Government health insurance for people below poverty line in India: quasi-experimental evaluation of insurance and health outcomes

OBJECTIVES: To evaluate the effects of a government insurance program covering tertiary care for people below the poverty line in Karnataka, India, on out-of-pocket expenditures, hospital use, and mortality. DESIGN: Geographic regression discontinuity study. SETTING: 572 villages in Karnataka, India. PARTICIPANTS: 31,476 households (22,796 below poverty line and 8680 above poverty line) in 300 villages where the scheme was implemented and 28,633 households (21,767 below poverty line and 6866 above poverty line) in 272 neighboring matched villages ineligible for the scheme. INTERVENTION: A government insurance program (Vajpayee Arogyashree scheme) that provided free tertiary care to households below the poverty line in about half of villages in Karnataka from February 2010 to August 2012. MAIN OUTCOME MEASURE: Out-of-pocket expenditures, hospital use, and mortality. RESULTS: Among households below the poverty line, the mortality rate from conditions potentially responsive to services covered by the scheme (mostly cardiac conditions and cancer) was 0.32% in households eligible for the scheme compared with 0.90% among ineligible households just south of the eligibility border (difference of 0.58 percentage points, 95% confidence interval 0.40 to 0.75; P<0.001). We found no difference in mortality rates for households above the poverty line (households above the poverty line were not eligible for the scheme), with a mortality rate from conditions covered by the scheme of 0.56% in eligible villages compared with 0.55% in ineligible villages (difference of 0.01 percentage points, -0.03 to 0.03; P=0.95). Eligible households had significantly reduced out-of-pocket health expenditures for admissions to hospitals with tertiary care facilities likely to be covered by the scheme (64% reduction, 35% to 97%; P<0.001). There was no significant increase in use of covered services, although the point estimate of a 44.2% increase approached significance (-5.1% to 90.5%; P=0.059). Both reductions in out-of-pocket expenditures and potential increases in use might have contributed to the observed reductions in mortality. CONCLUSIONS: Insuring poor households for efficacious but costly and underused health services significantly improves population health in India.