PROD Reference number: 111                 

Reform option

Yeshasvini health insurance, Karnataka

Subject area

Health financing.


Mobilising community participation.
Karnataka has many hospitals and medical colleges but bed occupancy rate was as low as 35% and a large number of people were dying without proper treatment because people could not afford hospitalisation.

The Yeshasvini health insurance scheme, launched in June 2003, was developed by the Narayana Hrudayala Foundation in association with the Department of Cooperation, Government of Karnataka, to cater for 17 lakh farmers. The scheme is self-funded and does not have insurance cover from any insurance company.

The scheme offers free consultations, diagnostics at discounted rates and all types of operations on the stomach, brain, gall bladder, spine, bones, kidneys and heart for a monthly payment of INR 5 (€ 0.09) (INR 60 per person per year). The Government pays INR 2.50 (€0.045) (INR 30 a year) for every member, making it a yearly premium of INR 90 (€1.64). This year it has been increased to INR 120 (€ 2.19) for every adult member and INR 60 (€ 1.09) for children below 18 years to encourage family membership.

The farmers’ cooperatives collect the premiums - in most cases societies pay the annual premium for the members and deduct the amount from their transactions over the year. The amount from the societies is deposited to the Yeshasvini Trust account.

The type of surgeries and their cost is mutually agreed upon between the hospital and the trust. The Family Health Plan Ltd. (IRDA recognised) has also been contacted by the Yeshasvini trust as the Third Party Administrator to carry out the scheme’s day-to-day management.

At present, the scheme recognises around 150 private hospitals throughout Karnataka. Members receive Yeshasvini identity cards which enable them to get treatment in the hospital of their choice.

In the first year the scheme had 1.7 million people and in the second year around 2.5 million people. At the end of 18 months more than 22,000 farmers had undergone operations.
Cost Since it is a self-funded scheme, the entire cost has to be borne by the Trust. Initial cost of implementation was borne by Narayana Hrudayalaya. However they were unable to provide PROD with the costs.
Place Karnataka since June 2003.
Time to set up Approximately one year to setup.
Advantages Financial protection: Prevents the poor getting into debt due to ill health.

Increased awareness: Among people of the benefits of risk sharing by the community.

Service improvement: Encourages the health care industry to upgrade services to enable optimum utilisation of their facilities.
Challenges Requires high participation: A minimum of 10 lakh members are necessary to make the scheme viable.

Limited cover: Covers only surgical interventions. Including essential inpatient treatment would encourage more people to take to the scheme.
Prerequisites The existence of groups such as a farmer’s co-operative society which overcomes the problem of the poor being unable to pay premiums as a lump sum and reduces administration costs in the collection of premiums. This could also help reduce adverse selection since this scheme covers pre-existing diseases.

The premium should be collected for the whole year and deposited before the launch of the scheme. If the membership fees are only collected on a monthly basis, the logistics amount to more than the actual cost of the premium.

A list of comprehensive packages for each operation needs to be agreed by the recognized hospitals. The total package must be paid for by the Health Scheme, including additional charges if he/she develops complications that require additional stay and treatment.
Who needs to
be consulted
Government officials at State and district levels; Cooperatives; Health institutions; a charitable institution or a trust and an institution that can act as a Third Party Administrator.
PROD links   *Health Insurance Scheme for Women, Maharashtra
*Community Health Insurance Programme, Karnataka
*Arogya Raksha Yojana Health Insurance, Karnataka
*Medical Aid Plan for voluntary health insurance, Tamil Nadu
*Community-based Health Insurance
*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 Good but requires a large membership base so as to ensure premium - claim ratio is maintained.
Chances of Replication Based on this success, Narayana Hrudayalaya has initiated another scheme covering one block in Karnataka including inpatient treatment. (See PROD entry on Arogya Raksha scheme)

A similar scheme is also being contemplated for teachers.

Replication is only possible in states that have adequate hospital facilities and where co-operative organisations exist.
Comments Future plans include giving members a smart card which they can charge with money at post offices, banks and other organisations.
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Further material available on request

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Newspaper clippings:
Deccan Herald
“Govt to extend health insurance to farm labours, weavers” dated February 11, 2005

“Health scheme for Karnataka farmers” dated Nov 15, 2002

The Times of India
“Miracles for Rs 7.50” dated April 17, 2005

The Tribune
“Heart surgery for Rs 5 a month” dated August 2, 2005

Narayana Hrudayalaya website:

Contact for further information Ms. Priti Jacob,
Chief Executive Officer, Micro-Health Programme
Narayana Hrudayalaya Institute of Cardiac Sciences
No-258/A,Bommasandra industrial Area
Anekal Taluk,Bangalore-560099
Ph: 080 7835000 to 18
Submitted by Sara Joseph, Researcher, ECTA, April 2005

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