CEO) of the Zilla (District) Panchayat implements it in the other.

The premium is INR 30 per person per year for those Above the Poverty Line (APL). This is fully subsidised for the Scheduled Castes and Scheduled tribes (SC/ST) Below the Poverty Line (BPL) and a subsidy of INR 10 is provided for non SC/ST BPL.

The scheme provides a health insurance cover of INR 2,500 including all cases of hospitalisation including maternity care at public health facilities.

In addition, INR 50 is given to compensate for wage loss and the hospital is given INR 50 for drugs. The scheme provides comprehensive healthcare without any exclusions.

Local community organisations such as women’s Self Help Groups (SHGs) and Village Health Committees (VHCs) are involved in motivating people and collecting premiums in their local area. This was taken even further at one block where the SHGs also provided micro-credit to members for outpatient care and set up a herbal garden and produced herbal medicines.

The first phase ran for one year. It has since been extended to include two more blocks.

A good response in the first phase helped reduce premiums in the second phase to INR 20.52 . This time subsidy was only provided for the SC/ST BPL.

A total of 85,092 persons (of which 82,546 were SC/ST BPL) were enrolled in the first phase of the scheme in the first block (T.Narsipur). The proportion of claims to total premium paid was only 23%.

In the second block (Bailhongal), a total of 52,750 (32,428 BPL SC/ST) subscribed to the scheme. However here the proportion of claims to total premium paid was 78%.

A possible reason for this high rate could be that here two Primary Health Centres (PHCs) were the designated health institutions while in T. Narsipura, the designated service delivery institutions were two Community Health Centres (CHCs). Also there was more emphasis on preventive services in T.Narsipura such as the herbal garden initiative.

The second phase in T.Narsipura saw 65,770 members of which 61,780 were SC/ST BPL. The ratio of claims to premiums also increased to 58% possibly due to the reduced premiums and enhanced benefits. There was a dip in numbers the second year - probably due to the number of members who seemed to have left the area.
In addition 33,716 tribal and rural people in Yelandur Taluk of Chamarajanagar District were also included in the scheme.
Cost Approximately INR 50 lakhs to set up and run – excluding the premium subsidies.
Place The pilot project was implemented from September 2002 in T. Narsipur block of Mysore district and from October 2002 in Bailhongal block of Belgaum district. (Phase II) From April 2003 in Yelandur, Charamarajanagar and Kollegal blocks of Charamarajanagar district (only for SC/ST BPL) and from mid-June 2003 in Belgaum block (only rural areas).
Time to set up About 6 months to initiate the process.
Advantages Increased access: To healthcare services to the poor and marginalised, especially women.

Increased awareness: Among people of the benefits of risk sharing by the community.
Challenges Possible opposition: Initial problems of getting Government Hospitals to cooperate.
Prerequisites Requires good management (mostly from NGOs) and close monitoring.

Any such scheme should provide reasonable benefits (if possible without any exclusions) at minimum premium and include an element of wage loss compensation.

The scheme should be kept simple - avoiding a lengthy collection/claim procedure - to encourage people to subscribe.
Who needs to
be consulted
Government Health & Family Welfare Department officials at State and District levels; CEO of the Zilla Panchayat; NGO representatives; Community organisation members (SHGs, VHCs etc.)
PROD links   *Health Insurance Scheme for Women, Maharashtra
*Yeshasvini health insurance, Karnataka
*Arogya Raksha Yojana Health Insurance, Karnataka
*Medical Aid Plan for voluntary health insurance, Tamil Nadu
*Integrated Insurance Scheme, Gujarat
*Health Insurance Scheme, Gujarat
*Sardar Patel Aarogya Mandal, Gujarat
*Scheme for Assistance to Families in Exigency (SAFE), Karnataka.
*Mukhya Mantri Jibon Jyoti Bima Achoni, Assam
Sustainability Variable. Sustainability of the T.Narasipur and Yelandur project has been ensured because of participation and ownership of SHGs.
The sustainability of the Bailhongal project depends upon the initiation of a State-wide World Bank health insurance programme which is currently at the planning stage (April 2005).
Chances of Replication The pilot demonstrates that the scheme can be expanded or replicated elsewhere with necessary regional modifications.
Sustainability and chances of replication were two main criteria that were taken into account during the design of the scheme.
Comments The project illustrates that the larger the involvement of the community (such as panchayat bodies, village health committees, SHGs) in the implementation of the scheme, the more successful it is likely to be.
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Further material available on request

Click here to request the item(s) below through email/ post

Draft Report on Community Health Insurance- Karnataka experience by Karuna trust.

Health Sector Reforms in India (GOI: Bureau of Planning; WHO) August 2004


Article from express health care management-
“Karnataka introduces rural health insurance scheme” 1st to 15th January 2003

Newspaper article
“Are you insured for health?” Deccan Herald dated November 28, 2003

Contact for further information Dr H.Sudarshan,
President, Karuna Trust,

Head Quarters:
Karuna Trust
B.R. Hills, Yelandur Taluk
Charamarajanagar District,
Karnataka- 571441

Field office:
Karuna Trust, T.Narasipura Branch, Mysore District
Ph: 08227-261565
Submitted by Sara Joseph, Researcher, April 2005

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